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TL;DR: The Xbox One- Poor Marketing and Business Management All Around

By this point, anyone with even a remote interest in the video game industry has heard about the tumultuous past few weeks for Microsoft’s next-gen console, the Xbox One. For the purposes of this piece, let’s do a quick recap. Microsoft announced a console that required DRM and needed a constant internet connection to keep tabs on player’s game libraries. So far as the general public knew, particularly after Jimmy Fallon’s misunderstanding of the situation, the Xbox One absolutely blocked the ability to play used games; effectively doing away with the sharing or reselling of games. After incredible fan backlash, ranging from folks who enjoy the ease of trading physical games and sharing titles amongst friends, to active service military personnel who were unhappy about the persistent online requirement and mandatory Kinect integration, Microsoft pulled a compete Xbox “one-eighty” yesterday.

As it now stands, the Xbox One will no longer require an internet connection to play offline games, nor will there be any authentication process when purchasing physical copies of games. Gone are the policies hurting used game sharing, so what remains is basically in line with today’s current standards upheld by the Xbox 360. Finally, the system will no longer be region-locked; thus allowing any console to play any game from any region. The drawback to this is that digital games can no longer be shared under the proposed “family plan,” which would’ve allowed up to ten close friends and family members access to an Xbox One profile’s personal library stored in the cloud. This also means that games require the physical disc to be inserted into the console to run; so even if players install games purchased as a physical copy to the hard drive, the disc will be needed to run the game, as it currently does on the Xbox 360.  

I know this feels like a victory to everyone who yelled and complained about Microsoft’s unreasonably anti-consumer policies. I know gamers think things are going to get better now that policies are pretty much remaining the same as the current console generation. Unfortunately, that’s not entirely the case. There’s more at stake here than the average consumer realizes, and I’m here to tell you that, even though Microsoft did an absolutely horrible job conveying this message, their policies weren’t done simply to spite gamers and turn the Xbox One into an exclusive toy for privileged rich kids: There was, in fact, a method to their madness. We just didn’t know it. We couldn’t have known it. And that’s not our fault, it’s theirs.

Seriously, folks, put down the angry mob gear

Instead of just admitting that things got way out of hand, Microsoft would have you believe they had two plans all along: One that contained all of the previous policies such as always-on DRM, and a contingency plan that didn’t require any of the focus on a completely connected online experience. This is half true. In fact, it is exactly a half-truth. Because Microsoft didn’t have two plans, they had two half-plans. Now, for the folks who don’t have a background in management, let me hit you with a little business equation to keep in mind, should you ever own your own company. I know math is scary, but I promise this one’s not so bad. The equation is this: 1 half-plan + 1 half-plan = a PR sh*tstorm; resulting in misinformation and contradictory statements made from each different team member that is asked a question about policy.

That is exactly what happened to Microsoft. Different people were privy to different information, and neither side knew which one was right. That’s why we had Microsoft PR reps telling us that 24-hour check-ins and online activations of used games were “potential scenarios;” because, so far as anyone knew, they were exactly that. There’s no justification for this. The team at Xbox had one job: delivering a consistent message about Xbox. Not about Microsoft. Not about TV. Not about a freaking camera that can see my heart beating inside my chest and can tell me what I ate for dinner. All they had to do was come to a mutual understanding about what the Xbox One was going to do, and how it intended to do it. They… failed. They screwed up big time. “Epic fail” is one of the dumbest things the internet has ever invented; but dear, sweet Mary Margaret, team Xbox couldn’t have botched this surgery any worse if they accidentally used a chainsaw instead of a scalpel. Not since “New Coke” has a product been so out of touch with consumer interests, further compounded by mixed messaging that only made the world trust the new product even less, because we simply didn’t understand “why?”

