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Why the Windows Phone is Important to Microsoft Corporation (MSFT)

Microsoft Corporation

Microsoft Corporation took part in the Goldman Sachs Technology Conference which was held earlier this month in San Francisco. Bill Duff, CVP & CFO, Windows and Devices Group shared a few details about how Microsoft has been restructured with very different focus areas over the last few years and what the new business models are. We have already read about Surface tablets and Windows 10 on the PC.

microsoft corporation (MSFT) surface pro

Microsoft Corporation will Find a Niche for Windows Phone

When asked how important is it for Microsoft to maintain a presence in the smart phone market, Duff began by acknowledging the opportunity that the field of mobile holds. He said that they will no longer be trying to compete everywhere at all price points with all customer segments. Instead, they will focus on the ways in which they can innovate, areas where they think they can get some initial success and grow from there.

In terms of the chance of Android furthering its dominance over the long term in emerging economies, Duff stressed on Windows Phone as a pretty different offering. He said that one needs to look at the value proposition that comes with a Windows Phone. However, he asserted that Windows Phone will continue to compete with other platforms as it does now.

The Xbox User Base will be Leveraged with Windows 10

Duff went on to add that for Microsoft, gaming has been usually tied to the console. He agreed that gamers are a particularly active user base. Duff stressed on the change in focus from the number of copies sold (of gaming titles) to the number of subscribers of the Xbox Live service. He also went on to add that Microsoft sees plenty of opportunities with Windows 10 in order to give an excellent cross-platform gaming experience across the PC and the Xbox. Duff connected this point with the reorganization of Microsoft in which the Windows, Windows Phone and Xbox divisions were clubbed together. He added that this move has resulted in doing away with a lot of the costs in terms of multiple teams working on more or less the same type of tasks.

Duff wasn’t very enthusiastic about Oculus giving a lot of advantage to Windows when it comes to VR. He said that for him, the fields of VR and AR are more about use cases in terms of the consumer and the enterprise user. He did express his confidence in terms of gaming franchises such as Halo.

Recently, Larry Hryb from Microsoft, popularly known as ‘Major Nelson’ publicly expressed his displeasure at the trend in the gaming industry of denying the multiplayer gaming rights of users based on their paying for add-on content. Hryb added that with Halo 5, the focus has been more on micro-transactions. It is expected that by the end of March, the total volume of all such micro-transactions will reach $2m. Hryb praised the developers (343 Industries) for taking efforts to keep the gaming community from being fractured. It is a trend among multiplayer games, especially first-person shooters to keep releasing new content in the form of maps and game modes. Many look at it as the only way to ensure a revenue stream after the base game is sold. However, Hryb said that this results in the gaming servers splitting up the community by not allowing people to play with their friends just because they brought the add-on pack but their friend did not.

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