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FRONTBURNR | April 24, 2014

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Xbox One, This is Why Everyone Hates You

| On 17, Jun 2013

image via Gaming Reddit user ElectricZ

Update: Microsoft has listened to the community

“But Dad, I don’t want a shot.” “I know, son, it will be ok. It will only hurt for a second but it protects you against getting the measles which would really, really hurt.”
Microsoft, it’s that simple. 

Image via Dreefire 2012 (Deviant Art)

Describe more than the vaccination itself but also what it does. You have proffered an argument without context or premise and only stated the conclusion.

‘”Gamers, your world will be better through a digital, connected experience…”

Really? How so? Bigger maps, ghost A.I.? Sorry, not worth it. There is more to the story than what you are telling. There are stronger arguments for a digital future than you are reiterating and you’ve lost round one because of it.

It is time for me to follow up on my previous story, “Xbox One, Why does Everyone Hate You,” knowing the current scope of Microsoft’s launch plan.

Xbox One, this is why everyone hates you:
  • Aggressive DRM / Authentication
  • Price point
  • Forced world (Kinect, Entertainment Hub)

I am being overly facetious in how you have relayed your message but the perception of what you have said is quite simply this:  “Buy an Xbox 360 if you don’t like the new world. Digital is better, believe us.”

The strategy of, “this is better for you, do it or just stay where you are” is the most inane crowd outreach program I can imagine.

Microsoft has simply and egregiously missed why we should care about their solution.

Image via Reddit Gaming user Agirlnamedbenn

The road-map of the Xbox One reveal:
  • May 21st reveal focusing on the evolution of the entertainment experience
  • Pre-E3 explanation of core policies and restrictions
  • E3 showcase of games and price

This led to a scattered approach and defense of the core of the Xbox One experience. The order of these events was clearly intentional but misguided. It led to negative consumer opinion and automatically put Microsoft on the defensive instead of the agent of needed change.

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How this all should have occurred is through one, two hour event, followed by an articulate clarification of policies and a robust defense of those solutions. I can imagine an extensive Q&A and press discussion following the reveal but that would have made too much sense.

Step 1 – Tell us what problem Xbox One is really solving

Microsoft did not explain the fundamental issue.  Xbox One was said to solve the need for the fractured living room experience. This is just a feature, Microsoft, not what you are truly solving. Microsoft aims to have the Xbox One save the gaming industry itself. Whether or not their solution is correct, that is the target.

The gaming industry is failing. Nobody wants to admit it but the core cost structure of how games are made, distributed, marketed and sold currently does not work.

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Physical media distribution is killing a margin-deprived industry.

The issue is not because new consoles are not in the marketplace; it is because the cost of the experiences (more than just development) we have become accustomed to, do not match the revenue they generate. Microsoft aims to create a more efficient digital pipeline and marketplace while expanding the existing console base to a new mass consumer that is driven by varied media experiences.

Did you know this was what they were solving for? Nope. Not your fault. Microsoft just has not explained why a digital future is at the core of fixing the gaming industry. This is what they mean by “future proof.”

This should have been the opening. Microsoft as the hero. The agent of change into a failing marketplace that is coming to the rescue. End scene.

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Step 2 – Show the games first

The majority of Microsoft’s first reveal of the Xbox One should have been the meat of their E3 event. Could you imagine if the first time you witnessed the Xbox One was with Metal Gear Solid V?

This is only some of the amazing experiences that you will experience either exclusively or first on Xbox One that were revealed during their briefings:

  • Battlefield 4 and Call of Duty: Ghosts DLC first on Xbox One
  • FIFA Ultimate Team DLC
  • Quantum Break
  • Forza5
  • Halo
  • Ryse: Son of Rome
  • Sunset Overdrive
  • D4
  • Killer Instinct
  • Project Spark
  • Crimson Dragon
  • Dead Rising 3
  • TitanFall

Regardless of fan bias, this is an incredibly strong launch point for any new console. It should have been the key cornerstone for Xbox One. “Features” are quite simply not where you should lead off from.

Step 3 – Supporting features

If I went to my favorite steakhouse and my waiter served the potatoes first and told me I had to wait an hour for my filet, I would be pissed whether it was some good mash or not. Oh, in the meantime, the waiter would tell me that I can’t have a doggy bag and give no explanation as to why.