At this point, Microsoft had no other choice but to reverse their decision. They backpedaled due to fear the console wouldn’t sell; a fear totally justified by the legions of gamers swearing off Microsoft for good. Was that a bit of an overreaction on the part of gamers? Totally. These consoles aren’t coming out until the end of the year, which means Microsoft had plenty of time to justify why these policies were in place. All they had to do was show us the benefits of an always-on experience, and when it came time to put up or shut up, Xbox told us to “deal with it.” They told us that, “if you’re backwards compatible, you’re really backwards.” They even had the nerve, the absolute nerve, to say that “we have a product available for people who aren’t able to get some form of connectivity. It’s called Xbox 360.” That is the closest thing a company can get to looking a consumer right in the eye and telling them, to quote a lovely artist by the name of Pink, “it’s just you and your hand tonight.” This near-fictionally comical level of arrogance on display only serves to reinforce how frightened Microsoft was of losing customers. For them to go back now is the equivalent of Hidalgo apologizing to European-born Spaniards before the firing squad put him in the dirt. So, of course they changed things. The problem now is, does it matter?

If he treats his wife the way he treats his customers, I imagine showing off the Xbox One isn’t the only thing Mr. Mattrick needs that hand for…

The truth is, whether or not Microsoft keeps their policies concerning DRM and always-on in effect, the future is already headed in that direction. The idea of always-on isn’t going to go away, but what needs to happen is that consumers need to be eased into it and educated as to the specifics of why it’s necessary and how it benefits them. Think of the majority of new games that were shown at E3 this year. Do you know what titles like Need for Speed Rivals, Tom Clancy’s The Division, Titanfall, Destiny, Watch_Dogs, and Sunset Overdrive all have in common? They’re all connected worlds, seamlessly blending single-player and multiplayer into a solidified universe. The divide has totally been erased. That’s the technological leap next-gen consoles are making. Not graphics, not 60 frames per second; but a solidified universe. We’re no longer buying a single-player game with a multiplayer component, or vice versa. We’re buying a persistent world. But what that means is that these AAA titles everyone will want to play won’t function as intended without being always online. Without the power of the cloud to help process these massive, dynamic environments, they simply aren’t possible; a crucial fact that neither Microsoft nor Sony properly conveyed to the community.

Developers built these big budget “next-gen” games around the idea of a persistent always-on experience, so policy changes or not, there’s no going back at this point. Relinquishing the need for DRM and daily check-ins will only help the offline-only titles being developed, and how many of those do you think exist out in the world? Not a heck of a lot. So truthfully, in the long run, we are actually going to need the systems Microsoft originally put in place, which is why they still reserve the right to flip everything back on a couple years down the road when people have a better understanding of what being a “next-gen” game actually means. Because in order for these consoles to function as they are intended, and this is true for both the Xbox One and the PS4 whether Sony admits it or sheepishly shifts the blame to Microsoft, they will require a constant internet connection. To provide the best possible gaming experience, they will require a constant internet connection. Whether or not we all agree this is where gaming should go is obviously debatable, and more obviously not the issue. The fact is, that’s the plan, and Microsoft and Sony have to stick with it now that every major developer and publisher is pouring millions of dollars into the idea of persistent worlds that both console makers agreed to.

To the people who were speaking on behalf of those in rural areas or dead zones without internet connections, and especially those who came to the defense of service members fighting on behalf of their countries the world over, I get it. I totally understand the frustration, and I was right there championing the cause alongside of everyone else. But taking these features out wasn’t the solution here, because now everybody loses. Now everyone loses the “family share plan” and physical disc installations that can then be played off the hard drive; a feature perfect for collectors who adore seeing a full shelf of games but want that easy access to their entire digital catalog from any Xbox One console. Microsoft will site piracy as the reason we can’t have these features back, and since no one has a better anti-piracy system in place, it’s hard to fault them. It’s hard to say “give us the family sharing plan but without DRM” when pirates would just start selling “offline only” Xbox One consoles with 20-30 preloaded games on them borrowed from a central hub unit. Ten degrees of separation goes a long way, and without DRM or a similar yet-to-be-invented system to moderate it, an entire community could have access to hundreds of games having only purchased a fraction of them.

