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Microsoft (MSFT) has been the tech world's biggest tease for years.

Last year it was teasing Windows 8 and Windows Phone, both of which were flops. This year it's teasing the Xbox 720, and the argument this time is it just can't flop because Nintendo has already flopped with its Wii U and reviews of Sony's (SNE) coming PlayStation 4 were fairly brutal.

The trouble is that Microsoft already dominates the U.S. console market. It has little traction in Japan and is unlikely to gain any, mainly due to the nature of how people in Asia and North America tell stories.

And the console market is, thanks to Moore's Law, slowly circling the drain.

What people in the gaming market call the rise of "social gaming" or "mobile gaming" is actually a move away from the network edge, toward its center. Just as the cloud allows your experience of a Web site to be improved dramatically, all at once, without doing anything, so it is with gaming. The problem, until now, has been that the Internet's latency was too high for online gaming to be practical. This led to an arms race at the edge, with consoles competing with game-based PCs like Dell's (DELL) line of Alienware machines.

That arms race is ending, as the cloud enables the creation of vast new gaming realms and as latency improves within the network. Development is increasingly moving toward online games, away from consoles, and it's the lack of titles that drives console sales lower. If Electronic Arts (EA) ain't moving, in other words, Microsoft ain't moving.

Besides, a console is stationary. It sits in one place. It's plugged-in. People, even kids, no longer want to just be plugged-in. They want to move around. And this reduces the desire of even young gamers to play on consoles.

These problems won't be solved by new console hardware. Microsoft's last Xbox was helped enormously by its Kinect interface, but Microsoft has somehow failed to take proper advantage of Kinect. It has nothing new like the Kinect to offer this time, just faster hardware. And speed is not the issue.

Adding something like a mobile Kinect interface to a mobile Xbox would be exciting, but there is no indication Microsoft has anything like that in mind for its April press announcement. It's going to end up like the Sony event, a disaster in which developers bored the crowd and the company couldn't even show any working hardware.

If I'm wrong on this you'll have plenty of time to get into Microsoft. Don't just pile in expecting a pop.

Source: Don't Buy The New Microsoft Xbox Tease