Microsoft and Army Can’t see Eye to Eye

Now this is just fascinating:

So will the Army go out and buy the Xbox? Not quite. Roger Smith, chief technology officer for PEO STRI, the Army command responsible for purchasing training equipment, claims that Microsoft refused to sell him the consoles. Smith told me that he discussed acquiring the Xbox with Microsoft representatives at a trade show back in 2006. According to Smith, the Microsoft executives said they would neither sell the Xbox 360 nor license XNA game development tools to the Army for three reasons:

• Microsoft was afraid that the military would buy up lots of Xbox 360s, but would buy only one game for each of them, so MS wouldn’t make much money off of the games.
• that a big military purchase would create a shortage of Xbox 360s.
• that if the Xbox became an Army training device, it would taint its reputation. Microsoft was concerned that “do we want the Xbox 360 to be seen as having the flavor of a weapon? Do we want Mom and Dad knowing that their kid is buying the same game console as the military trains the SEALs and Rangers on?” Smith told me during an interview for Training Camp; Simulation Journal.

Read the rest; Microsoft’s recollection of the discussion seems to be different than that of the Army, but the two accounts aren’t entirely contradictory. Regarding the objections, I can sort of understand #1 and #2; if the console itself is a loss leader, then there would be legitimate concern about reducing potential stocks for the civilian market, at least in the short term. However, it is really a short term concern; in the medium term I expect that Microsoft could increase production to meet civilian demand. Moreover, rather than simply refuse to sell the consoles, Microsoft might legitimately demand a higher price per console from the government. As for the third, I’m no Don Draper, but I suspect that being able to say that SEALs and Rangers train on your gaming console would be a net boon for sales, rather than a drag.