Wednesday, June 12, 2013

Opinion: Xbox One and Horrible Marketing

I'll be blunt - I am an Xbox 360 fan boy. I truly believe that Microsoft's current gen offering is vastly superior to the PlayStation 3. I scoff when anyone says otherwise. What it lacks in technical specs, it more than makes up for with a diverse offering of games, fantastic online service via Xbox Live, and a stable infrastructure. In short - it gives you the most bang for your buck.

Sadly, I cannot earnestly say I have confidence that the Xbox One will continue that legacy. In fact, I'd say my personal perception of Microsoft's next-gen console is close to venomous. What caused this shift? It's not like Sony, or even Nintendo, did anything to provoke this change of heart. No, the negative perception is entirely due to the high levels of douchebaggery that Microsoft has injected into their business practices related to the Xbox One. As a result of controversial product decisions and extremely poor public relations appearances by company leadership, Microsoft has no one but to blame for themselves if they don't retain me as a customer.

Where did they go wrong? Coming off the heels of Xbox 360, which launched in 2005, Microsoft was in a prime position to pull off a fantastic next-gen sweep. As rumors and product information started to leak, it should have been apparent to them that the Xbox One ship has some holes in it. The boat started taking on water as rumors of their new digital rights management (DRM) policies leaked, raising concerns about used game sales and game lending. The rumors around the console's "Always Online" requirement landed like another cannonball hitting the ship's hull. This would have been a great time for some crisis management - downplay the severity and make any adjustments to retain the consumer's trust - a sort of triage for the Xbox  brand.

You're a tool, Adam Orth. Deal with it.
This never happened. Instead, former Microsoft Studios creative director Adam Orth made several insensitive statements on Twitter. His tirade ended up damaging perceptions of the Xbox One, not to mention costing him his job.

By this point, Microsoft's shiny new toy had a black eye before ever even being officially revealed.
Even the slightest degree of consumer research or social listening would have shown the negative brand equity they had accrued. The consumer backlash from the DRM and Always Online rumors should have been a dead giveaway that something needed to change before they went live. Moreover, the lack of timely Microsoft response and public display of jerkiness by Orth only added to the problem, making Microsoft come across as being insensitive, if not hostile, to their fans. Regardless of whether DRM and connectivity were a big deal, it's basic to want to smooth out the ruffles and make good with the customers.Sadly, aside from having Adam Orth "leave" the company, Microsoft took no steps to mend the customer relationships he damaged.

Next came the official Xbox One reveal. Microsoft very carefully detailed how the console is designed to function as an all-in-one media hub. However, gamers (the audience that elevated Xbox 360 to its current level as a gaming superpower) were left skeptical of one of the consoles most important aspects: the games. Extra bells and whistles are great and dandy, but most of the people who can afford an Xbox One already have internet-capable Blu Ray players, DVRs, or Cable boxes. If I really wanted all of the online multimedia features, I can buy Apple TV for $100. If I buy a next-gen console, it's purpose will be video games first and foremost since there are already significantly cheaper multimedia options available.

Fast forward to E3 2013 - Microsoft's big chance to set things right. They had the stage to themselves where they could chronicle the plethora of AAA games coming to the new system, not to mention announce an change of direction for DRM and Always Online policies. Whatever they did - they really needed to show that they still cared about their consumers. Since the console reveal fell flat on the gaming front, Microsoft came out swinging as they displayed several games (some Xbox One exclusives, some not) and unveiled the price point of $499.99 in the USA. They played it safe, and the end result wasn't bad. However, they made a colossal mistake by leaving the DRM and Always Online issues still in a hazy state and altogether unresolved. This was their biggest mistake yet.

Sony took full advantage of Microsoft's
unresolved slate of problems
Sony has very clearly been watching Microsoft's mistakes. They saw how big of an issue the DRM and Always Online policies became. They also saw the emphasis on multimedia rather than gaming. When Microsoft failed to plug the holes on these issues, Sony was ready to take advantage of the fumble. They delivered two strong - and very blunt - points of differentiation. First off, the PlayStation 4 will not have the Always Online requirement. Second, the PlayStation 4 is not going to have a strict used-game policy. This means game lending and used game sales will be unchanged from how consumers currently know them. They even went one step further and mocked Xbox One's complicated sharing process with a simple PS4 Sharing demo - which featured simply passing the disc to another person. With these lines clearly drawn in the sand, Sony dropped the biggest bombshell of all - the pricing. They announced the the PlayStation 4 will be priced at $399.99 in the USA. That's right, they undercut Microsoft by 20%. Well played, Sony.

Suddenly, Microsoft found itself pushed against the wall by Sony. Not only were they undercut by $100 just like the SEGA Saturn in the 90's, but Sony effectively positioned themselves as an alternative solution for Microsoft fans who were on the fence regarding the DRM and Always Online requirements.

The last time Sony undercut a competitor by $100,
SEGA ended up leaving the console war.
As if Sony's calculated jugular strike weren't bad enough, Microsoft had another issue with leadership making comments that further alienated their fan base. Don Mattrick, President of Interactive Entertainment at Microsoft, explained Microsoft's solution for gamers not able (or willing) to be Always Online by saying, "We have a product for people who aren't able to get some form of connectivity and it's called Xbox 360."

Wow. Just... wow. Microsoft's other snafus aside, Mattrick's statement is a not only insensitive, but also disrespectful in the face of his company's loyal consumers. Let's unpack it - if you're not willing and able to meet the Xbox One's connectivity requirements, then your only alternative option is a console that is now 8 years old. This means that there are aspects of the console, including functions and games, that you're pretty much S.O.L. This is a slightly more polite version of Adam Orth's "Deal With It" mentality, which makes me personally feel even greater affinity toward the PlayStation 4.
The technical specs are very similar, so the brands will need to rely on
brand personality to differentiate their offerings

With the Xbox 360, Microsoft has been very effective at delivering a customer-minded service. That said, the team behind Xbox One seems to be completely ignoring all of the complaints potential consumers are voicing - there's been no acknowledgement. Given that the technical specs between the Xbox One and the
PlayStation 4 are pretty similar, it's going to be extremely important for the brands to establish things that increase the their respective value propositions. In short - what is it that makes it worth it to buy brand A instead of brand B? Based on Microsoft's latest behavior, it's definitely not customer service. In my opinion, Sony has effectively trumped them on that front at E3.

I'm taking a wait-and-see approach to the next generation of consoles. I most likely won't but either at launch. Sony and Microsoft need to earn my money by showing me that their respective consoles are truly worth it in regards to what I am interested in - Gaming.

This is how Microsoft has branded the
 Xbox One in the eyes of many gamers
A lot can still change between now and launch - and I personally hope Microsoft sees their errors and repents to the light side of the force. But they've got a long battle ahead of them in order to re-position themselves as gamers' best friend given the tumultuous course they've had thus far.

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