And that’s only six degrees of separation…

Instead of simply reverting back to current policies, the real answer was to make exceptions for folks in specific situations who couldn’t abide by the Xbox One’s demanding restrictions. Soldiers on deployment should absolutely have been granted some sort of “voucher” that allows them access to all of their games without the need for a DRM check or a steady internet connection. Folks in noted areas where internet is simply not available to them, or otherwise incapable of meeting the download speed requirements, should have had similar exceptions made. If Microsoft and Sony want the future to be always online or require DRM, then it’s unquestionably up to Microsoft and Sony to figure out how to make that work for every single consumer interested in their product. If family sharing isn’t possible without DRM, then it’s on them to figure out another way to get that already-announced feature to us; because it is not the consumers fault for being uncomfortable with such unreasonable demands, especially when those demands were not carefully laid out and explained properly so we could see both the positives and negatives.  

The question is, how did all of this happen? How did Xbox get so off course? We’ll likely never know the full story, unless someone writes it in their dying memoirs anyway, so for now I have a temporary hypothesis: Microsoft thought about the possibilities of how these features would benefit their consumers in the long term, but never once stopped to consider the practicality of such severe changes. For example, I’m betting Microsoft thought to themselves, “wouldn’t it be cool Kinect was always in sleep mode so you could turn the console on at a moment’s notice?” As a designer, that sounds like an excellent and convenient feature that any consumer would appreciate, until the folks at home realize that Kinect is a high-quality camera that Microsoft just programmed to watch, record, and listen to our every action. Perhaps blinded by arrogance, Microsoft thought we would just trust their vision of the future and allow these features into our homes without concrete details concerning why these big changes were necessary for next-gen consoles and how, specifically, they would benefit us as gamers. The result: A lack of transparency on their part led to a lack of trust on our part. The public rightfully reacted poorly because Microsoft couldn’t properly relay the benefits and reasoning behind their decisions; an error they will now spend the next five months paying for as they attempt to earn back consumer confidence.

But there is one final thing to consider before writing Microsoft off. Simply turning our back on the company and giving up on the Xbox One is not the ideal response to all of this. As an industry, we need competition, and no reasonable person should wish for Microsoft to crumble and Sony to command a monopoly over the industry. (Relax Nintendonites, and understand that Nintendo fans buy Nintendo consoles to play Nintendo games. The Big N has no interest in competing against Sony or Microsoft. They simply do their own thing and are all the better for it.) A scenario like that would only ensure a future where consumers don’t have the ability to reverse policy decisions like what we’ve just seen.

“That’s just how we do”

I’m not saying we should support awful business practices for the sake of competition, I’m just saying gamers need to believe that Sony is still a business just like Microsoft. If anything, they’ve been coy if not entirely sneaky about their decisions moving forward. Just look at how they snuck in that single slide about the PS4 requiring a PS+ subscription to play online. The PS4 doesn’t “require DRM,” but it’s also completely up to the publishers. The PS4 has the ability to block used game sales, should publishers decide to enforce the function. The truth is that the PS4 is every bit as capable of enacting the exact same policies as the Xbox One did; the difference is they planned to do it slowly over time and bill it as the evolution of a great service that is for the benefit of the gaming community. Sony impressed everyone at E3 this year because they told us exactly what we wanted to hear, and left out the stuff they knew we wouldn’t like. They might look a lot better than Microsoft right now, but I can promise that Sony isn’t a white knight in all of this. Both parties lobbied to push gaming into the always-on, cloud-based space; unfortunately for Microsoft, they were just the ones who got caught holding the knife and covered in blood stains. What’s more, their arrogance about the whole situation won’t help garner any sympathy, not that they deserve it.

