Friday, 14 June 2013

There can be only One (or Two)

The Xbox One is the all new console that is scheduled to be released in the autumn of 2013 in Microsoft's battle with Sony over the issue of the best games console.

In recent years Xbox has been the cool brand with Xbox Live being the online gaming membership of choice. When Sony launched the PS3 with the 'experimental' Blu-ray disc format and cell processor it was late, overpriced and clunky. However steady sales and 'free' multiplayer gaming have attracted gamers not willing to join the Microsoft ecosystem. This progress was slightly hampered by a serious security breach in their password system last year.

So Microsoft did not have to do too much to produce a next generation console. Sony had all the work to do. Earlier in the year Sony 'launched' their PS4 console without actually showing what it looked like.

Microsoft's successor to the Xbox 360 is to be called the Xbox One. The launch focus was that this is a device to make TV a better experience, have exclusive content, voice control, Skype video calling and gaming. In the weeks that followed up until E3 additional information came out describing the new concepts and new features.

Unfortunately Microsoft suffered from some kind of marketing process that firmly placed their feet in their mouth. Instead of showing new features and facilities as customer benefits it all became an exercise in damage control. In particular not being able to allow gamers the option of trading in old games for cash. A 22 second video highlighting the different approach from Sony with the PS3 went viral and simultaneously slammed the Microsoft marketing machine.



This really registered with me. Microsoft's bold changes in mobile, Windows, and now Xbox have been followed by much explanation and frequent backtracking. The world has changed since the last version of Windows, Windows Mobile and Xbox - we get this. However marketing hasn't changed that much. To sell to a customer you must make the benefits of being a customer seem real. Removing value from the customer is going to get a negative reaction.

The first problem MS had was context.The launch presentation was all about TV. My impression is that most viewing on an Xbox 360 is by gamers doing something else with a game console not a household buying an Xbox for entertainment. Most people have other set top box options. Apple do a reasonable job with the Apple TV, there are also smart tvs that run apps and a cheap Blu-ray player will normally include Internet connection and Youtube. I was trying to work out why Microsoft would persuade a consumer that it was a good idea to pay 5 times the cost of an Apple TV for a device to watch TV and movies.

To be fair the voice control and the gesture controls are great but the value proposition is poor.

Games played a smaller role than watching TV at the launch. The problem for Microsoft is that games are the 'trojan horse' that gets this device in the living room so you have to persuade people to buy it based first on the games. In the future it may become a central point of all entertainment but not right now.

At this point Microsoft decided to reveal that every 24 hours the console had to call home in order to work. We are in an Internet connected world but there are still plenty of people who just play single user games or don't have an Internet connection. There are also plenty of places that have such a slow Internet connection that online gaming is next to impossible. It's not a deal breaker but a pointless limitation.

The problem with the limitation of an 'always on' connection is that it feeds into the issue of rights management and trading in your old games for cash. Many people do buy second hand because of the cost of games. The argument form the other side is  that publishers loose out in this trade and if everyone bought new the cost of games would go down. The implication is that digital sales would tie your id to a game effectively removing swapping games, lending games or re-selling them.

My problem with this is there is no evidence on the Xbox platform that digital only sales have driven down prices. Buying videos and music digitally is often more expensive than getting the disc in the mail from Amazon. Very often things are not available to all markets digitally even when you can buy physical goods in that market. Until pricing is much better there is still space for the games store over a pure digital download.

All this plays into the idea that Microsoft is this big corporate entity working with games publishers to extract more cash from customers in a duplicitous way rather than provide a better value experience. In a sense they have damaged the 'cool' part of the Xbox name by overlaying a negative corporate marketing strategy.

You also require an Xbox Live subscription to make this product work. If you just want to rent movies and watch Netflix why do you need to be a subscriber to the Microsoft games features? This just makes it even less attractive as a pure entertainment hub. If you are going to subscribe to something then just subscribe directly to content providers. Some of them will even provide a free box to view content.

Of course there is the community that will buy the Xbox One because it is the next new thing. As an owner of 2 Xbox 360s (different rooms) I am trying to work out what the benefits are of buying this product. So far Microsoft seem to be advising me that I will loose features I currently value if I spend  a chunk of money on an Xbox One. Sony seem to be selling the idea that they are people who will keep gaming traditions alive with the PS4.

 

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