While the big three typically use slowing sales to spurn development of a next-gen console, Microsoft might have an even better reason: imports on the Xbox 360 are in danger of being blocked. According to a Trade Commission judge’s ruling, Microsoft is in violation of four patents that belong to Motorola.
As soon as August, if this ruling is upheld, Microsoft might no longer be able to import the Xbox 360 console from China, where it is manufactured. If this happens, that would mean what is on retail shelves in August is ostensibly the last batch.
Apparently Microsoft was willing to work with Motorola in order to include their technology in the Xbox 360, but the amount in royalties that Motorola was seeking was far too much. Bloomberg’s report on the dispute contains some mudslinging from both parties, with both feeling they are in the right. Things definitely have the potential of getting ugly for both sides, and this Trade Commission ruling is only the tip of the iceberg.
This judge’s finding is only the first step in a process that will inevitably give Motorola the ability to block imports of the Xbox 360, and as it stands things aren’t looking good. Microsoft still holds out hope that once the ruling is reviewed by a six-member board it will be overturned, but that next step won’t happen for some time.
Nonetheless, Microsoft’s console continues to be dominate the sales charts, but with their claims that no Xbox 720 will be shown at E3 2012, it puts them in a tough spot. Nintendo, this year, is rolling out their Wii U campaign — a response to slowing sales for the Wii — but that doesn’t seem to be intimidating either Sony or Microsoft.
Most likely, if the worst-case scenario plays out, Microsoft will be able to pay Motorola a settlement, and continue importing the Xbox 360. We won’t know until August, which is after E3 2012, what Microsoft must do, so the chances of the publisher altering their announcement plans seem relatively slim.
What should Microsoft do if the Commission rules in favor of Motorola? Will this push them to speed up work on the Xbox 720?