Close
Are you sure? Are you sure you want to report this comment? I understand, report it. Cancel

Roundtable: Retreating across the Rubicon

Roundtable: Retreating across the Rubicon

Thu 20 Jun 2013 10:56am GMT / 6:56am EDT / 3:56am PDT
Hardware

What Microsoft's capitulation means for the next-gen balance of power

The issue hardly needs an introduction. Microsoft's reversal of its Xbox One DRM policy, a climbdown of Everest proportions, is perhaps a bigger story in itself than the furore which surrounded the confused and confusing announcement of the policies to begin with. Vox populi speaks loud and legion - and the ears of the powerful would apparently do well to listen. The internet has won, the consumer has won, Sony has won, depending on who you listen to.

But it's not that simple, really. How has this change been implemented so rapidly when we were told it was such an integral part of the machine and the ecosystem surrounding it? Do multinationals really swallow their pride so rapidly in public like this, or is everyone missing something in the rush to the second-hand store? Read on for the GamesIndustry International team's first impressions.

James Brightman

"Sony still has a leg up on Xbox One thanks to its $399 price and far more indie friendly stance, but at least the new Xbox now has a fighting chance"

The fact that Microsoft reversed its policies didn't come as a shock to me. In fact, I had been anticipating it ever since Jack Tretton threw his proverbial uppercut at Microsoft's chin as the audience in the Los Angeles Memorial Sports Arena erupted in applause. It was, in my opinion, the only logical course of action to take. What surprised me, however, was the speed with which Microsoft back-pedalled. Don Mattrick's legs must be in fine shape from all that pedalling! Microsoft knew that it had to act quickly, as the damage seemed to get worse by the day. In fact, I wouldn't be surprised if Microsoft had been spurred on in part by Jimmy Fallon who brought up the used games problem while hosting PS4 architect Mark Cerny. When the host of Late Night is seeding the mainstream with bad vibes about your console, you know you're in deep trouble. It's like the original Wii strategy, only in the completely wrong direction!

Microsoft did what it had to do. Let's not forget that this is a long, long battle. Who knows how long this upcoming console generation will last, but if Xbox One serves up some amazing software not sold on PS4, will anyone really care about this PR nightmare a year or two from now? No, it will be a distant memory, just as Sony's horrendous $599 PS3 launch is now. Admittedly, Sony still has a leg up on Xbox One thanks to its $399 price and far more indie friendly stance, but at least the new Xbox now has a fighting chance.

With this boneheaded strategy behind it, Microsoft must now put all its energy from now until launch into (a) making sure that everyone understands that its policies are now the same as on Xbox 360, and (b) ensuring that consumers have a plethora of gaming content to get excited for. Mattrick or Spencer need to make the rounds on talk shows, evangelizing for the Xbox One like Tom Cruise would for one of his upcoming films. The fact that Microsoft acted so quickly means the company has ample time now to get the right message out - but for God's sake Microsoft, please figure out exactly what that message is first. Because you looked like a bunch of bumbling fools who couldn't walk and chew bubble gum for the last few weeks.

Dan Pearson

Hindsight is 20/20, so they say, so it's not surprising to see more than a few people nodding sagely and saying 'I told you so' this morning, and I'm afraid I'm going to be one of them. In truth, the writing has been on the wall since E3 - even a brand like Xbox couldn't whether a storm of public opinion that strong. However, the rapidity and the totality of the turnaround has been astonishing, especially given that most people would be more willing to associate Microsoft with hubris than chagrin.

So now we know what happens when the irresistible force of market evolution meets the immovable object of public opinion: the money wins. All that work, all that money, all that risk and it didn't pay off. I've said it before, but it's worth reiterating - this was a billion dollar prisoners' dilemma. Sony put Microsoft in the hole briefly, but there's been a reprieve and the signature at the bottom reads: customers.

1

There's one thing more powerful than giving people what they want, and that's making them think that they made you do it.

Forgive me for what might seem like a little revisionism here, but surely there must have been a button marked Plan B all along? This was a massively risky strategy. Almost every single time the customer has encountered new methods of securing DRM over the course of the last few years, it has resulted in opprobrium, uprising, petitions and outrage. Microsoft knew - for all of the garnish of sharing, of digital reselling, of the promise of a better ecosystem - that this was going to be an unpopular decision. As Rob wrote last week, this is not a company in the habit of employing idiots.

