Summary: Epic and Microsoft as Samson and Delilah; epic failures for Yahoo! after Microsoft deal

AS we delve deeper into Xbox realities, we keep finding that everything that touches Xbox 360 gets burned (sometimes literally). FASA Interactive recently warned that Microsoft betrays partners like itself (even “destroys” them, to use the exact words) and now we find more stories like this in the news:

i. Analyst Thinks Epic Regrets Microsoft Deal

Epic is the publisher behind the smash hit Gears of War franchise. Analyst Michael Pachter has said that he believes Epic is regretting its decision to tie up exclusively with Microsoft. Pachter told GameTrailers, "I think the Epic guys can't wait until they can start doing multi-platform games."

His opinion is based on profits. Sure there are a lot of Xbox consoles on the market but Pachter figures that if the Gears of War games had been offered on the PS3 it would have sold an additional 3 to 4 million copies.

ii. Epic Regrets Microsoft Exclusivity Deal, Says Pachter

Asked if he think Gears will go multiplatform, Pachter clarified. "I don't, I think Microsoft has a contract to make sure they get that sequel," he said. "But I think Epic regrets signing that contract. You're up to 11 million PS3s in the U.S. and probably similar number in Europe, you got a 20 million addressable market with a game like Gears of War. I mean, that thing would easily sell 3 or 4 million on the PS3, that's a lot of profit. No way is it worth it."

So, there are likely to be regrets about the partnership -- even a regret which Epic is trying to deny. All those companies that lost their way after Microsoft deals are probably in denial. People love to convince themselves that they rarely made mistakes; it makes life much easier to get on with. As a side note, exclusivity deals should be considered illegal as they harm the market as a whole; they leave out externalities altogether.

As some readers may recall, Epic was turning bitter about GNU/Linux [1, 2] after those affairs with Microsoft, so this is quite relevant to us. Microsoft partnerships are consistently harmful as the corporate hijack of Yahoo! recently taught us (the European Commission can still rescue Yahoo! from Microsoft). Yahoo! had a very tough year despite or because of the Microsoft intervention. Yahoo Shopping is reportedly going into the dustbin or being outsourced. That's just the latest among other victims that include Geocities (I had a Web site there since I was 15).

Relatively quietly Yahoo has decided to outsource most of Yahoo Shopping to PriceGrabber. This is analogous to what Yahoo is doing with Microsoft-Bing in search — just not with Microsoft. Merchant listings will now come from PriceGrabber and e-commerce sellers will only be able to get into Yahoo Shopping via PriceGrabber or Yahoo Search (Bing).

To name other victims, there is of course Zimbra, which was put in the hands of former Microsoft employees whose actions speak for themselves. Whether they can put up a fight against their former employer (let alone want to) is somewhat questionable because of employee ties not just at VMware but EMC too (it virtually owns VMware). We wrote about this before [1, 2, 3, 4, 5, 6]. Also see:

• No Point to Microsoft's New Datacentres, Microsoft-dominated VMware Comes to Redmond's Back Garden
• VMware Turns Sour After Microsoft Intervention
• What is Going on at VMware?

Microsoft Nick chooses to believe (and he is not alone [1, 2]) that former Microsoft managers will fight against a Microsoft cash cow, but we are skeptical. VMware gives APIs and SDKs [1, 2], but this is not the same as source code with the rights granted by the GPL. VMware recently removed the GPL from a SpringSource product. EMC will probably be pleased. ⬆