microsoft plans to spend 800 million $ in research and development!
Following on from the recent price drop in Europe and Australia, Microsoft has committed $800 million in research and development for Xbox and MSN. Microsoft clearly see's Xbox as the way to global domination in the home and the office, and they are looking at Xbox to help boost a slow-down in PC software.
Microsoft needs to do something to revive its growth rates, analysts say.
Its core PC operating system and software businesses have slowed to low single-digit sales growth. That's a far cry from historical growth rates of 25%.
But the new businesses won't be a slam dunk. Take Xbox. Microsoft is slashing console prices in Europe and Japan to kick-start worse-than-expected sales there. It also cut projections for total console shipments in this fiscal year by at least 1 million units to 3.5 million to 4 million units.
Microsoft faces many challenges as it diversifies. "They're going from a slow- or no-growth business with very high margins into much higher growth markets, but with much lower margins and much more competition," said Eric Upin, an analyst with Robertson Stephens.
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