Game Over for Microsoft? How Microsoft Can Lose the Video Game Wars by Losing its Audience

The gaming industry is abuzz once again with the latest entry in the never-ending video game console wars – Microsoft’s Xbox One. The sleek black box was first revealed to the public on May 21 in the tech giant’s own Redmond, Washington campus. The showcase was yet another step into a new generation for the industry coming at the heels of Sony’s unveiling of the PlayStation 4 last February 20.

Unfortunately for Microsoft, their grand reveal turned out to be more of a big disappointment for the audience that cares the most about their brand new product.

Throughout the live event, Microsoft made it abundantly clear that they were no longer simply coming out with a machine dedicated to gaming. What they were selling was instead an all-in-one home entertainment device that would “revolutionize” the way people consumed media, hence the name. This is supposed to be achieved through the console’s multitasking feature a la Windows 8, interconnectivity between the Xbox One and TV, and voice-activated controls through the bundled Kinect accessory.

All of this was on full display with slick demos showing how each feature works; from video chatting with people through Skype while switching between TV channels in full HD with voice commands. To further cement Microsoft’s intentions of branding the Xbox One as an all-in-one entertainment device, they struck a partnership with the NFL to better integrate their broadcasted games onto the console’s TV viewing feature and to have exclusive rights in creating interactive NFL content.

So where does this leave the hardcore gaming audience that care most about games? They only had a teaser of the latest installment in the hit military shooter franchise Call of Duty which didn’t promise anything groundbreaking.

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Beyond the scathing memes bandied about in social media and forums about how the presentation was a flop for hardcore gamers, there are also more pressing issues that only serve to turn off this important portion of Microsoft’s gaming division’s target market.

Connection Issues?

The Xbox One will require an online connection for owners to play games. This restriction is presumed to have been implemented to curb piracy, as having the console linked to Microsoft’s servers will allow them to constantly authenticate the game’s ownership and detect which copies have been obtained legally or not.

Although it might sound good on paper, it’s ignoring the fact that not every household in the US, let alone the world, has 24/7 access to a fast and stable Internet connection. A survey conducted by the International Data Corporation regarding the Xbox 360 (the Xbox One’s predecessor) shows that for the first quarter of 2012, 30% of the consoles weren’t connected to the Internet in any capacity.

And what is Microsoft’s answer after Venture Beat presented the study?

“The vast majority of our Xbox 360 owners have Internet in their homes, and we’ve built this platform to take advantage of the tremendous benefits of a connected device.”

Requiring an online connection to play games also creates the problem of not being able to play them in the future once Microsoft abandons the servers needed to verify the game’s authenticity for a new set in the next generation of consoles. Gamers will then have to potentially buy a brand new copy of the same game on the new console just to be able to play.

Another question that’s on every gamer’s mind is how often will the console need to be connected online. Microsoft VP Phil Harrison answered in an interview with Kotaku that players would need to connect their Xbox Ones to the Internet at least every 24 hours. This has been confirmed by the latest post on Microsoft’s official Xbox news site.

All Used Up

The second major concern for hardcore gamers is Microsoft’s planned policy for dealing with secondhand games. The existence of the used games market has been a hot topic for years, considering the profits video game retailers rake in from facilitating the practice of buying previously bought games from owners and selling them for less. Publishers, developers, and manufacturers see it as lost sales, as all the money in the transactions goes to the retailer

Microsoft also outlined their plans to address this issue. They are giving publishers the choice on whether to allow their games to be resold, letting them dictate whatever business fees they might want if they allow it. They will also leave the decision to the publishers on whether or not they will allow their games to be given away for free.

For those who want to trade in their games for cash or credit, they will have to find a Microsoft-approved retailer. According to earlier reports from an insider source in retail, they will erase the original owner’s license to play the game using Microsoft’s Azure cloud platform.

Microsoft will not receive any compensation for such a transaction.

For those who simply want to give their games, they can only be given to those who’ve been on the original owner’s friends list for at least 30 days, and they can only be given once.

Loaning or renting of games is not possible.

These are some severe limitations that will discourage the simple notion of sharing games, and will put an end to game rentals which has been a way for some gamers to see if a game is worth paying the full price. It also wouldn’t be far-fetched to find out that some publishers won’t allow some of their games to be resold or even be given away for free.

Microsoft’s Arrogance

Compounding the PR mess even further are Microsoft’s President of the Interactive Entertainment Business Don Mattrick and Microsoft Studios Corporate Vice-President Phil Spencer’s brazen statements.

Mattrick has said of hardcore gamers’ desire for backwards compatibility, which is having the Xbox One play games made for the Xbox 360, as “backward” thinking. Spencer believes hardcore gamers will continue to patronize them because “they will buy everything.”

Microsoft’s arrogance in their handling of the aftermath of the Xbox One’s public reveal is a formula for failure. With today’s 24 hour online news coverage, critical opinion pieces, and massively-populated forums and social networks where hardcore gamers congregate and share their thoughts, Microsoft has already been crucified.

Their plan to market the Xbox One as the ultimate home entertainment machine is also risky, as they will be entering an entirely new arena. Apple, Google and Samsung have already staked their own claims in that industry with their line of “smart TVs”, and they have considerably more respected brands in the realm of consumer electronics unlike Microsoft which is still struggling to achieve mainstream success with their hardware line-up.

An Uncertain Future

The only venue where they have a chance of getting back at the good graces of hardcore gamers is the upcoming Electronic Entertainment Expo or E3, arguably the biggest annual video game event exclusive to industry insiders. There they will present their games line-up alongside presentations of other gaming companies, and gamers will be watching through online streaming.

However, Sun Media tech journalist Steve Tilley has confirmed that Microsoft has already cancelled its post-press conference media roundtable for E3. Although this doesn’t strictly mean bad things, it could be seen as Microsoft being unwilling to face more scrutiny, or they still have yet to finalize their stands on the important issues. Whatever the case, it only seems to leave its biggest audience in the dark once more with little confidence that Microsoft cares about their interests.

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