Xbox One can still win the next console war

Chris Morris notes that "the embankment Microsoft faces is a lot smaller than it was a short time ago"

Coming out of E3, the momentum for the next generation was clearly on Sony's side. Microsoft, through a series of unpopular decisions and confusing, conflicting public statements, was quickly wearing down the goodwill it had built up with the Xbox 360 - at least among core gamers.

Within a week of the industry trade show's close, though, Microsoft started making changes - big ones - to win back the doubters, reversing its DRM and used game policies. Last week, those changes continued as the company changed its mind on indie game self-publishing. And with an estimated four months or so before the Xbox One hits shelves, who knows if Microsoft is finished?

There's still plenty of criticism from forum dwellers. But while it's easy to knock Microsoft for its early missteps, what a lot of people seem to be missing is that the company appears to be learning from its mistakes - and quickly. And that could help it stay on top in the years to come.

Learning from mistakes seems to be a common theme in the eighth generation of consoles. Sony has curried a lot of favor among gamers and developers for its decision to change the closed gate philosophy it has held for years, favoring partnerships, openness and accessibility instead with the PS4.

But because Microsoft's learning curve came later than Sony's, the company is being accused of simply playing catch-up to its competitor. That may be true, but since we're still very much in the pre-game for the next generation, it's not something that will have a lasting effect on the company.

"Leaders and followers don't mean much in the pre-launch days. What matters is post-launch execution"

Sony was forced to play catch-up this generation in the field of video streaming - after Xbox secured a deal with Netflix. But that hasn't stopped the console from becoming the top platform for Netflix streaming to television sets.

Put another way, leaders and followers don't mean much in the pre-launch days. What matters is post-launch execution.

There's also the possibility that Microsoft had at least some of these new policies planned long before they were announced. It's something that sounds ludicrous on the surface, I grant you, but I think back to something Yusuf Mehdi, Microsoft's chief marketing & strategy officer for the Xbox, told me at E3.

"As we get a chance to tell more of our story, more of the details will come out and things will start to self regulate," he said at the time. "We're going to be incredibly attentive to the ecosystem in the marketplace."

There will be a temptation for gamers - and the games media - to rush to call an early winner in the next generation, likely soon after the 2013 holiday season has ended. But a better barometer of how new systems are doing is a year or so post-launch, when supply constraints are less of a factor.

As Nintendo can testify, game sales are a critical factor in building an installed base in that period - and from what Sony and Microsoft have shown of their hands, Microsoft seems to be in a very strong position. The company has renewed its agreement with Activision for early access to Call of Duty DLC. Titanfall is coming next spring. And a new Halo installment is due in 2014 (almost certainly in November, if the company sticks to its usual mapping).

Sony's roadmap doesn't have those major milestones in place yet - and that could steer people to the Xbox One.

"We're just putting our shoes on to get to the start line of a long distance race"

Peter Moore

Don't discount the run the Xbox 360 has had at retail, either. Money wonks like myself are fond of the phrase "past performance is not indicative of future results". And it's certainly an accurate saying. At the same time, momentum is momentum. And Microsoft continues to have it. By identifying (and clearing) trouble spots before the Xbox One's launch, the company improves its chances of keeping that drive rolling.

Of course, there's still a $100 price difference between the two models - and that could be one of the toughest hurdles to clear for Microsoft. Third-party publishers were just as much caught by surprise at the price as consumers were - and weren't overjoyed by it.

And, of course, it was by offering a lower-priced product this generation that Microsoft was able to quickly get out in front of Sony. Now it finds itself in a reversed role.

But Microsoft has one thing working in its favor that Sony didn't seven years ago: Deep pocketed partners, including Comcast and AT&T. With the Xbox One's positioning as an all-inclusive entertainment device, many analysts expect the system to be subsidized by one or more of those partners - likely within the first year.

Peter Moore, chief operating officer at EA says: "We're just putting our shoes on to get to the start line of a long distance race."

The Xbox One is Microsoft's most important hardware launch of the past 10 years - and will likely be the most important of the next 10 as well. So performing well in that race is critical.

While the company may have made some mistakes in the pre-game, it has taken steps to correct those. The playing field may not be completely leveled, but the embankment Microsoft faces is a lot smaller than it was a short time ago.

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Latest comments (13)

Let the popcorn games begin, coming this Gamescom!
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Jack Pochop Studying Telecommunications, Indiana University8 years ago
And don't forget about Time Warner. I think the Xbox team's original plan was to let a slow trickle of information flow in the days leading up to, during, and after E3. They wanted to build momentum slowly, releasing key details about their system one week at a time. Sony, on the other hand, is quick to disclose most everything about the new console -- which forum dwellers, bloggers, and consumers certainly enjoy more.