So, here’s where we’re at. The future is clear: Gaming is going in a direction that requires an always-on connection. The next stage in advanced graphics, AI improvements, architectural design, and resource management is based on cloud gaming and constant, high-speed internet access. That’s still not changing, whether these policies are instated now or three years from now when they legitimately must be enforced in order to access full game content. Always-on is the new “detective mode,” and every game will want to take advantage of it and the power of the cloud once people understand the benefits. There’s a small chance this whole thing was blown way out of proportion. If that’s the case, it’s partially our fault for fearing change and not trying to look deeper into the “how” and “why,” but it’s mostly Microsoft’s fault for not conveying the true gamer-centric benefits of always-on, or respecting our intelligence enough to lay all of their cards on the table.

If we take anything away from this disaster, this war (consumers vs. big business) leading to casualties on both sides (less restrictions but also less features,) let it be this: Publishers and console makers need to respect the educated consumer, and educated consumers need to know the right questions to ask. Better information would’ve led to a clearer understanding of why Microsoft felt the way they did, and perhaps that would’ve led to a mutual agreement, or at the very least a discussion, of which policies needed to stay in order for consumers to benefit the most. Where the Xbox One is right now is stuck somewhere in the middle, and while that is definitely Microsoft’s fault, consumers are the ones who will ultimately suffer. The unfortunate truth is that the Xbox One needs the original policies to function the way it was intended and maximize the truly “next-gen” experiences the industry sees as the future of gaming; but because of this nightmarish PR cyclone of misinformation and inconsistency, the console is caught out in no-man’s land. I sincerely hope Microsoft can figure out a way to salvage their next-gen system while maintaining at least a piece of their vision for the future. If not, the Xbox One will be a subpar successor to the Xbox 360; complete with half-baked ideas and unrealized potential. I don’t know about anyone else, but loyalties aside, I’d call that a damn shame.

You see, Microsoft, this is why we can’t have nice things

Alright, so that’s my long-winded pseudo-rant about the state of the gaming industry. I imagine a lot of gamers are feeling a variety of emotions, so feel free to drop a comment down below. This is obviously a topic that demands discussion, so as long as you can maintain some semblance of civility, I encourage you to share your thoughts and engage in what’s likely going to be the most important issue concerning the future of video games. I read every comment I get folks so I can promise you, your voice will be heard. Just try not to yell in my ear, I have sensitive hearing.

TL;DR is a whenever-the-mood-strikes soapbox, often weekly, where the industry’s latest issues are discussed at length. Commentary and a bit of lighthearted humor are often provided. If you like what you see, feel free to share the article with friends. 

(This post was taken directly from my employer at IGXPro, where I am a contributor. TL;DR is my original series, reproduced here because I think it's an issue worth discussing as much as possible. But, if you like what you read, be sure to like IGXPro on Facebook, follow us on Twitter, or give us the ‘ol +1 on Google+. [font=Calibri','sans-serif]If you can’t get enough of my shenanigans, (who could blame you?) you can check me out @GamingsNirvana, or add +VinnyParisi to your circles.)[/font]
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About MarvelFan89one of us since 11:20 AM on 01.02.2013

I guess I'm the typical, modern day nerd. I was raised right on Batman: TAS and old-school TMNT. I've been a core gamer since I was 2 years old (I was beating Mario before I could finish sentences) and haven't thought twice about it since. My favorite game genre is RPG for sure. I love the advent of channels like Nerdist and Geek and Sundry, and will never turn down an invitation to a Con. (Though I don't cosplay... yet.) I hate not owning the latest and greatest gadgets and aspire to find my place in the world of game journalism.

Favorite Games: The Mass Effect trilogy, Super Mario World, the BioShock series, the Ratchet and Clank series, anything featuring Nolan North.

Favorite shows: FireFly (Browncoats, unite!), Bones, Castle, Spectacular Spider-Man (RIP), Transformers Prime. Anything featuring the voice talents of Steve Blum, Gina Torres, Ashley Johnson, or Yuri Lowenthal.

Favorite Comics: Amazing Spider-Man (Thanks for the memories), most things featuring Batman, any one where Green Arrow makes an appearance.