Microsoft Surface: Killer Game Machine?

Before you laugh at the idea of Microsoft getting any traction in the marketplace with their Surface tablets, consider the following:

Halo 4 is headed to the Surface tablet. Microsoft Entertainment head Don Mattrick confirmed this at the GamesBeat conference in July: "Speaking during a panel at VentureBeat’s GamesBeat 2012 conference, Microsoft exec Don Mattrick mentioned that the upcoming first-person shooter Halo 4 will work with Surface. VentureBeat reporter John Koetsier confirmed this with Mattrick after the panel."

The Surface Tablet may retail for $199. Yes, the hot rumor making the rounds is that the base Windows RT Surface tablet, with 32 GB of RAM, a Tegra 3 chip, and a 1280 x 720 10.6 screen, and a keyboard, may retail for an astounding $199. How? Well, Microsoft could be prepared to take a loss on every one in order to gain market share and make it up later on software sales; they did this successfully with the Xbox, remember. Or Microsoft could make the price $199 with a contract for (say) Xbox Live or Microsoft Office or SkyDrive or some combination of services.

The Surface tablet will also come with a keyboard, which makes up to some degree for the lack of tactile controls (a joystick and buttons); after all, the FPS did arise on PCs with a keyboard and mouse as the controllers.

We could have a truly epic battle for the wallets of consumers this holiday, if Microsoft really takes aim at the $200 market with a 10.6" tablet. They could even cannibalize their own 360 sales. I'd have to think consoles, and especially the 3DS and the PS Vita, would be the big losers in this scenario. Even mighty Apple could feel the pinch both at the low end (the forthcoming iPad Mini would look a lot less alluring) and at the high end (if Microsoft pulled a similar trick with the Surface Pro and undercut the iPad).

The biggest losers would be Microsoft's erstwhile hardware partners, like HP, Dell, Asus and others, who would see any chance for them to sell Windows tablets vaporize. Microsoft would also lose revenue from that, but they may just figure that ultimately they'll make more from having a strong share of the tablet market as a hardware manufacturer.

Start getting the popcorn ready; this may be the best entertainment available until The Hobbit hits the screens in December.