When the PlayStation team came out of the gate strong, letting it all hang out, the Xbox team seemed flustered. Not to mention the public's distaste for their initial game plan. Seeing all of our positive reactions towards Sony, their full disclosure attitude, and their policies, I think Xbox's due course was totally shaken up. Radical reversal and a new game plan in a matter of weeks. But yeah, it's important to keep our eyes on the prize: launch, post-launch, and of course, the games.

Of all the entertainment industries, I think we are the quickest to hop on news, latch onto it, and form opinions about the companies who make our games. That being said, Microsoft definitely still has time to make up for these last two months. They aren't out of this thing by a long shot.
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Adam Campbell Product Manager, Azoomee8 years ago
I agree.

Xbox One could be victorious. Partly, because the war hasn't even begun yet, so early negative press means less then one would suggest and partly because I think Microsoft and the Xbox brand have the power and the backing to do so.

I'm personally after the PS4 at some point, given a reasonable price and good line-up but I don't think that it has taken the market simply by a good E3 showing and somewhat gifted momentum.
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Kevin Patterson musician 8 years ago
Of course MS can still win the next gen, it's not even started yet :)

The problem though is that MS earned all this goodwill from gamers like myself, who bought their systems and supported them, only to be told that MS was doing what it wanted to to, no matter how their consumers felt. While they may have backtracked on all the major issues besides required Kinect, it left a bad taste that many of us still have. We know they didn't do this because they were generous, they did this because Sony forced their hand.

I am a long time Xbox supporter but I am buying a PS4 at launch, with the intention of possibly getting a Xbox One later down the road. I have no idea what console will end up being my favorite. I do feel that Sony did a fantastic thing not doing what MS did, and I feel I need to reward that. Sony in my opinion, made the Xbox One better for consumers.

One year ago, I never thought I would not buy a Xbox at launch, but I am now taking a wait and see with MS. I love their franchises and love the brand, but MS showed me that they still have that attitude that they know best and expects the world to follow. I truly hope that this taught them some needed lessons.

I want the Xbox One to succeed as competition is great for the consumers and drives innovation. MS needs to get back to where they once were, really going after gamers and developers, and listening to their concerns and opinions. This is what made Xbox great to begin with, and somehow they seemed to lose sight of that in their quest for console domination.
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Rick Lopez Illustrator, Graphic Designer 8 years ago
I dont know at least with me SONY was the clear winner by knockout, and the only think Xbox can do now is emulate their strategies, as they have been doing regarding there online, DRM and indie gaming policies. I just know in my family we ordered 3 PS4's on day one. I never buy a console in the first 2 years of its cycle since Im still getting through games from the previouse console cycle and I usually like to wait to see how new consoles perform and I like them to build a software line up. But i had such a good feeling with the PS4 that I went ahead and pre-ordered 3 of them. Of course my family situation warrents it. I only paid for mine, but my girfriend bought one for her son and her other son who is married got another one. But im not the only one who felt this good about SONY's offering. In general, the people i speak to feel the same.

So at least with me, I dont know how much this article mirrors reality or where there sources are regarding a console that isnt even out yet, but honestly its to early to make predictions. So this comes off to me as more as a marketing thing.
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Pete Thompson Editor 8 years ago
There may be an 80 difference in price, because Microsoft have been upfront about the Kinect, whereas Sony not so much, I keep reading that a lot of PS4 games will require a PS Move camera to track the light on the back of the PS controller, I'm sure we'll soon find out more info on this soon..

I have pre-ordered two XO's simply because you cannot beat Xbox Live for online play with mates, I've also pre-ordered a PS4, but I'm expecting the PS4 to see little use, much as my PS3 has done since 2007, simply because I really hate the tedious and long winded update procedure that the PS uses, which when you've just got your hands on a long awaited game forces you to download an update, then install it, and then reboot the console before allowing you to play the damn game, all because title updates are tied in with firmware updates.. Sony have always followed Xbox, ie:- Achievements--> Trophies, Xbox Live Gold -> PS Plus for example and I expect it will continue with the upcoming gen..

I did like the DRM policy that was announced with the Xbox One, Like many I could see it being very useful, I don't buy second hand games as I always pre-order, and I don't trade games in either, and lets not forget the idea of having a STEAM like system on the Xbox Dashboard was something to look forward to.. I buy books on my kindle, I buy tunes digitally, yet I'm still tied to buying just released games via retail, when Digital could be cheaper for all..
XO's DRM policy was certainly not a death knell to the games rental business, and that Lovefilm stopping games rental off their own backs may have done that already, in the UK at least, although there are other games rental companies in the UK, they are all dearer than what Lovefilm charged..