Now, I'm not suggesting a conspiracy, here. I don't for a second believe that Microsoft didn't want the plan it laid out first to succeed - you don't throw away a PR opportunity like E3 on a double bluff - but they were aware that it might backfire, that the draw of the concessions made to digital sharing might not be enough, even if they believe they will inevitably have to become the accepted norm at some point. There was always the option to climb down, especially if Sony weren't willing to venture out on the same limb. This is still a pretty negative outcome, of course, but there is a spin here, as so wonderfully exhibited in the official statement. I, for one, couldn't help but read it in a gravelly, reluctant and sarcastic tone, an apology through gritted teeth. Perhaps it's something to do with the uncanny valley of cultural dissonance between the US and UK, but I took those paragraphs as a masterclass in passive aggression.

Still, Microsoft does appear to have done an incredible thing, turning all-out vitriol into a people's victory. Pre-orders, previously disastrous, are picking up and less obvious gripes, like the snooping Kinect and a tense relationship with indies, are sneaking through under the fanfare. This might have been a brave foray into new territory, but the rapidity of the retreat shows indubitably that Microsoft's forces were never fully committed. The ideas will not go away, this was a very public piece of reconnaissance. Schroedinger's cat is back in the box - this time it was dead when the public pulled back the lid, but next time it might come out fighting.

Mike Williams

So, that happened. Microsoft stared deep into chasm between their digital hopes and the reality of consumers... and they blinked. The company went into E3 knowing that they had an uphill battle with their always-online DRM, but they stuck to their guns. Sony walked into E3 and dealt Microsoft a crushing blow, and now Microsoft looks like it's behind the game.

"Microsoft, here's a freebie: give a bunch of Xbox One consoles to active-duty military"

That said, I have to give Microsoft kudos for not leaping headfirst into a disastrous launch. The Xbox One is still $100 above Sony's PlayStation 4, but there's no way for Microsoft to fix that without offering a Kinect-free model. They showed off a bunch of great games at E3, but Sony's slate was equally good. Now Microsoft has to convince consumers that the new Kinect is the next entertainment centerpiece. Marketing will need to be on point to make that happen.

Microsoft, here's a freebie: give a bunch of Xbox One consoles to active-duty military. It will win you back some of the love you lost with your previous stance.

Rachel Weber

Personally speaking, the Xbox 180 (that's what we're calling it right?) has been a disaster for me. My boyfriend predicted it when things started to look sour for Microsoft, so I'm in for at least two weeks of told you sos.

What I'd really like is to be a Kinect on the table at the meetings that lead to the decision. Was it public pressure, the gigabytes of internet opinion, the "candid feedback," the jokes spewed out by American TV hosts that made this happen? It would be nice to think so, that Microsoft saw its gamers were unhappy and decided to listen. But then if that were the case they never would have tried to introduce such measures in the first place. What's more likely is that they saw they were giving Sony an easy win, not just with consumers but with retailers. Whatever fancy methods you come up with for selling on games, the move was going to damage the pre-owned market, at least from Mr Gamestop's perspective, and for now Microsoft still needs him on side.

2

We'll see these policies come back, but at a later date, in a few years when just the initials DRM don't make everyone nervier than a clicker at a disco. The truth is a lot of people are already OK with the way the digital world works, my younger family members are all about Spotify and Netflix, the idea of physically purchasing and hoarding a product is as quaint as asking them to bake their own bread. Steam has shown PC players are pretty much fine with it, and they've been rewarded with more innovation and cheaper games. I'm not saying aspects of the anger at the original policies weren't valid, but a lot of the people getting the rage over daily online check ins were also going all twinkly eyed over Titanfall, the online game.

For now, let's all celebrate gamers getting what they want, Microsoft making an unprecedented decision and me being ahead of the game in the Xbox One pre-order queue.

19 Comments

Michael Benfield
Senior Designer

15 12 0.8
The internet has won, the consumer has won, Sony has won.

Nope. The only winners here are the retailers. (see Gamestop's share price since the announcement)

Posted:9 months ago

#1
Popular Comment
For the Microsoft XBone executive team, this would seem their third strike - poorly thought out reveal event (focused too much on TV), poor E3 event (more negatives than positives), U-turn before release (miss-judging audience)!

One would expect the MS board considering a new executive team to lead the machine from this point? Strong single voice with good industry credentials?

Posted:9 months ago

#2

Gareth Jones
Managing Director

40 51 1.3
+1 @ Kevin

If this whole trainwreck isn't enough of a reason to fire the whole team, nothing is.

Posted:9 months ago

#3
Popular Comment
I have a deep suspicion the digital DRM will claw back one day at a flick of a switch through the installed base...

