The irony here is that Microsoft cannibalized the PC gaming market to create the XBox market (and kill its one true enemy at the time: Sony). The result is -- arguably -- stagnation of the desktop PC market which was always -- I contend -- driven largely by gaming. The problem is that the desktop market made Microsoft money whereas consoles... not so much.
It seems to me that problem here isn't cannibalization -- if Microsoft hadn't done it, someone else (Sony?) would have -- but the "let's leverage our monopoly-driven money tree" mindset. XBox was dumped on the market at a loss, subsidized by Office/Windows and leveraged by Microsoft's dominance of desktop gaming, APIs, and developer mindshare.
Microsoft doesn't even try to play fair in new markets and eventually it had to bite them, and it did.
the desktop PC market which was always -- I contend -- driven largely by gaming.
For the leading edge of the desktop PC market, definitely (advanced graphics cards, fastest possible processor, fastest possible RAM).
On the other hand, the broad center of the bell curve of the desktop PC market has been driven by office applications. These have never needed the high performance that the gamers demanded - users simply wanted something "good enough for Word, Excel PowerPoint, and email".
The last half a decade I would say users are not as much driven by office applications, but by network applications, specifically the browser and email
It seems to me that problem here isn't cannibalization -- if Microsoft hadn't done it, someone else (Sony?) would have -- but the "let's leverage our monopoly-driven money tree" mindset. XBox was dumped on the market at a loss, subsidized by Office/Windows and leveraged by Microsoft's dominance of desktop gaming, APIs, and developer mindshare.
Microsoft doesn't even try to play fair in new markets and eventually it had to bite them, and it did.