Tactical Collusion by Microsoft (Chapter 9)

Ch. 9 - Tacit Collusion: Cooperation to Reduce Competition

This chapter focuses on how firms within an industry cooperate in order to reduce competitiveness and raise prices above competitive levels.

One of Microsoft's most successful collusion tactics is strategic alliance. The firm often forms an alliance with companies in a closely related industry in order to gain a competitive advantage. One of the most overt example of this tactic is seen with Microsoft's Xbox segment. Microsoft forms alliances with game development companies which allows for exclusive content or early release of content. Examples of this include partnerships with Activation's Call of Duty series where content has been available for Xbox month's earlier than other consoles. Another example is an alliance with 343 Industriesand whereby the wildly popular game "Halo" was only available on Xbox.