Edited 3 times. Last edit by Pete Thompson on 30th July 2013 6:54pm

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Klaus Preisinger Freelance Writing 8 years ago
In my opinion, the biggest question mark is still the difference in computing power. We have seen how bad the framerate dropped in that Dead Rising 3 demo and are eager to find out whether this was a fluke or not. This is the first order of business during any console showdown: a dirty frame vs. frame article trying to find out "which is best".
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Paul Jace Merchandiser 8 years ago
Xbox One can still win the next console war
In the US? Sure. The UK and Europe? Maybe. Japan? Only on April 1st.

I honestly don't know how things will turn out considering that Microsoft's first console wasn't exactly a sales success but that all changed with the 360. I have a feeling that it's going to be more like this gen, where there was an actual console leader the entire time(Wii) but the other two systems were also still successful. Every system sold atleast 75 million units so it's hard to say any of them is a straight up loser.

I think Sony and Microsoft are going to do well and Nintendo will pick up steam once their big games finally get released. And although I think all three have the potential to be successful again, I don't see each puling off 75+ million systems again. It would be nice but it seems like less people want consoles than the gen before. And no Bruce, that has nothing to do with tablets or mobile games. Some poeple just prefer to enjoy the consoles they already have.
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Frankly, I'm not too bothered who does better than the other. I'm hoping sincerely that the next gen consoles thrive like ravin rabies and that the line up for ALL consoles concerned are solid, enjoyable, platform agnostic and have something for each category/genre of player - thus welcoming all types of players to its bosom supplemented with mobile/casual playstyles on various other gaming devices.

In short, gaming for all
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Robin Clarke Producer, AppyNation Ltd8 years ago
It's going to take more than disabling over-reaching DRM (for the time being) for Microsoft to win back consumer trust. They're not coming across as a company that is listening to their customers, but one that's trying to get one over on them unless the PR flak gets too severe. There's still no convincing focus on games, the price and spec are still uncompetitive, and they're still pushing the unwanted Kinect.

As has already been pointed out on this site, getting embroiled in a massive PR disaster and then grudgingly rolling back on some of it isn't a 'plan' that anyone would intentionally follow. I doubt Mattrick will be the last person to go.

And there are still an awful lot of unanswered questions for developers considering self-publishing.

Microsoft will no doubt slash prices and stuff the channel (as they always do) this Christmas to give the machine a good start, but after the core of uninformed consumers have bought theirs, I think the path could get very steep very quickly.
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Paul Shirley Programmers 8 years ago
I believe this whole fiasco was caused by corporate Microsoft asserting control and making XBone little more than a supporting player in the wider Microsoft+Win8+app store ecosystem. Strong DRM lockin, constant 'engagement' with Microsoft (the online only requirement), the chance to cut out middle men and own the customers. A box that just happens to play games as well.

They applied the same no compromise, take it or leave it thinking we've seen with Win8. Only the combination of a strong competitor able devalue the plan and surprisingly uniform and loud reaction from every other stakeholder derailed that. Without Sony I'm confident they'd have simply ignored all gamer and most industry complaints, without the complaints they'd have gambled Sony could not keep the industry on board. But together they had no choice.

What we're seeing now is a company that had a grand plan that can no longer be applied to the gaming division and they're struggling to reconcile backtracking with the desperate need to support Microsoft's real targets. With tablet an abject failure, phone an also ran, Win8 struggling, a tumbleweed strewn app store, XBone is becoming more important just as they're having to make concessions on it. No wonder everyone's confused.

The good that should come from this is more control being handed back to the people with a clue about gaming. Maybe enough to stop corporate MS trying to backdoor the same customer repelling plans after launch while adding the good bits.
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Dominic Jakube Student 8 years ago
Cons-more exspensive
-less powerfull
-DOA in Japan
-bad PR from DRM fiasco
-memories of RROD from early adopters

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Curt Sampson Sofware Developer 8 years ago
Pete, I've seen you go on several times that you "keep reading that a lot of PS4 games will require a PS Move camera to track the light on the back of the PS controller." It would astonish me if Sony made any significant percentage of their games require this (as opposed to it being optional), since they both have a history of avoiding this (with PS Eye/Move support being required in very few PS3 games) and it would be a terrible decision commercially. Where have you read this, and what makes you think that it's plausible and not just random Internet speculation?

You also write, yet I'm still tied to buying just released games via retail, when Digital could be cheaper for all... This only because you've chosen to go the Xbox route; Sony is selling most if not all of their new PS3 titles in online Steam-like versions that you can download to any console (though you'll have to remember to deactivate the console for your account when you're done, since the game, sensibly, works for all accounts on that console, not just yours).
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