Think Windows Phone is out for the count? Think Xbox, then think again

Turning Windows Phone into a mobile player won't be easy, but it isn't impossible...

The Windows Phone operating system might not be the biggest earner in Microsoft's portfolio but don't write it off just yet, says's Jo Best.

Psst - wanna know how much Windows Phone has earned Microsoft? The good folk over at online Seattle newspaper Seattle PI have been doing some digging through Microsoft's latest filing with the Securities and Exchange Commission, and found that Microsoft's mobile efforts earned the company around $613m in the last financial year.

Well, not even that. The $613m figure includes Windows Phone, Windows Mobile, touchscreen table product Surface, IPTV offering Mediaroom and the Zune media player. Subtract all those products' contributions from the $613m earnings figure and Windows Phone doesn't look like it's putting an awful into Microsoft's coffers.

Windows Phone 7 homescreen

Windows Phone 7: Is a resurgence possible?Photo: Bonnie Cha/CNET

It's a fact Microsoft CEO Steve Ballmer himself acknowledged at Microsoft's Worldwide Partner Conference in July when he described Windows Phone as "going from very small... to very small" since its launch last year.

While it's easy to snigger behind your hand at Microsoft's apparent failure, writing off Windows Phone as a lost cause would be unwise.

Let me take you back a decade or so to another time when Microsoft was soundly derided for its attempts to enter a new, slightly cool market. Yes, we're talking Xbox.

At the time Microsoft was readying its entry into the games console market, the industry wasn't short of 800lb gorillas - PlayStation, Nintendo and, perhaps more a 400lb gorilla, Sega.

Nevertheless, it sold Xboxes by the truckload and became an 800lb gorilla in its own right in the gaming market, selling some 24 million consoles.

What Microsoft did with the Xbox has parallels with its mobile efforts - not just because it shows that it's possible for Redmond to come from a standing start to taking a significant slice of a market, but because it shows Microsoft learned a valuable lesson about ecosystems that could serve it equally well in mobile.

Why did people buy the Xbox? It wasn't for the specs or the brand name - it was for what the console brought with it. In short, they bought the Xbox because of Halo, the science-fiction first-person shooter. In short, the Xbox succeeded because of the ecosystem around it.

That lesson also came into play with the Xbox 360 - while it wasn't the first console to do online gaming, it was considered the best at it. XBox Live mandated broadband, making sure games had the speed they needed. It also featured clever additions such as making sure friends lists went across any number of games, rather than being linked to particular titles, and offered users extra content such as demo games. In short, the ecosystem was right.

The ecosystem made the difference for the Xbox and it will make the difference, for good or ill, for Windows Phone. Today, the golden rule in mobile is...