Posted:9 months ago

#4

Benjamin Crause
Supervisor Central Support

74 33 0.4
That is exactly what I think to Dr. - They tried once they will try again trough the backdoor.

Posted:9 months ago

#5

Clive Gorman
Marketing Consultant & Contractor

5 5 1.0
The strategy was a good one. The marketing communications were terrible. The only reason Execs backpedal is when revenue is proven to have taken a hit. Preorders for Xbox One took a beating. Microsoft would have ploughed ahead regardless if it were just sentiment alone. I'm mourning some of the cool innovation we would have seen namely cloud game sharing between friends and Steam on console.

Posted:9 months ago

#6

Joel Hruska
Analyst/Journalist

10 23 2.3
Popular Comment
The problem with this decision is that they threw family sharing out along with it.

This was utterly avoidable. The pitch should have been: "Offline, the Xbox One works just like the Xbox 360 with your physical discs. You can buy games, play games, and trade physical discs in at Gamestop, no problem. But if you're *online*, you can buy games digitally and share them with up to 10 friends, provided your console can authenticate once per day."

That, right there, would have been an enormous reason to buy the digital version. It's a feature not even Steam would have. And it would've made both sides happy by ensuring that if you *didn't* have great Internet service, or if you were in the military, your ability to buy game discs and play a game on your own console wouldn't be affected.

Instead they went with an all-in strategy that confused and angered customers after months of very public worrying that they'd restrict used sales in some way. It wasn't just a stupid idea, it was a *needlessly* stupid idea. People understand that you can't share a physical product the way you share a digital one -- how hard would it have been to set an internal flag identifying which installed games were installed by disc (and unshareable) and which were installed digitally and could be shared?

Posted:9 months ago

#7

Renaud Charpentier
Lead Designer

60 125 2.1
In the end its a good thing: you don't want any of the 2 challengers to completely screw up, they both need competition, Sony as much as M$. It's a bit the same with video cards: Nvidia vs AMD keeps it healthy, when you can see that failing AMD processors vs dominant Intel processors leads to Intel not lowering its prices and offering little power boost with its new gen of procs.
Now I mainly hope Nintendo pulls something out, a real 3 way battle would be even more interesting for everyone: players, devs, publishers...

Posted:9 months ago

#8
They never needed to do this at all. Digital will take care of exactly this. Yes, always on DRM will make a comeback. It's called digital download sales. Why MS thought it was a good idea to push this down on physical copies too is beyond me. In three years, if all goes to plan, more than half of game sales will be digital and none of this will matter. Or, perhaps this was their concern: if you can do what you want with physical and we have tight control on digital, then why would the consumer pick digital? Perhaps they were concerned about uptake and wanted to make them all uniform. Different channels are different.

Posted:9 months ago

#9

Christian Keichel
Journalist

416 562 1.4
@ Dr @ Benjamin

There is still the option of games to use the XBone cloud, which would make the game at least always on, depending on how it's done, there's always the possiblility to link the saves of a physical copy, that uses the cloud to a certain XBox account. As far as I read their press statement, they talked about offline games only.

Posted:9 months ago

#10

Leigh Pankhurst
Studying Animator

6 4 0.7
I am unable to ascertain Mattricks salary, but it seems certain that it is in the realms of 8 figures. He and his team have done a terrible amount of brand damage to the Xbox. How do they justify their colossal salaries in the light of this? I'd sack them.

I have been a huge fan of the 360, now I wouldn't touch their new console with a barge pole. It's insulting to be treated like this.

Posted:9 months ago

#11

Paul Johnson
Managing Director / Lead code monkey

787 931 1.2
oi, don't take our name in vein...

Posted:9 months ago

#12

Paul Jace
Merchandiser

768 1,001 1.3
That picture of Xzibit is priceless.

Posted:9 months ago

#13

Axel Cushing
Writer / Blogger

83 101 1.2
@Dan Pearson
Forgive me for what might seem like a little revisionism here, but surely there must have been a button marked Plan B all along? This was a massively risky strategy. Almost every single time the customer has encountered new methods of securing DRM over the course of the last few years, it has resulted in opprobrium, uprising, petitions and outrage. Microsoft knew - for all of the garnish of sharing, of digital reselling, of the promise of a better ecosystem - that this was going to be an unpopular decision. As Rob wrote last week, this is not a company in the habit of employing idiots.
Issac Asimov wrote an essay about intelligence, summing it up with an anecdote about a service visit he made to his mechanic for his car. The mechanic's last word, after making Asimov look incredibly stupid, was "Doc, you're so educated, I know you can't be all that smart!" And there have been numerous studies about how even numerous intelligent and educated people can behave with incredible stupidity once they get into a groupthink mode. They probably thought it was a highly intelligent strategy, one that was so self-evidently amazing that nobody could fail to embrace it, and they were wrong. The fact you hire an intelligent person is no guarantee they won't do something stupid later on down the road

