On May 21st, 2013, there bewilderment in the air, which turned swiftly to criticism and backlash, as Microsoft grandly revealed its Xbox One in June of 2013.
The Xbox One was designed to be Microsoft’s all-in-one entertainment solution. It was going to usher in a new era of video games and become Microsoft’s entertainment box that would sit in every living room. It would harmonize and streamline entertainment experiences and be a future-proofed game console that would appeal to all walks of life, revolutionizing not just games but TV, movies and music.
None of that happened. Instead the Xbox One reveal completely fell flat to the degree where major websites were calling it a disaster and Microsoft ended up all but conceding an entire console generation to its primary rival Sony.
Ever since then the Xbox One has largely played second fiddle to the PlayStation 4 in a complete 180 from the prior generation, where the Xbox 360 largely dominated the marketplace between the two rivals.
Now columnist Ben Gilbert has written an article on the strange place the Xbox group is in and I find myself largely agreeing. Mostly because a lot of the current problems of the Xbox One are of its own making.
Prior to its messy reveal and even messier E3 the Xbox One had been dogged by rumors and speculation of unpopular, consumer unfriendly features including forced Internet connectivity, the blocking of used games and mandatory use of the Kinect. Some pundits handwaved this as gamers being entitled brats, but the fact is that these were important issues that meant a lot to people. Microsoft maintained radio silence leading up to the reveal.
Microsoft made two very, very big mistakes with this head in the sand reaction to rumors. The first mistake was not addressing rumors in any capacity. Statements Microsoft gave in advance of the reveal were ambiguous and didn’t answer any questions. Business-related rumors are like fires; when you don’t kill them immediately they spread and people start imagining worst scenarios, which run rampant and spread like wildfire when you have an audience as passionate as Microsoft did.
It was all well and good for Microsoft to say we didn’t have the facts, but then they…didn’t tell us the facts. It’s a basic tenement of PR that when you don’t control information you allow misinformation to run wild. This is what led the Xbox One to be defined by those rumors so that when the reveal came the focus was not on the new Call of Duty or TV integration or the new controller, but these unanswered issues that mean a lot to people.
The second big mistake Microsoft made was taking its dedicated audience for granted. Microsoft’s bizarre reveal of a video game console seemed committed to attracting avid watchers of TV, enthusiastic sports fans, and casual players. This came at the expense of the Xbox’s video gaming roots due to a relatively threadbare and unimpressive showing of games that year at both the reveal and at E3.
Microsoft had to learn the hard way that different customer segments aren’t collectible Bobblehead dolls. You can’t just stick them in your pocket, rest assured that they’ll stay there and move on to other juicy targets. Consumers will move on if they don’t feel catered to, especially when – in Microsoft’s case – they didn’t really offer much initially. Especially when this is an audience you’ve cultivated over the previous decade with your previous product – the Xbox 360 – which had a broad breadth of diverse, third party titles that helped the console shine.
Microsoft’s Yusuf Mehdi also made a critical mistake in analyzing the role collective consumer reaction played in the Xbox One and how news spreads in your industry generally.
While the Internet is decidedly up in arms about the way the Xbox One handles game ownership and online check-ins, Mehdi said it was “hard to say” what the larger reaction from the less attentive mainstream consumers would be. “I think it’s fair to say there’s a segment of consumers at this show in particular who really pay attention, who are very passionate about all aspects of gaming, and that we listen to closely. In a broader set of community, people don’t pay attention to a lot of the details. We’ve seen it in the research, we’ve seen it in a lot of the data points.”
On paper, Mehdi is right. I’m one of those hardcore gamers that actively reads Kotaku, Polygon, Destructoid, Eurogamer, you name it and I likely read it. Most people don’t even know what those outlets are or at most read them occasionally when they’re linked to specific articles on Twitter.
Where Mehdi tripped up is remembering that casual consumers of a product are almost always informed of a product by its hardcore enthusiasts. In this case, by the disaffected, disappointed and angry people who came out of that reveal with an axe to grind.
I can only speak anecdotally about the result of this but the conversations I had about the Xbox One still stick with me. Back in 2014 I was working part time for a tech company and one of my colleagues was a woman who played video games occasionally at most, and almost exclusively on her smartphones. She was getting a PlayStation 4 for her young son and I asked her why a PlayStation 4 specifically. Her response spoke volumes: “I heard the Xbox One sucks.”
We didn’t have time to go into further details but the implications should be crystal clear: The knockoff effect of bad rumors, bad press, and angry fans. The broader consumer community may not read Eurogamer, Yusuf, but news trickles down to them from enthusiasts like me even in its most basic form. Especially if that news is extremely negative, and people takes cues from that even if they don’t know all of the details.
More recently, just last year, another parent with very little experience in video games asked me about a holiday console for his own sons. He was worried because he believed the Xbox One still restricted used games. A friend of mine who works at GameStop has similarly been asked several times about the Xbox One’s used game DRM policy.
The fact that five years later the Xbox One used games controversy is still so intertwined with the console should be considered a branding and marketing disaster on par with the people who thought the Wii U was a Wii peripheral. It’s easy to handwave this and suggest people do research, but this is a problem of Microsoft’s own making by allowing the console to become defined by its messy reveal, by not addressing rumors, and by pursuing these wildly unpopular policies in the first place.
The bigger issue that persisted with the Xbox One was the lack of diversity the Xbox 360 once had. As Gilbert notes, the Xbox One has the fewest compelling exclusive games for its platform and this is another issue that stems back to the console’s origins. Instead, Microsoft doggedly chased different market segments that seemed completely uninterested in the Xbox One.
While Sony was heavily investing in a number of exclusive in-house games and making deals to produce games like Bloodborne Microsoft was determined to carve out a position as a television superpower.
That didn’t happen either. After months of allegedly bad management, TV production center Xbox Entertainment Studios was shut down after producing a documentary and a Halo show that hasn’t yet materialized after years.
Meanwhile, another point of contention with the Xbox One was its decision to enforce usage of the Kinect. A number of developers went all in on Kinect-powered games to chase the same casual audience that Nintendo had so enraptured with the original Wii. At least until the underperforming and poorly received mandatory Kinect was unbundled, which removed incentive for developing for it in the first place, before it was quietly discontinued.
This lack of focus and lack of emphasis on games is why the Xbox One is the first console in a long time that I simply have no interest in. I lost interest in Halo after Bungie left. I’m not into Forza. Sunset Overdrive is…okay, I guess. I already have the Rare Replay games in some capacity. Otherwise there’s really nothing I want.
Microsoft laid the foundation for this awkward situation it finds itself in long ago. It forgot what made the Xbox 360 such a widely loved and played console, and it took its audience for granted; the same audience that turned against it the moment Sony decided to take advantage of Microsoft’s vulnerable position and not follow the lead on restricting used game sales. It’s obviously been doing well, and that’s great – but Microsoft shouldn’t have had to spend an entire console generation playing catch up after hamstringing itself.
So don’t take your customers for granted, and don’t assume that they’ll just let you pull a fast one. The moment you start deciding to burn bridges like this they will turn on you, and you may find yourself the victim of a brilliant own by your competitor.