The software giant has stumbled with consumer offerings in the tablet and smartphone world. But its top spot in console gaming in the United States shows it can understand consumers.
When it comes to generating consumer lust, Microsoft often comes up short.
Windows 8 sales seem to be falling shy of analyst expectations. And despite its best design and engineering efforts, Microsoft continues to struggle to get anything more than a toehold in the smartphone market.
And yet Microsoft's success with the Xbox continues to undermine any argument that the company is preternaturally unable to understand consumer desires. The Xbox 360 has performed so strongly in its seven-year run that Microsoft is in the enviable position of being able to wait for rivals Nintendo and Sony to unveil their next-generation game consoles before disclosing its own plans.
Last week, longtime Microsoft watcher Paul Thurrott noted in an interview with talk show "What the Tech" that Microsoft had planned to reveal details about the next Xbox on May 21, a month later than had been previously rumored. (Thurrott's Xbox comments start at the 54:44 mark of this clip.) A source later confirmed that timing to The Verge, though Microsoft declined to comment.
Microsoft no doubt needs to come up with a next-generation console to remain competitive. But the software giant has put itself in such a strong position with the Xbox 360, along with Xbox Live and the Kinect motion-sensing controller, that it can watch how Nintendo and Sony play their cards before putting its own hand on the table.
In February, Sony, whose PlayStation 3 sales have lagged the Xbox in the United States, began to take the wraps off the PlayStation 4 at an event in New York City. The new device will have a far zippier graphics engine and beefier storage than its 7-year-old predecessor.
Nintendo had been running third to the Xbox in the United States. Soit launched its Wii U console, with tabletlike game controller that doubles as a second screen, last November. But even with that debut, the Xbox remains console king in the United States.
It seems likely that Microsoft will offer some details of the console prior to the E3 trade show in June, perhaps at a May 21 event, and that it will launch the next Xbox this holiday season. There's no guarantee, of course, that Microsoft will remain on top in the United States. After all, it seized the top spot from Sony, whose lead in the mid-2000s seemed unassailable.
But for all its shortcomings with other consumer products, Microsoft has proved itself remarkably adept in the video gaming world.