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Microsoft Admits That Selling Hardware Is a Devil of a Job

Phil Harrison issues a warning for Valve, as it plans to release the Steam Box

Jan 11, 2013 22:31 GMT  ·  By
The Surface RT is Microsoft's first tablet ever
   The Surface RT is Microsoft's first tablet ever

Microsoft has often been criticized for its efforts in the hardware industry, especially after it had officially announced the Surface RT tablet, mostly because such an expansion could turn the company into a powerful rival for the existing hardware manufacturers already on the market.

The Surface RT is now on sale, but Microsoft admits that selling hardware is very, very difficult.

Talking about Valve’s upcoming Steam Box, Phil Harrison, Microsoft Studios executive, issued a warning, saying that stepping into the hardware sector was not at all piece of cake.

“Entering the hardware business is a really tough business. You have to have great fortitude to be in the hardware business and you have to have deep pockets and a very strong balance sheet. It's not possible for every new hardware entrant to get to scale,” Harrison said in an interview with Eurogamer.

“They can be successful at small scale. But it's very rare for a new hardware entrant to get to scale, and I mean tens or hundreds of millions of units. There are a very small number of companies that can make that happen.”

Acer is one of the companies that attacked Microsoft for its products aimed at the hardware industry, mostly after the Redmond-based software firm announced the Surface RT. Microsoft’s own Surface has become a rival for the Acer Iconia tablet.

Acer CEO JT Wang said in October that Microsoft should better focus on its software business, as an expansion in the hardware industry would kill the entire ecosystem.

Microsoft has so much money that it could “kill everybody,” Wang explained in an interview.

“They are doing something to kill the whole ecosystem,” Wang said. “They have all this cash. They could kill everybody,” he added.

Microsoft, on the other hand, seems fully prepared to continue its expansion in the hardware market and after the Surface RT, the company is also getting ready to debut the Pro version of the tablet. Some other Surface-branded devices are also likely to enter production, including a 7-inch gaming tablet and a smartphone.