Can Microsoft's XBOX 360 "Project Natal" Help its Share Price?

Microsoft (NASDAQ:MSFT) is gearing up for its rumored August release of Project Natal for the XBOX 360 but will it do any help to lift its share price from the $25 level?

The quick answer - not likely.  Microsoft's entertainment division accounted for 11% of the company's revenue and 3% of its income in the most recent quarter. Microsoft gets the bulk of its revenue from its Windows and Office products.

WallStNation.com Sponsors - Become one Today

(Nexus404.com) BusinessWeek wrote a very damning piece against Microsoft in which they quote several analysts who believe that Microsoft should get out of the consumer technology space. They accuse Microsoft’s whole Entertainment division (Xbox, Zune, Bing, Windows Phone) of dragging the company down and hurting the bottom line and growth of the American tech giant. They seem to be singling out Natal as a perfect example of something Microsoft shouldn’t be involved in.

Microsoft (similar to Google in this regard), makes a large portion of their income from Windows and Microsoft Office, which allows them the freedom to lose income on “side projects” like the Xbox 360, Windows Phone, Bing, etc. etc. Microsoft would tell you that they’re attempting to expand the markets they’re involved in (like Apple, who has successfully pushed out from computers into phones and music players).

Some of the investors quoted by the BusinessWeek article want Microsoft to (as mentioned early) “pull an IBM”. In the early 1990’s, IBM reorganized themselves into an enterprise services and infrastructure company, mostly leaving the consumer space, save for the ThinkPad notebooks (which were generally pushed as enterprise models – and were made by Lenovo all those years anyway).

SOURCE: http://nexus404.com/Blog/2010/06/09/wall-street-criticizes-microsoft-for-natal-looking-for-the-project-natal-release-date-mircosoft-investors-arent-as-motion-control-add-on-comes-under-fire/