Arguably, Microsoft’s feature hubs below create a multi dimensional approach to entertainment interactivity. Each enhancement provides exclusive opportunities for Microsoft and the user but they are not the experience in and of themselves:

  • Kinect 2 (Revolutionary approach to in home motion capture)
  • The best controller (debatable, of course)
  • Evolving Achievements / Social experience (In depth profiles, media sharing)
  • SmartGlass / Windows Integration (Multi-tasking, connected experience)
  • Entertainment receiver (Instant input switching)
  • Business partnerships (NFL, Publishers)

Microsoft simply over-valued their supporting cast as the center of their experience and then provided the tough news of aggressive authentication prior to any explanation to why their new platform is truly compelling. However, in my opinion, the features of the Xbox One are not paralleled by any other entertainment platform available. The perception problem occurs the moment you fall in love with your own solution instead of thinking through the value your consumer places on it.

Now show the console…

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Sony was able to win E3 by simply making a better PS3.

What would you have thought if this was how the Xbox One was revealed? Would it have left a different taste in your mouth? It would have been clear that refinements would need to be made in terms of policy regardless but the tone of the discussion could have been remarkably different.

Sony built an amazing experience with the PS4, it truly is a gamer love song and I cannot wait to own it. Make no mistake, I have been a proud Playstation advocate since MGS but I’m objective enough to know that it would be a tough fight toe-to-toe with the Xbox One in terms of overall features and user experience if Microsoft adjusts to a more consumer-first approach to their policies. 

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Now, lets remember why everyone hates you Xbox One

Aggressive DRM / Authentication:

Physical inventory is the death knell to expensive media. Cost of capital, logistics and life-cycle management are all factors that erode the profitability of the gaming industry. Every time you see a price move on a physical disc from $59.99 to a new low price of $39.99 it is co-funded by a publisher via price protection. Forcing media to be apparel in a retail environment does not work without having the same opening margin structure and gamers are not about to shell out $100 for a new piece of software.

Every time a game goes into clearance it becomes a hard write-off for the retailer who in turn demands allowances from publishers to help support aged goods. Why would the publisher agree to this? Because the retailer is the sales pipeline for new goods being purchased and currently has the end-game leverage. In an industry where the profit margins exist below double digits, one wrong move either on the retail or publisher side can put a company into the red for an entire year. Some beyond recovery.

The reliance on physical inventory is what erodes risk-taking and innovation.

Now, add in the used gaming issue into this volatile market. The recycling of capital instead of sending it back to the developer and publisher eliminates any ability to recover losses. It forces unsustainable perfection. Used games may be traded in to purchase new games but the individuals who are buying used games in turn are no longer purchasing direct catalog. It erodes the functional library for the publisher and the ability to offer deals for “long-tail” goods. We are in the age of “launch and done” thanks to the used game industry. That is not a viable system.

A digital marketplace would allow for deeper discounts, merchandising flexibility and the re-invigoration of “long-tail” catalog opportunities. You may disagree with this stance but might not if you have ever seen a retail or publisher balance sheet.

There are without question optimization opportunities within publishers, developers and retailers. However, at the core, physical distribution and the layering-on of the used game business sets obstacles that are hard to overcome right from the outset. It isn’t hitting one bulls-eye in a row, it’s hitting ten with different partners.

A truly digital marketplace could provide a sustainable business model for the video game industry. To make this transition you need a platform similar to the Xbox One to carry you through to the other side. A massive online community backed by an expansive cloud network is a tremendous solution to the problem of profitability for gaming.

From a user experience perspective, no-disc swapping, account-sharing and the entertainment hub experience become possible and convenient. The Xbox One enters this arena with the appropriate server investment as the perfect platform to be “future-proof” into the inevitable transition from physical media to digital.

This is the solution Microsoft is providing. It is a machine that provides the most connected experience possible in an age where the digitalization of media is a mandatory step.

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Without question, the unresolved issues are many

Microsoft has mistakenly not solved for an adequate offline experience. 24-hour authentication is quite frankly beyond the scope of my understanding. It is a needlessly restrictive barrier for any consumer. Do accounts need to be synched with a digital platform, yes, I believe they do. Daily check-ins however quite frankly completely miss the mark with consumer confidence and actual use cases.

