Livin' the dream!
Keep Calm and Chive on
Join Date: Aug 2005
Location: Southern California
"In over a decade of watching E3 events, I’ve honestly never seen one company completely and utterly destroy a competitor like what happened last night between Sony and Microsoft. It may sound like hyperbole, but what took place over the course of the day will send shockwaves through this entire next console generation. Sony is now simply in a position to dominate Microsoft when both the Playstation 4 and the Xbox One launch side by side this year. They weren’t content to merely watch Microsoft stumble, rather this was a targeted effort to directly humiliate their competition in a way that’s seldom been seen in this market before.
Things actually started out pretty well for Microsoft. They had a solid press event themselves, at least for 99% of it where they showed game after game after game in order to reassure their base that yes, this was indeed the system for the hardcore gamer. No talk of TV tuning or fantasy sports, and the Kinect wasn’t even mentioned, all items that core fans celebrated, and the games looked great too.
But it was in that last 1% where things took a turn. Microsoft announced the price of the Xbox One: $499. It was a shock for the wrong reasons. Many had expected the system to be no more than $399 at launch, or possibly even lower. The idea was that as an “entertainment box,” everyone should want one in their homes, regardless of whether they’re a die-hard gamer or not. A low price would encourage that. But a high one? It would surely have the opposite effect.
With that price, Microsoft immediately became solely reliant on hardcore gamers to make the Xbox One a success at launch, as they’re the only ones who would pay that much money for a game console. Unfortunately for Microsoft, that’s exactly the group they’ve been aggravating to no end over the past few weeks as they announced restrictive and confusing policies about reselling used games, lending them to friends, and having to have the console check in over the internet once a day. All of these were issues that weren’t even touched on during their press conference, and Microsoft hoped drowning their fans in new games would make them forget all about those concerns.
Ahead of the event, I remarked that Sony had an unprecedented opportunity to take advantage of Microsoft’s plight. By simply sticking to the status quo, allowing players to play offline and trade-in used games without restriction, they could not only retain their own fans, but steal legions from Microsoft in the process. I had my doubts they would do this however, as whatever system they had in place was likely to be fixed at that point ahead of E3. They may have adopted some variant of the Xbox One’s policies, and the two systems would simply be on equal footing in those areas, and consumers would suffer the consequences.
But that’s not what happened.
Normally, a standing ovation during an E3 press conference comes after the announcement of a specifically beloved title, or a demo of some truly amazing gameplay. But during Sony’s event last night, that reaction came after Sony said that the PlayStation 4 would fully support used games, allow for easy lending and would have absolutely zero online requirements to play single player games. The crowd, quite literally, went wild.
At that point, the tide was shifting in Sony’s favor. Fans and journalists alike mulled over what they’d just heard as Bungie showed footage from Destiny. But when the lights came back on, Sony’s knockout punch came with them. The system would be $399.
The ability to support used games and offline play would have been enough to give a distinct advantage to Sony, even if the prices were matched, but to have a full $100 difference between the two systems at launch? Sony didn’t just capitalize on Microsoft’s mistakes over the past few weeks. They picked up the ball Microsoft dropped, tossed it in the air, then smacked it out of the park. Then they turned and laughed in their faces, as seen in the video below, which already has 1.5M hits in the last twelve hours alone:
This is a combination of Microsoft creating a horrible mess for themselves, and Sony being smart enough to capitalize on the situation to the point where they outright embarrassed their rivals in front of millions. I’ve never seen anything like it at E3. Sony’s VP of Worldwide Studios spoke to Polygon about the feeling that accompanied these announcements, and the thought process leading up to them:
“It’s something that we believe in. We know gamers come first; we know what they want. I was personally overwhelmed with the massive explosion on Twitter, with everyone essentially begging, ‘Please don’t do this Sony, please don’t do this PlayStation!’ It was so hard not to say, right away, ‘Well, we never were going to do that, but now let’s have a little fun and announce it in a fun way at the PlayStation press conference.’
“I mean, that was such an amazing message,” Rohde said. “We kind of had a feeling; we kind of knew we were gonna land a little bit cheaper than those green guys. When it was verified this morning, we’ve just been walking around with smiles all day.”
