Why Microsoft thinks the Xbox One makes sense

Last week’s Xbox One reveal was met with a lot of confusion by many, and resulted in heated arguments over the course of the week. Gamers were concerned with the apparent focus on cable TV and sports, and many were upset by the inherent digital rights management (DRM) and privacy implications of the console’s many reported features.

Microsoft seemed genuinely bewildered.

There were many conflicting PR responses, sometimes made by the same person within the same day. Microsoft’s general attitude towards some of the concerns seemed to be “Why would you even be bothered by that?”, as if they hadn’t even thought it would be an issue. Clearly many people agreed that there were issues, but why wasn’t Microsoft able to foresee this? Or even better, did they care?

Before answering that question, we need to take a look into the recent history of Microsoft. What major Microsoft products have been released in the past two years? Windows 8 and the Surface. As an avid follower of Microsoft’s all office and business products, I’ve tried out most pre-release versions of Windows 8 and switched to it not too far from release, and I pre-ordered the Surface Pro, and use it every day. But both of those products are deeply flawed. The mentality that led to their creation and their faults can be traced back even further.

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The Zune was Microsoft’s “me too” to the growing popularity of the iPod. I’ve had several Zunes, and while they were pretty good music players, they were definitely a step back from Apple’s products in every sense but audio quality. The software used to sync a Zune to your computer was awful and unintuitive, and it didn’t share any UI design patterns with any other Microsoft products. It was as if they contracted an unrelated company to build a competitor for the iPod so they can also get a share of the growing MP3 player craze. But it wasn’t a competitive product. It seemed to fulfill the same role, but other than that, it was solving problems nobody had and didn’t have the vision and drive that made Apple’s iPod so successful.

Fast forward a few years, Microsoft introduced their competitor to Google’s search engine, Bing. On many internet circles, Bing is the punchline to jokes, basically a laughing stock. It seemed to compete with Google, but it didn’t have the creativity that made Google’s search algorithm work so well. In fact, Google proved that Bing steals search results from them. Microsoft later published a website called “Bing it On”, inviting users to compare search results from both engines and choose which is best, claiming “[people] picked Bing web search results over Google nearly 2 to 1 in blind comparison tests”, whereas the general consensus seems otherwise; and Bing’s experimental results are not available.

However, if you’ve watched TV shows on CW or USA recently, you might have noticed that characters in shows very visibly use Bing all the time, and the phrase “Bing it!” has been used in place of “Google it!”, as if anyone in real life actually uses that. Similarly, Internet Explorer has been on the receiving end of many a joke, and while it has gotten better over the years with features that other browsers have had for a while finally being integrated; it’s still nowhere near as convenient to use. Is the picture starting to appear? It’s a common Microsoft trend to dump tons of money into advertising their product to make it seem competitive.

The Surface is also an awkward product. It’s too heavy and short on battery life to be a tablet, and too small and unstable to use as a laptop. It’s solving a problem that nobody has while trying to compete with Apple’s iPad. Similarly with Windows 8, it’s a tablet-focused OS that alienates desktop users while being unwieldy to use on a tablet due to being based on a desktop OS. Microsoft’s output in the recent years has been a constant stream of “You want this, don’t you?” products that have constantly been met with bewilderment from their loyal consumers. Finally coming to the topic of the Xbox One, this phenomenon seems to be repeating.

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Microsoft have come out and said that “the custom of gamers is already taken as granted. [The reveal] will be pushing the One to other types of buyers, those not already considered dominated.” But considering the Xbox 360 was outsold by the Wii and is currently tied with the PS3, are they really “dominating” gamers? Perhaps, or perhaps not. But it’s clear that this is yet again an instance of Microsoft telling the consumer what they need, despite what the consumer thinks they need.

Is that really the case, though? It’s all hidden in the crucial word that most people seem to have missed from the press conference: “partners.” The Xbox One is supported by many partners, like CBS, ESPN, EA. Did you notice that during the reveal, most footage shown was from CBS properties? And the Kinect being always-on comes into play here. The current trend in academia and industry is focused on “big data,” i.e. handling and interpreting very large amounts of data, usually with the purpose of targeting advertisements.

Considering Microsoft are partnering with many content publishers, it would make sense that they are going to use all that Kinect data along with people’s purchases to deliver more appropriate advertisements. They have registered several patents focused on delivering advertisements with the Kinect. Basically, the Xbox One will be an excellent vehicle for Microsoft to make money from their partners, and that was what most of the reveal conference was about.

A large problem is that they have alienated a significant portion of their fanbase with this reveal. They are looking to break big into the cable TV and sports markets, but they have no brand loyalty there, and they are competing with Apple and Google as before. Yet again we see Microsoft’s misguided and disingenuine policy of trying to appeal to a popular market dominated by others by not really appealing to that market. The problem is that since they are entering a new area, they need to earn the trust of those consumers (presumably by dumping exorbitant amounts of money into advertising). Not only that, by trying to “me too” a new market that their core audience cares about, they will also be in the position to win back their own audience too. They are relying on their ad delivery and partnerships to not fail.

Is that to say the Xbox One will not be a good gaming console? Not necessarily. Despite Sony and Nintendo having arguably more (and diversified) exclusive titles, Microsoft are yet again trying to solve this problem by throwing money at it. They’ve contracted Crytek, Black Tusk Studios, and Respawn Entertainment to come up with AAA titles to rival other exclusive franchises. It remains to be seen whether these games will succeed in that endeavor, but Microsoft have themselves said that being a top end gaming machine is no longer their sole concern. Following the path laid by Windows 8 and the Surface, they are “reinventing” their core products. Most likely, the Xbox One will do fine in terms of gaming because most “big” games are cross-platform.

However, Google’s Google TV has not become a huge success, similarly with Apple TV. If the console launches at $400 to $600, the cable TV audience might find it too expensive as a glorified Roku. So essentially, Microsoft are trying to market the Xbox One to an audience that doesn’t really want it, while alienating the audience that does actually want it. Right now, given their partnerships and brand loyalty from consumers, they are too big to fail. But Sony came into the previous generation as the clear winner with the PS2, and the PS3 took a long time to find its momentum because of Sony’s poor choices and hubris. Regardless, Sony have managed to find secure footing and loyalty with the likes of PlayStation Plus, bringing old loyalists back into the fold and welcoming new buyers with open arms with things like the Instant Game Collection.

How do you feel about Microsoft’s aim with the Xbox One? Leave your thoughts in the comments below!