Microsoft’s attempted merger with Activision has revealed a lot about their gaming division and it’s not good. Microsoft entered into the gaming industry in 2001 with XBOX. Coincidentally, Sega had just ceased production of its Dreamcast console earlier in March that year. Then in November 2001 the XBOX was released. This console was in direct competition with Nintendo’s GameCube and Sony’s PlayStation.

When XBOX hit the market, it brought with it a library of 19 titles, one of the most noteworthy being Halo: Combat Evolved. This first-person shooter quickly gained traction in Major League Gaming and became a major driving force behind XBOX’s success. In 2002 Microsoft took things one step further by launching their online service for XBOX.

In the early days of gaming, Sony and Nintendo had yet to test the waters of online gaming. Sega was making strides with their Dreamcast console, but failed to capitalize on its potential and eventually went out of business in 2001. Microsoft, however, possessed both the monetary resources and technical expertise necessary to take on this ambitious endeavor.

XBOX paved the way for the next era of console gaming with its revolutionary online capabilities. This success was followed up by other major consoles such as PlayStation 2 and Nintendo Wii, which both incorporated similar features in their hardware.

Microsoft also provided promotional support to Major League Gaming who was an E-sports organization that held tournaments within their pro circuit series. With all the things Microsoft has done for gaming, it is a complete shock that by their own admission via court documents they are third within the console wars. Why is this?

Well, it is simple. Microsoft entered into an arena with two competitors that had advantages over them. For starters Microsoft never had the established history of gaming like Nintendo nor did they have the entertainment convergence Sony experienced with the rise of the PlayStation. Microsoft has been trying to keep up with both Nintendo and Sony through acquisitions of popular publishers such as Bethesda the creator of Skyrim and Elder Scrolls, Rare the makers of Killer Instinct & Donkey Kong, Lionhead Studios the creators of Fable and now Activision with the Call of Duty series.

The XBOX has been out for over 22 years. If it wasn’t for Microsoft online gaming would not have been embraced so readily by the other two console makers. However, no matter how many iterations of their console they release they will not win the console wars.  If this was any other business after eight years at the most this project would have been abandoned. The writing is on the wall that Microsoft should enter the gaming industry as a publisher. The problem is what happens when you don’t read the wall? You cannot think you can win this battle by throwing money at it for victory. There are metrics they are ignoring which is actually why they are not successful; continuing to purchase publishers for an edge will not help the XBOX.