Ballmer: Xbox 360 'an Unqualified Success'

It's a product line that has consumed tens of billions of dollars of R&D, money that can never be recouped. The most recent version of the product is so endemically buggy that it has suffered from an historic product recall whose value exceeds $1 billion. And despite a year-long head start, this product is ready to fall into last place as its competitors surge forward with more compelling offerings. So how does one describe such a product?

As "an unqualified success," of course.

At least that's how Microsoft CEO Steve Ballmer referred to the Xbox 360 video game system this week. In an interview with the Mercury News, the suddenly out-and-about Ballmer agreed that "Xbox is an unqualified success." He added, "No question about that. The product is selling very well. The Xbox is an absolute home run."

When confronted with the fact that Xbox 360 sales have actually fallen dramatically this year--the console was even outsold by one-time also-ran PlayStation 3 in six of the first eight months of 2008--Ballmer had no response. He did note, however, that recent price cuts had nothing to do with the console's lagging popularity. "All consoles start at higher prices," he said. "They always come down through the long cycle."

Ballmer added that the Xbox Live online service is "going gangbusters," and certainly that service is doing better than any competing video game services. But attempts to mimic the relative success of Xbox Live on the PC with the ill-fated Games for Windows Live service have failed. Recently, Microsoft announced that it would no longer try to charge for that service because, implicitly, PC gamers already have so many free online avenues for game play.

By the way, the Xbox 360 isn't the only consumer product Ballmer described as an unqualified success, though it may be the most far-fetched. He also cited Windows Vista, with over 180 million licenses sold, the Media Room set-top box software, and Office 2007.