Xbox One, This is Why Everyone Hates You
Josh | On 17, Jun 2013
image via Gaming Reddit user ElectricZ
“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.
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.
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.
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.
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.
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
- Ryse: Son of Rome
- Sunset Overdrive
- Killer Instinct
- Project Spark
- Crimson Dragon
- Dead Rising 3
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…
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.
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.
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).
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.