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Microsoft Hopes Xbox Will Bring New Buzz and Boost Bottom Line

Microsoft Kinect
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Microsoft Kinect

I haven't been to the Microsoft campus in Redmond, Wash. in years. Heck, I can't even remember the last time I was here, in the '90s.

That, of course, is eons ago in tech-time. One thing I do remember, though, was that, at the time, Bill Gates, then the CEO, was worth a mere—a mere—$8 billion.

Now, as you probably know, he's worth seven or eight-times that, even after giving more money than any human being ever has.

The change is amazing. These are now hundreds of buildings here, spread across thousands of acres and housing tens of thousands of employees. Think of the biggest college campus you've ever been on and you've got an idea of the scale of Microsoft's presence here.

If you've owned Microsoft stock over the past decade, you're surely aware that the company has struggled to create buzz for itself—and shareholder value for you. But one bright spot in the company's portfolio is its gaming and home entertainment division.

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The key brand is Xbox 360. It's the leading multi-function game console in the U.S. right now, outselling its chief rival, the Sony Playstation.

More than 55 million consoles have been sold worldwide, and when the company launched its Kinect game controller last fall, it sold 8 million of the devices in the first 60 days post-introduction. That made Kinect the fastest-selling consumer electronics device in history, says Microsoft.

Don Mattrick is the man who heads up the division that contains Xbox. I will be speaking to him today on "Power Lunch." He's got a hit product, to be sure, but he's also got a lot of pressure on him. That's because Microsoft is clearly counting on Xbox to help it reclaim some of the mojo the company seems to have lost, in the public's eye, at least, over the past decade to rivals such as Apple and Google.

Kinect, the motion controller for Microsoft's Xbox 360.
Source: Microsoft
Kinect, the motion controller for Microsoft's Xbox 360.

But, can a game console give a substantial life to a company the size of $64 billion Microsoft? It sure hopes so. And that hope rests on this simple idea: Xbox 360 isn't just a game console. Increasingly, it's being used as the entertainment hub in households the world over.

It can stream movies and TV programs. It can do search the web through the company's Bing search engine. It can download videos from YouTube and connect you to your favorite social network. In short, one box, one stop for all your home entertainment.

The competition for your eyeballs, of course, is intense. The next few years will tell.

Watch Tyler Mathisen's reports from Microsoft HQ today on a special edition of "Power Lunch" at 1pm ET on CNBC.



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