Monday, August 12, 2013

Microsoft vs Xbox: Technology War

There's another video game console fight coming, and Microsoft's latest -- the Xbox One -- has a hard act to follow as it joins the fray. Its predecessor, the Xbox 360, took on the competition and eventually dominated the gaming segment. It has been outselling both the Nintendo and Sony consoles for some time now. I'm guessing Microsoft felt it had an unfair advantage, because it apparently has been doing its level best to scare gamers away from the Xbox One ever since it was announced.

This isn't Sony or Nintendo torpedoing the product. Nintendo can't seem to find a market, and Sony is focused on trying to avoid being split up at the moment (it really needs to split up).

Nope -- the Xbox problems are all coming from Microsoft, and I'm trying to figure out why it seems to want to kill what otherwise looks like an excellent product. When this sort of thing has happened in the past, I've suggested Steve Jobs was likely paying someone inside the company to sabotage the effort, but I'm pretty sure Steve isn't doing that this time -- though if anyone could, he'd be the guy who would do it.

I'll dig deeper into this Xbox mystery this week and close with my product of the week: a wonderful car stereo from Alpine.

Xbox One: So Much Done Right

The first Xbox wasn't that attractive. You couldn't call it butt ugly, but it clearly was a game machine, and it looked more at home in a kid's room than in the living room. The Xbox 360 was a vast improvement, glossy black and special editions, but still more gaming than general purpose entertainment. That said, in places like England, it actually had more use as a set-top box than as a game player.

The Xbox One takes this a big step further and actually looks like a piece of next generation stereo gear. It looks like it belongs in the living room. I think it would have been wise to have included receiver features to make it more complete, but it now looks more like what it is: a general purpose entertainment system.

Kinect has some sharp improvements as well. Sony and Nintendo focused on ever more-capable, strange controllers that could go ballistic if you didn't hold on to them tightly enough -- possibly taking out your TV set or the person you're playing against -- but Microsoft went control-free, and the experience is more natural as a result.

Kinect will not only capture gestures better now, but also measure body functions so you can engage in stronger exercise-related games with less risk of becoming a heart attack victim.

This is a system that will encourage you to move around and exercise, which gives you another justification to buy it -- and it actually could improve your health over time.

Finally this version of the product effectively takes over your media viewing experience. Some may be able to turn off their cable TV service and live off it, while others will integrate the two to create something better and more compelling than they currently have.

Yes there is a nominal US$5 a month charge, but it's lower than what you likely pay TiVo or Netflix, and a fraction of what you probably pay your cable company. For that $5 a month, you actually get a decent value.

So why is it getting such horrible press?

The Once-a-Day Connection

People went absolutely nuts when they found out the Xbox One had to connect once a day. Now if I told you that to live in your house you had to take a breath at least once a day, you'd likely not care -- largely because you know if you didn't breathe, you'd be dead anyway.

Current-generation game machines, either console or handheld -- with the possible exception of the Wii -- are designed to be connected. If they aren't connected, much of what they can do in terms of social networking, streaming content, team game play, and Web browsing doesn't work. Disconnected, current-generation systems -- again with the possible exception of the Wii -- are crippled.

Given that next-generation game systems are even more tied to connected services, the fact that the system might have to check in at least once a day should have been in line with breathing. Having it disconnected would be the exception -- so only in the case of an extended power outage, when the thing wouldn't work anyway, or in the case of the network going down for an extended period would this have been a problem.

However, this requirement was presented badly, and it came off like some Big Brother thing that no one in their right mind would want. Folks freaked out. In one instance, a now ex-Microsoft exec said something the effect of "Get over it," which was like pouring gas on the fire. At no point did Microsoft actually point out that one of the advantages of this daily check-in was that you could buy a game once and have it appear on all of your devices.

With the current generation of Microsoft PCs, phones and I'll bet Xbox game systems, you basically buy an app once, and if you have any number of systems, the app is available on all of them. I've seen this work on my PCs and my Windows Phone, and it is wonderful but the devices have to connect regularly for this to work. Email, calendaring, streaming, and much of what I do won't work if the devices don't connect -- so I don't mind that connecting regularly is required. But if this is a requirement of my game system, well OMG that's awful. Wtf?!?

It Was as if Microsoft wanted people upset.

The $60 Dustup

If you are going to introduce a fee, you need to couch it in a way that people don't find objectionable. First, you generally talk about fees as monthly fees, because even $5 a month sounds like a lot if it's annualized. Think of your monthly cellphone fee, which is likely close to $100. That's $1,200 dollars a year -- more than some pay for their cars. Do you see the cellphone providers describing their fees as annual rates? Not on your life -- and if you realize you often need to sign up for three years, that last phone you bought actually cost closer to $4K than the $200 you thought you paid.

You also position a fee against other things, so it doesn't appear excessive. In my case, I pay around $40 for TiVo a month, around $15 for Netflix, around $100 for Comcast, and another $20 or so for music services. So against that, $5 a month extra for some convenience and the possibility that I could dial back one of those other services is trivial. Hell even the social networking aggregation tool I have wants to charge me $9 a month (though I am balking at that).

If you already have a Microsoft Gold account, you are likely already paying $5 a month -- so for you, the extra services that come with this new package are free. You basically get five new services for the same price you were OK with before.

Instead of positioning this as a monthly fee and against a backdrop of other things you are buying, Microsoft presented it as an annual fee of $60 -- and for stuff you probably already get. The message has been crafted to ensure you think you are getting screwed. This is like Bizarro Steve Jobs is running Xbox marketing. He's not -- he's running Apple.

Wrapping Up: It's All About Perception

If Steve Jobs had positioned the first iPhone around what you actually paid for it (close to $3K over its life) and highlighted the massive controls he had on the device -- no political content, no competing apps including navigation, and no ability to change carriers -- buyers wouldn't have bought it. In fact, they'd have likely gone out of their way to drive by Apple stores just to flip the guy off rather than lining up for the iPhone.

This is because Jobs focused folks on the parts of the phone they'd like, and those parts were good enough that buyers didn't care that much about the rest.

With the Xbox One, Microsoft has arguably created one of its best consumer products ever. However, for some screwy reason, its marketing geniuses seems to be working their butts off to ensure it fails. I can't for the life of me figure out why.

Maybe Microsoft found a way to create a Bizarro version of Steve Jobs; if so, he is running Xbox marketing. That would explain a lot.

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Author: Mohammad Waqas
Mohammad is the founder of WINFOPTC. He loves to spend time with his blogs and loves to help the people over the internet. Read More →

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