Digital Home Thoughts: Microsoft Shares Its Recipe for Zune's 'Secret Sauce'

"Microsoft's plan with Zune is to emulate the integrated Xbox/Xbox Live hardware/software/services model, Bach said. Bach told analysts to expect it to take Microsoft at least three to five years to start making a dent in the portable-player market. Its first entry will be one new product which it will launch in the fall in the U.S., he said. Microsoft plans to expand its Zune line to encompass more kinds of players and other geographies next year. Bach said to expect Microsoft to spend "hundreds of millions" – but not billions, as it has on the Xbox – on developing and marketing Zune. Microsoft expects to take a loss on Zune through fiscal 2008. Zune isn't the only big bet Microsoft is making in the Entertainment and Devices division. Bach also will continue to post losses on its Xbox business through fiscal 2007 (which ends on June 30, 2007), he reiterated."

I think it's a good thing Microsoft is planning on taking it on the chin in order to make Zune a device people will actually want at a price point they can afford. This type of 'loss-leader' approach is what has spelled success for many a company in the past. Remember Amazon in its infancy? Also, for those of you who were worried about the future of PlaysForSure: ""PlaysforSure continues as it is today," he said. In fact, the Zune team "will work with the same (PlaysforSure) interfaces," Bach said." So that settles that I guess. :wink: