Microsoft is definitely a company that is rich – very, very rich, but this does not mean it gives them the license to treat money flippantly since they do have to answer to investors and shareholders as well. Having said that, their cash position does give them an advantage, as they can “buy” their way into a particular market. Case in point, the video games console market, where what was once a rivalry between Sega, Nintendo and Sony has turned into something else with the introduction of the Xbox. Sure, the first Xbox failed miserably in Japan, where lesser companies would have bowed out because they do not have the staying power despite bleeding money, but Microsoft held on until Xbox 360 came out and proved to do better than its predecessor.
Well, Microsoft’s foray into the hugely popular tablet market has not exactly been a memorable one, either, as in their quarterly earnings report, they pointed to a $900 million inventory write-down, where most of it was attributed to an unsold inventory of Surface tablets. Slashing its prices might help shift some units, but we do not foresee a fire sale causing people to pick up the Surface RT suddenly.