Last time I checked, I am not able to share my iTunes catalog with other individuals (easily) yet I can listen to my music offline. Why should games be any different? Even Steam only authenticates monthly as a point of contrast and offline play is still possible.

Microsoft is trying to solve for the 1% of problem usage by effecting the 99% in a much more dramatic way than they should. This policy should be revisited immediately and would solve the majority of their issues.

The Xbox Gold sharing plan actually does provide the ability to lend games to your core personal network fairly easily and you are able to bring over your entire library through your profile when looking to play at a friends house. I find the lending a game to a friend argument being levied against Microsoft to be fairly shallow in lieu of this (pending the 24-hour authentication issue).

Price point:

Where is “Kinect2″ again? The $499.99 price point becomes more palatable after you explain the key benefits of “Kinect2!” In comparison to the PS4, there are built-in features that enhance the experience to relate to this price point but Microsoft certainly did not tell this story effectively.

“Kinect2,” a complete entertainment receiver and Windows integration make for a very powerful user experience that is reasonably compared to a tablet or smartphone purchase.

Even still, the $500 price point is still surprising. After testing a $99 Xbox 360 with 2-year activation plans, why was this type of arrangement not provided? Microsoft could easily have solved the opening price point issue with a similar type of approach. I would like to see this implemented quickly in order to offset the price discrepancy with their main competition.

Forced world (Kinect, Entertaiment Hub):

In many ways this is a point of personal preference. I love Kinect and utilizing all of the entertainment experiences Xbox 360 provides and I look for them to be even more compelling with Xbox One. Many gamers do not use these devices and it may feel imposed upon them. It cannot be mistaken that the mass consumer and a majority of individuals do find this to be a great combination. If Microsoft can assume certain functionality with each console it opens up development opportunities and the ability to create with a more robust palette.

I can see both sides of this issue but I do not think the majority of individuals are buying or not buying an Xbox One because of “Kinect2″ and the expansive entertainment features.

They are not going to buy Xbox One because of daily check-ins and the ability to own physical copies. One argument Microsoft has to adjust to, the other, well, the industry cannot be lukewarm on this issue. Either embrace used games and reduce Triple-A experiences from what we have become accustomed to or finally draw a line in the sand and tell gamers the truth about the industry.

Xbox One, you have not had the opening round any of us would have liked to have seen but you can provide the vaccination to a very sick industry. From the reduction of expenses to the convenience for the end user, a digital and connected landscape is not a future to be defensive about but something to be embraced.

It’s time to get off your PR soapbox, get in touch with ground level perceptions and defend the future you are fighting for. It is also necessary to not allow hubris or the appearance of being beyond reproach to alter policy decisions that are not core to your business model. The ability to change is a hallmark of flexibility, not weakness.

Gamers may end up disagreeing with you but at the very least they will understand the context.

The ball is no longer in your court Microsoft, time to make a play.

Comments

  1. Rocamx

    WRONG! I will buy the xbox instead the same fucking shit experience of PS4! Any of these policies affect me, i like digital and Ms delivered some great games! I prefered xbox live than “ps plus”. The only thing that i like of ps 4 is that not requires connection but what? All of my devices are connected every single second to the internet! Why not the xbox??

    • joshdeane

      Not to be rude but did you actually read the article or is this just veiled sarcasm.

  2. born4this

    I can see how the title can be taken as Microsoft bashing, but the post is actually positive overall. This is the first thing I’ve read that actually helped make some sense of Microsoft’s strategy. Feel free to hire Josh to do PR for you, Microsoft. :P

  3. Charles Colp

    One area I didn’t see covered is how useless many of their “exciting” new integration features are to the millions of cord cutters. We haven’t had cable in 2 years. We stream everything. So many of the new features are useless. We will get one for the exclusive titles. But we are switching from a 3 XBOX and 2 ps3 house to a 4 ps4 and 1 XBOX one house. I also am not comfortable with a camera that will be compromised at some point, in our bedrooms. I don’t hate the XBOX one but find most of the features useless to our gaming family.

    • joshdeane

      In terms of cable, totally get what you are saying. Do you think though that for anyone that doesn’t have cable, wouldn’t only TV watching be affected? It would still seem that streaming all of the apps that you are using would be available through the X1 and you would be able to do that with one device, while switching to the games experience seamlessly.

