Jul 1, 2013
The Xbox One has not yet been released, but its short life has already been traumatic. Decried by every news outlet, downvoted in every Reddit thread, voted against in Amazon polls, you have to look hard to find an amigo of this embryonic console. To put it mildly, Microsoft could have handled it better. Each of its gaffes following another so closely that it makes one wonder what the collective noun of gaffe is (my suggestion is a Mattrick “behold that Mattrick of gaffes in full flight”).
The two major stumbling blocks for the public were the restriction of being unable to play a game without connecting to the internet once every 24 hours. There were several objections to this seemingly intrusive requirement, chief of which is what options there would be for people without a stable internet connection. This problem was addressed by President of Interactive Entertainment at Microsoft, Don Mattrick who, with all the grace and understanding of Mr Bumble the workhouse master in Oliver Twist, stated that those affected can just stick with the Xbox 360. The second was the restrictions imposed on the sharing or re-selling of games. This has long been a stumbling block of the creative industries, with every generation of attempts to reduce piracy being met with greater and greater anger. The public were rather mad in the past about small amounts of code which prevented programs being copied off disks; they reacted less favourably to a confusing rights system which could have drastically reshaped the videogame resale market.
None of these missteps appear to have frightened investors however, with stories about certain developments causing Microsoft’s share price to rise or fall seeming to be more rooted in hyperbole than fact. Microsoft has seen only small fluctuations over the last 6 months, with their share price currently riding high at around 33.03, whereas the typical value was around 28. The stock has not gone above 35.67 nor below 32.66 since the 6th of May – the point at which speculation began to mount around Microsoft’s imminent console announcement. If the market is to be believed then, these minor PR disasters are less important than just releasing the console in the first place. Similarly, the Sony stock rose in advance of its PS4 announcement and has hovered ±2 of 20 since that announcement. Obviously these two companies are gigantic multinationals and the console business is not their only investment, so small news stories are unlikely to significantly affect the price, but still, if the famously twitchy and reactionary stock market is remaining stoic in the face of a storm of scary stories, then perhaps the video game media has been making Choco Mountains out of Monty Mole hills.
In what some have called “customer engagement” yet others an ’embarrassing climb-down’, Microsoft has relented on both reselling and also the once-a-day internet requirements. They now have less than 5 months to prove to the public that not only is its console worth buying, but that it should be bought instead of its rival which handled its launch with aplomb. The Wii U, although not trying to be a direct competitor of either PS4 or Xbox One, is also worth looking at for how a launch shouldn’t be handled. The console shipped with many of the features not available out of the box and updates were necessary to access some of these features while others were not available for months. Then in January, the president Satoru Iwata apologised for the lack of games for the system. It is certainly possible that should Microsoft ensure that their console has full functionality on launch as well as a compelling list of titles, this furore will be long forgotten.
When GamesRadar referred to a console as “a hate object reviled by the entire internet” you’d be forgiven for thinking they were referring to the Xbox One, but actually that quote is back from 2007, directed at the PS3. Casting one’s mind back to 2006, it is easy to forget that people said that the PS3 release was a disaster; they introduced the console with the boomerang controller, which it dropped due to bad reception. The replacement controller did not vibrate due to an on-going court battle. There were several delays in the launch date due to lack of materials for the Blu Ray drive and the promised number of consoles available at launch didn’t meet what was promised. The online service, PlayStation Network, was criticised for lacking features which were available on Xbox Live. The console had limited backwards compatibility and when they had an opportunity to reintroduce it with the slim model, they declined to do so. Then there was the price tag of $600 Sony executive Ken Kutaragi infamously referred to as “too cheap” (Don Matrick’s mentor perhaps?). In order to fight complaints about the price tag, Sony created a cheaper 20GB version of its system which lacked wifi and memory card readers. So after these many disasters, it’s understandable why the PS3 sold far fewer consoles with its puny 77million units sold compared to Microsoft’s gargantuan 77.2million units sold. Or to put it another way PS3 has sold 99.74% of the amount that Microsoft has sold.
The life of a scandal is short and the life of a console is relatively long, there is always plenty of time for the person in the lead to falter and lose ground. Although PS3 had a slower start, it eventually overtook the Xbox 360, and this year sold 1.3 million units more than its rival. Although it has spent 7 years in second place, by the end of the lives of this generation of consoles, the PS3 will likely have outsold the Xbox 360 by a few million. So overall, public outrage may not be the best predictor of sales performance, but Microsoft should heed the lessons of the past, listen and change accordingly. As the former chairman of IBM Louis V. Gerstner said, “Everything starts with the customer”.