Microsoft, as of now, is a bit harder to get a hold of, and is likely carefully crafting some sort of PR spin for all this (see their latest non-response at the end of Daniel’s post here). They have to get a handle on things, but it’s not just the press they have to contend with. Fans across every form of social media, even many self-proclaimed Xbox loyalists, are unanimously declaring Sony not only the winner of E3, but of the entire next console generation. Obviously, that’s going a bit far, but the messaging problem is more real now than ever. “RIP Xbox One, 2013-2013″ said one Reddit user, the sentiment posted on top of a picture of the console. This is a scary position for Microsoft to be in.
There are so many ways that Microsoft shot themselves in the foot here, it’s hard to even keep track of them all. First and foremost, the used game issue simply didn’t need to exist. Microsoft took far too long to convey the message that it was up to publishers to activate or deactivate used game sales, and by the time they did, people were already permanently upset with them. I completely empathize with their desire to push for digital distribution, but they got too far ahead of themselves. They could have set up an easy, convenient digital download network for new games that people could use if they so chose. But they also should have kept physical discs around for those who wanted them, and not used them as mere licenses to install content to a hard drive.
The same goes for the online check-in requirement. Microsoft was far too slow to clarify their position there, and though a once-a-day check-in is not “always on,” it’s not convenient either for those lacking internet, like soldiers deployed overseas. Is console piracy really so rampant that this system was necessary? I don’t believe so, and this was a fight that never should have been picked in the first place. Though again, this system also ties back to an ability to restrict used games.
And then there’s the price, driven up to an uncomfortable level by the burden of the Kinect. Across both the Xbox One reveal and Microsoft’s E3 press conference, we’ve seen the new version of Kinect do only a few things, namely control menus and TV inputs with gestures and voice commands. The Kinect wasn’t even mentioned when it came to nearly all of the games shown during yesterday’s conference. Microsoft is torn between wanting everyone to have a Kinect, but also realizing many of their fans hate hearing about it, which is why it was almost completely absent from the presentation yesterday. They can’t have it both ways, and its stuck them with a system that’s expensive because of a peripheral most of their fanbase didn’t want before, and certainly don’t want now as it’s been reclassified as some sort of Orwellian, always listening surveillance device. Even if it isn’t, again, it’s yet another Microsoft PR problem that spun out of control. It will be interesting to watch their stock prices this morning, and at the time of writing just after opening, MSFT is down 1.3% while SNE is up the same amount.
It would have been enough to let Microsoft dig its own grave, but Sony knocked them out with a shovel and started piling dirt on top of them for good measure. Metaphors aside, the Xbox One faces a very real challenge in trying to come up with selling points as to why it’s a more worthwhile purchase than the PS4.
There are its handful of exclusive titles that Sony doesn’t have like Titanfall, Halo, Gears of War, Dead Rising, and so on, but Sony has just as many worthy exclusives, if not more, on its side. Then there’s the Kinect, and the Xbox One’s TV tuning abilities, but in the end neither adds anything that you can’t do with a cable box and the “input” button on your remote control, items which people already own and don’t cost $500. I’m really stretching my brain here to carefully weigh both sides of the issue, but I simply cannot come up with a logical reason why someone on a limited budget would purchase an Xbox One over a PlayStation 4 this fall given the price and consumer friendly policies of the latter, and the complete disregard for common sense of the former.
All of this isn’t to say that Sony is guaranteed to “win” the next console generation outright. It will certainly have an advantage at launch, but after this fiasco Microsoft may do everything in their power to change the narrative, perhaps even walking back some of these controversial policies at some point, or shooting for an early price cut. And in the long run, I still believe deep down the Kinect has an incredible amount of untapped potential.
Or really, no one could win. Video game consoles face increased entertainment competition now more than ever before with mobile devices and the ever-present shadow of increasingly affordable and popular PC gaming. That said, I don’t subscribe to the idea that consoles are dead or dying. I just think there might be less of them in the future. Microsoft needs to hope the Xbox isn’t one of the first casualties.
There are many lessons to be learned here, the first and foremost being “listen to your customers.” Sony did, Microsoft didn’t, and the result was nothing short of a gut-wrenching fatality, and a flawless victory for the wiser party.
Aside from his opinion on the Kinect, this author nails it in his op-ed.