Well, I'd love to stick up for Microsoft as Bill Gates and the Microsoft were instrumental in creating the information age that relatively young people such as myself often take for granted. However, the truth is there isn't alot of innovation that Microsoft has to do. They own a 90% share of the OS market and frankly apple and linux will never make a dent in that, there is no need for microsoft to innovate in the OS market.
As far as the console market they got over confident last generation with the Xbox 360 dominating the PS3 for the vast majority of generation and figured that domination would continue. Also things like DRM were solid ideas, however the implementation was so poorly done that it didn't matter.
My biggest problem with Microsoft is the same problem I have with every company like Microsoft. When you beat all your competitors soundly and becoming king of the market in which you operate there is no longer any reason to continue to innovate until a competitor comes in to challenge. Our best hope for the future is Google continuing push Microsoft in core business components like Office and OS.
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