      • Charles Colp

        Yes I think those features may end up being useful. Honestly though all of our TVs are Samsung smart tvs. They have our hulu plus, Amazon prime, and Netflix built in. So if I pause a game on the ps3 or XBOX now I switch source to watch something then switch back to play again when I am done. We are still planning to get one for the living room and will use it regularly. But we are switching our primary gaming system to Sony.

        • joshdeane

          It’s definitely a convenience play, totally right. I would not have led with that as the core of what they were selling to be honest. It may end up being redundant to some but really compelling to others. The PS4 looks incredibly strong, won’t go wrong with it.

  4. Jonathan Thrower

    I’m not happy about the camera which is the reason that puts me off the most. Not to keen on loosing my physical library but I do understand the need for digital pipelines and while having to check in is a pain I wouldn’t be against it if it was closer to every month. Just let me say again, not going to be able to get past the camera.

    • joshdeane

      Totally respect that. Just curious, what about the camera puts you off the most?

      • Jonathan Thrower

        I think its just the thought of having an active camera looking at me all the time. Its not that I believe anyone is looking at me and my incredibly boring life with my girlfriend only that the potential to do so is there and I find that a little unnerving. Also, if I can cut the camera off through my system settings then why can’t I just unplug it and not use it all? I understand that Microsoft is only putting these in here to get developers to think more about developing games that will use it (it is an incredible piece of technology) but why do I have to use it if I don’t want it?

        • joshdeane

          Makes sense. You are correct, you can turn it off to alleviate the stress of the watch dog.

          Your question leads to the fundamental issue, why do I have to use it if I don’t want it. Two things Microsoft has to do for you. First, they need to explain why this new tech is so extraordinary that it deserves to be hard bundled in, they have not done so yet. The second reason is there are technical/strategic reasons for including it that they have only hinted at. There are computations that the Kinect will be processing for the Xbox One that Microsoft have hinted are at the core of the system but also why developers, knowing that a Kinect will be with every Xbox One, will use the camera in unique ways to drive demand.

          The Kinect may actually be a very compelling reason to buy the Xbox One more than a hindrance but they have to tell that story or there will be many more like you (deservedly so) that will have the same issue.

  5. Roxor

    Interesting article. While I think most gamers hate the inclusion of Kinect, I think it was the right move for MS.

    It is the most distinctive feature MS has when compared to Sony. It has the potential to make the gaming experience completely different, in a way that no one (be it sony, nintendo, apple, pc etc) can currently compare with. However the only way to ensure developers will take time to program features for the the new kinect is to make sure they knows every user has it.

    If you start seeing games that have exclusive features for kinect (that are good of course) that can easily convince some gamers as well as a lot of non-gamers (i.e. families) to purchase an xbox. Its a risk MS is willing to bet, which of course doesn’t set well with a lot of “core” gamers, but may find to be much more popular with non-core set.

    Josh with out a doubt this roll out MS has done, has been nothing but failure after failure, its like they have had no game plan and seem to be reacting to everything instead of being proactive.

    I’m sure its much easier sitting back an critiquing after the fact, but I would agree MS would have been much better off following your advice. It will be interesting how they dig themselves out of this PR hell they’ve created.

    • joshdeane

      Totally right, hindsight is always 20/20. As a true fan of the gaming industry itself a strong Microsoft is better for everyone. I believe they can dig themselves out of this, I just hope they do it from the perspective of “we listened.”

      • Roxor

        Its amazing that little statement “a strong microsoft is better for everyone” is so often over looked. I’ve never understood why people want competition of a product they purchase to “die”. Competition is always good for the consumer, while I will not buy a Wii U I truly hope they pull through this slump, because more competition = more choices, competitive prices and ensuring a focus on the future, and that is only a good thing. So many fanboys seem not to understand this simple statement.

      • Jonathan Thrower

        I think they did listened. I was just reading where Xbox was removing the 24 hour check-ins and reversing course on the Xbox One DRM. I wasn’t a fan of the check-ins but understood why the industry needed a digital pipeline and more suitable way to deal with game sales.

  6. David Andrews

    Sick article, I love it. Then there was this.

    http://gizmodo.com/microsoft-just-gave-up-on-its-xbox-one-drm-514393553