Microsoft’s broadband concerns

Microsoft's Steve Ballmer has expressed concerns over the speed of broadband rollout and the effect of this on Xbox. His comments pretty much contradict entirely the "we're about online gaming" address made by Chief Xbox officer Robbie Bach at E3. Ballmer told that FT that Microsoft has grown "more pessimistic" about broadband technology, and that the rollout has been slower than expected. Furthermore, he explained that "the fundamental reason people will buy Xbox is to play games locally." Hitting the nail firmly on the head, he mused that "it is possible that some won't buy the Xbox because they don't have broadband capability." Of course, this isn't Microsoft's fault (and Ballmer says so), it's the fault of the numerous telcos that aren't rolling DSL and cable out to those that want it fast enough. Unlike Sony, Microsoft haven't made a strategic decision to 'side' with anyone, so they're really left at the mercy of the telcos and their consumers' interest in procuring broadband. Microsoft has invested a hell of a lot of money into advancing broadband development on the quiet, but the Xbox is quietly becoming more of a liability than anything else. Investment firm Merrill Lynch are claiming the loss per Xbox unit will be more than five times that of Nintendo's losses on GameCube, and that's before the failure of the broadband revolution is taken into account. Lets not forget what happened to the last console that threw all its eggs into the broadband basket. Related Feature - Out-boxed?

Source - FT