Microsoft's Xbox One philosophy: give them what they don't want: Peter Nowak

It's the Surface Pro all over again.

Media crowd around the new Xbox One (Photo: Ron Wurzer/Bloomberg/Getty Images)

Media crowd around the new Xbox One (Photo: Ron Wurzer/Bloomberg/Getty Images)

With the dust starting to settle from last week’s annual Electronic Entertainment Expo in Los Angeles, all eyes are now on Microsoft to see how the company might recover from the unmitigated disaster that the Xbox One is becoming.

The saga began back in May with the company’s initial unveiling of the next-generation video game console—although calling it that is perhaps not right. Microsoft itself opted for the “all-in-one entertainment device” vernacular at its launch event, where it stressed the console’s ability to do video calls and control live television through voice commands. Games were barely mentioned and executives subsequently sowed confusion by giving differing information in various interviews as to how the company was going to handle second-hand games, as well as to whether the Xbox One would need a persistent Internet connection to play them.

Microsoft cleared up the confusion by posting some clear policies on its website a few days before E3, stating that the Xbox One will need to connect once a day to authenticate games and that publishers will be able to block used games if they choose. Gamers, meanwhile, will be able to give their games away, but only to people they’ve been friends with online for at least 30 days. All told, games will only be able to be swapped once, period. All of the limitations are designed to be friendly to publishers, who don’t see any direct revenue when players swap games between themselves and at stores such as GameStop.

Into this controversy rode Sony, which rejected all those restrictions at E3 in no uncertain terms. Sony Computer Entertainment chief executive Jack Tretton drew loud and prolonged applause at the company’s press conference by announcing that the upcoming PlayStation 4 will treat used games the same way previous consoles have—with no restrictions at all. To top it off, Sony announced a PS4 price tag of $399, or $100 less than the Xbox One, which will come bundled with the non-optional Kinect motion and voice sensor.

The differences in approach by the two companies couldn’t be more dramatic. Sony is clearly taking a populist position, giving gamers—their primary audience—what they want. As Tretton told me when I sat down with him at the event: “The people that ultimately drive the success of the platform are the people who look forward to E3 every year like it was Christmas. … There are some people who could tell you 362 days out when E3 is and there are other people who go, ‘What the heck is E3?’ The people we’re looking to sell to are those who know exactly what E3 is.”

Microsoft, on the other hand, is taking a very Microsoft-centric approach—the company is doing what it would like best, or trying to institute its own vision, rather than simply delivering what people are asking for. The company sees a future of cloud-based gaming, where discs are relics of the past and all entertainment—games included—is distributed digitally, thereby creating convenience and better experiences for consumers while giving content creators more control over their products.

It’s a win-win scenario that is working in media such as music and movies, where services such as Rdio, Spotify and Netflix are proving popular with all stakeholders. It’s especially appealing for Microsoft, which would like to own the living room by controlling the device that all such content goes through. But, as I’ve argued elsewhere, the infrastructure—both technologically and consumer-psyche-wise—isn’t there yet in games, meaning the company is trying to force a future that the world isn’t quite ready for.

It’s funny because there is one company that has made a habit of doing exactly that, with great success, Apple, and it’s becoming increasingly obvious that Microsoft would like to play the same role. There’s a big difference, though. Apple, or to be more specific, Steve Jobs, routinely managed to create things consumers didn’t know they wanted or needed. Microsoft, on the other hand, has fallen into the habit of trying to change things that consumers already like into things they don’t want or need.

Take the Surface Pro, for example. A few months ago, I wrote about how the high-priced device—Microsoft’s attempt at a hybrid laptop-tablet—would be dead on arrival because it would do nothing exceptionally well. Indeed, I suggested Microsoft might kill the whole bad idea and refrain from releasing the device altogether, but sure enough the company soldiered on, only to see the Pro become a big flop, mainly because it delivered none of what people wanted in a tablet—lightness, low price and good battery life, all of which were ironically established by Apple.

It could be argued Microsoft has done the same with Windows 8, an operating system that aimed to turn desktop computers into tablets, complete with touch-screen controls. In trying to fix what wasn’t really broken, the company again flopped and was forced to introduce updates that made the new Windows a little more like the old Windows. Again, were consumers really asking for a new experience or did Microsoft simply try to force it on them in an effort to make itself relevant in the tablet market?

That brings us to the Xbox One, another textbook case of the company trying to impose its will on consumers despite those same consumers delivering a relatively clear and straightforward message to the contrary. Will Microsoft reverse course and make the Xbox One more consumer friendly, or will it stick to its restrictive measures and higher price tag in an effort to force its future vision? If the Surface Pro and Windows 8 are any indication, stubborn heads will prevail, perhaps until it’s too late.

In other words, get ready for the next big Microsoft flop.