Earlier this morning, Microsoft announced a raft of changes to its upcoming Xbox One platform in response to palpable gamer outrage. Barely a week after its controversial E3 press conference, the company has back-flipped on DRM and used game restrictions — the console will no longer require you to connect to the internet every 24 hours and disc-based games can be sold and swapped at leisure. While this is a partial win for consumers, from a business perspective it can only be viewed as another blunder.
When Sony launched the PlayStation 3 at E3 back in 2006, the resultant backlash could only be described as an embarrassing disaster. With an eye-watering Australian RRP of almost $1000, it was significantly more expensive than the competition. The inclusion of a Blu-ray drive was also heavily criticized: at the time, it was a completely unproven format and many thought it was a terrible gamble on Sony's part. Even the physical appearance of the console came under fire, with snarky comparisons to the George Forman Grill littering the internet.
At the time, I was working for GamePro magazine, and like most of the gaming press, our coverage was far from glowing (for our money, the PS3 came a distant third behind the Xbox 360 and Wii). In a single dodgy E3 conference, it felt like Sony had managed to lose the console war. Some commentators even went the whole hog and predicted the entire company's ruin.
The whirlwind of vitriol easily matched what Xbox One went through at E3 2013. But unlike Microsoft, Sony chose to weather the storm. It turned out to be a sound business decision — while the price of the console was tough to swallow, the global sales showed consumers were willing to pay more for a quality machine if the games and features delivered. Meanwhile, the Xbox 360's lack of a Blu-ray drive turned out to be a thorn in its side for the duration of the console's lifespan.
If Sony had caved to consumer pressure, pulled the Blu-ray drive from the PlayStation 3 and lowered the price, we would have ended up with a far less compelling machine. In a sense, the same thing can be said about the Xbox One. Don't get us wrong; draconian DRM and disc restrictions are terrible and we're immensely glad they've been pulled. But that's not all Xbox One owners will be losing:
These changes will impact some of the scenarios we previously announced for Xbox One. The sharing of games will work as it does today, you will simply share the disc. Downloaded titles cannot be shared or resold. Also, similar to today, playing disc based games will require that the disc be in the tray.
In addition, consumers will no longer be able to share and resell their digitally purchased games, which was one of the most future-facing features of the system. The hugely compelling 10-person share plan has also been scrapped, as has the potential for a Steam-like ecosystem where all your games are accessible online, no matter where you are. In other words, we're basically just getting the Xbox 360 again, with prettier graphics. It's a PS3 with a DVD player.
But it's about more than what consumers are losing. By getting spooked and doing an immense turnaround, Microsoft has proven to the world that it has no confidence in its own business decisions or product. Instead of waiting for the furor to die down and staying on message it has done a complete 180 (which is what many sly wags are now calling the new console — the Xbox 180).
We think Kotaku editor Mark Serrels puts it best. We'll leave you with his sober assessment:
Have we ever, ever in the history of the video games industry, seen such a tremendous, catastrophic mismanagement of public relations? It is my humble opinion that the Xbox One is worse off today than it was yesterday. You may disagree with that conclusion but the one thing we can agree on is this: Microsoft colossally screwed up its messaging with regards to the Xbox One. It cowered in fear when it should have led with the benefits. When it should have been beaming with pride, it acted like it had something to hide. Now we're all going to suffer.
What's your take on Microsoft's Xbox One revisions? Is it an epic win for consumers or a step in the wrong direction? Let us know in the comments section below.