I'm also not convinced this was a plan B. There was enough of a hue and cry over the initial release that they could have saved themselves incredible grief and embarrassment if they'd backpedaled within the first week after the announcement. Instead, they kept going, and did so with increasing incoherence right up to E3. They let the bad press and ill will fester for a month, then let Sony completely brutalize them. What sort of a plan B deliberately waits for public sentiment to reach that level of fear and loathing? What PR strategy is that suicidal? Microsoft created the console equivalent of the Edsel, tried to shove it down the public's throats and tell us it was for our own good, and then spent a month wondering why everybody seemed to hate their guts. If this was their plan B, it doesn't look markedly more effective than their plan A did.

I think somebody finally managed to engage that second brain cell rattling around their skull and realized (finally) that they'd screwed the pooch in an absolutely spectacular fashion. It's been less than a week since the end of E3, but more than a week since the press conference. Just enough time to gather up what everybody's been saying for the last month, distill it down to the core points, and say, "OK, we're cutting these features because we listened to you." With the unspoken "you miserable, brainless, unwashed peasants" hanging in the background, and the added features being cut as a sort of a backhanded punishment for the public's temerity to voice a dislike of the proposed product.

Posted:9 months ago

#14

Joel Hruska
Analyst/Journalist

10 23 2.3
I've got to agree with Axel, but with a modification.

I read through about 130 pages of internal Microsoft email during the lawsuits from "Vista Capable" a few years back (the emails were released as part of the trial). What they showed was that while MS presented a very unified face to the public, internal meetings were absolute dogfights and internal communication to partners was a whiplash. Several prominent MS employees were *extremely* vocal about the changes to Vista and the negative impact they would have on customers.

Point being: I expect there were absolutely dissenting voices, from Day 1. They just weren't listened to. And that may well mean that while MS had dissenters from the beginning, they never had a fully articulated Plan B because they didn't see the need for one.

I remain convinced that Microsoft could have avoided this entire catastrophe by demoing cloud- rendering and family share as two huge benefits of being online, while allowing offline, disc-based play if you didn't have an Internet connection. Just that single change would have blown the doors off the unveil.

Posted:9 months ago

#15

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
Microsoft, here's a freebie: give a bunch of Xbox One consoles to active-duty military. It will win you back some of the love you lost with your previous stance.
Funny you mention that Mike. I had an Innnnteresting conversation over the weekend with a veteran who noted that while they all love their gaming time when IN the military, off base, some of them in areas across the US that can't get broadband or any decent online other than fiber or lower speed connections. He was "hoping to hell a game company, phone company or someone" would figure out how to wire up these areas, as "it's kind of weird if you think about it - I have to go back to a war zone to play video games with my buddies!"

We both laughed at that, but yeah... I think we both new it wasn't exactly that amusing...

Posted:9 months ago

#16

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
@Paul: Oh, man... someone ring up MTV... coming soon: PIMP MY XBOX ONE.

First episode:

taking the off the shelf (or "crippled" as I heard it called today at a GameStop, of all places) version and adding back in everything MS took out yesterday (plus a flashy paint job, ten screens for "family" play and a freezer for beverages). Guest apperance by Flava Flav. Yeeee-ah, boyeeeeee!

I'd watch that in a heartbeat... but it'll probably be an Xbox One only program... ;^P

Posted:9 months ago

#17
Well the US military have made xbox controllers into the same controllers they use to control their drones, whilst it make make sense to the soldiers the only way the generals alien to such tech would have gone with it, would be because they're soldiers were playing these games on the controller anyhow, so they'd have to spend less cash on training and they would be better at it form the get go, as their more familiar with the controller, that might convince a general..

Posted:9 months ago

#18
"you miserable, brainless, unwashed peasants" hanging in the background, and the added features being cut as a sort of a backhanded punishment for the public's temerity to voice a dislike of the proposed product
Spot on! I wonder though, there should be no need to remove any of these awesome features because in reality it does not require persistent online connection for the cloud thingy to work

To play any online or multiplayer game infers having to go online anyway. If people dont log in regularly, they can always offset it to affect the online world, with the last data entry when online

Posted:9 months ago

#19

Login or register to post

Take part in the GamesIndustry community

Register now