Using Sony's Playbook, Microsoft Will Attempt Xbox One's Turnaround "IGN"

MentalIlness

Platinum Member
Nov 22, 2009
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http://www.ign.com/articles/2014/05...k-microsoft-will-attempt-xbox-ones-turnaround

Today, Microsoft unleashed a torrent of news about Xbox One, tacitly revealing that it's learned plenty of lessons over the past six months. Its new console is experiencing success in the market, with over five million consoles shipped so far. But perception is all too often reality, and Xbox

One has been playing second fiddle to PlayStation 4 since E3 2013. Sony has been all about games with PS4, but with Xbox One, many claim that Microsoft has done more to alienate gamers than engender their confidence.

Xbox One may be selling well, but PlayStation 4 is doing much better, and Microsoft knew full well that things had to change. It needed to stop acting on flawed instincts, and start listening. And according to a series of announcements early this morning, the company has been listening, and things will indeed change. The result is making Xbox One and its various services feel a whole lot like its competition's. Then again, Microsoft has been here before.

In the early 1980s, Microsoft dutifully made software to run on Apple computers and IBM-compatible PCs alike, until it realized that it could make an operating system that would steal Apple's thunder. As a result, Windows was born. Jobs and company confronted Gates and his crew over lifting what would later be known as the "look and feel" of Macintosh's OS, but Gates had a trump card: Apple was grabbing many of its "ideas" from Xerox's Palo Alto Research Center. Everyone was borrowing liberally from everyone else.

Microsoft and Apple persist as dominant players in the computing space; Xerox is a footnote in the history of the personal computer...

Xerox, a company mortified of competing with its own paper and copier businesses, had no idea what to do with the futuristic technology its employees were creating. It was rigid and refused to adapt. Apple knew what to do with that technology, even poaching many of Xerox's smartest employees to replicate that tech on Macintosh.

Likewise, Microsoft also saw the writing on the wall, as it notably mimicked what Apple was doing using its access to early Macintosh development kits. As Steve Jobs said years later, encompassing the entire episode using an amazing Pablo Picasso quote: "Good artists copy. Great artists steal."

By pillaging Xerox's ideas, Apple profited and thrived. Microsoft profited and thrived even more by modeling Windows after Macintosh's OS, which was in turn a copy of Xerox Alto's operating system. What's the point of all of this?

Microsoft and Apple persist as dominant players in the computing space; Xerox is a footnote in the history of the personal computer when it could have completely dominated it. All it took was clear vision and the acceptance that, sometimes, other people and other companies have better ideas than you do, and that it may just behoove you to replicate instead of innovate.



With today's Xbox One announcements, Microsoft has accepted this submissive -- yet pragmatic -- position, much like Sony accepted that PS4 should essentially be modeled after Xbox 360, not PS3.

Maybe all of this was spurred by the exit of controversial CEO Don Mattrick, or maybe it's the fresh leadership of new Xbox boss Phil Spencer that was the tipping point. Either way, Microsoft is ready to fight Sony anew, and it's taking to the field of battle with Sony's very own playbook in hand. It may seem obvious -- or even cheap -- but one thing's for sure: this strategy could ultimately be a winner for Microsoft's console.
“
For starters, Microsoft has finally accepted that the market doesn't want Kinect...

At least when it comes to raising the price point of the console to $500 -- and as a result, it's going to release Xbox One without it.

Kinect's inclusion with Xbox One raised the price of the console and represented obvious wishful thinking on Microsoft's part. Price point has been the single major differentiator between PS4 and Xbox One so far, and now, Sony's pricing advantage has disappeared. Both consoles will cost $399 beginning on June 9th, when the Kinect-less Xbox One is set for launch.

Microsoft borrowed from Sony's playbook by removing the camera as a bundled-in device, something Sony opted to do with PlayStation Camera long before the console even launched. Sony learned a major lesson with the PlayStation Move when it comes to forcing peripherals down people's throats, and it didn't want to repeat history with the PlayStation Camera, especially if it injured PS4's affordability.

Interestingly, such a move didn't only allow Sony to actively listen to consumers while getting PS4's price point down; it created incredible demand for PlayStation Camera, demand not even Sony itself anticipated. (According to Phil Spencer, Kinect will be released at a later date on its own, and like Sony's PlayStation Camera, it should retail below $100.)

In addition to going Kinect-less, Microsoft has also ended its befuddling paywall between its users and streaming services available on Xbox One (as well as Xbox 360). For years, an Xbox Live Gold account was necessary to watch Netflix, HBO Go, and just about anything else on Xbox Live. This was a puzzling stance for Microsoft to take, and it increasingly rattled consumers who understood that in addition to paying for a service like Netflix, they had to pay Microsoft for the honor of actually using it. It was, in short, complete nonsense.

It was obvious to anyone in the PlayStation ecosystem that Xbox Live Gold's paywall approach was that service's Achilles' heel...

Sony beat Microsoft to the punch years ago by giving anyone with a PlayStation 3 -- and now a PlayStation Vita and PlayStation 4 -- completely free access to streaming services. You'd still have to pay for Netflix, Crunchyroll, NHL GameCenter, and all of the rest, but you didn't have to pay Sony to download the program and use it on your television or handheld.

And finally -- taking another page from Sony's book -- Microsoft has learned that, too. And then there's this matter of Games with Gold, Microsoft's half-hearted attempt to compete with Sony's overwhelmingly popular PlayStation Plus program.

Games with Gold has had a slow start, and it's been relegated only to older Xbox 360 games, but all of that is about to change, too. Next month, Games with Gold migrates to Xbox One, and like PlayStation Plus, it will give players separate games for free across various platforms. Max: The Curse of Brotherhood and Halo: Spartan Assault will get things rolling on One in just a few weeks.

Folks have been comparing and contrasting PlayStation Plus to Games with Gold for some time. Sony actually ceded ground to Microsoft when, upon PlayStation 4's announcement, it essentially made Plus a gateway between players and online games after years of free multiplayer on PlayStation Network. Now, Microsoft will strive for complete parity between the services. It makes a whole lot of sense for Microsoft to rip another page out of Sony's playbook here, and they did just that.

Many of [Microsoft]'s instincts about Xbox One have been wrong...

Microsoft's aping of Sony's PlayStation 4 playbook isn't shameless. It's smart business, and it benefits both Microsoft's existing and would-be, could-be customers. It's a way to show consumers that the company isn't as tone deaf as it appeared in the months leading up to Xbox One's launch.

Removing Xbox One's DRM was an obvious step in the right direction, but it clearly wasn't enough to convince a majority of game-playing consumers that Xbox One was a better value or a better machine than PlayStation 4. Many of the company's instincts about Xbox One have been wrong, and -- third console curse aside -- the proof has very much been in the pudding.

Much like Microsoft wasn't afraid of liberally borrowing from Apple in the early 1980s in order to better their company and their users' experience, Microsoft of 2014 has realized that it's losing, and that perhaps the best way into the hearts and minds of consumers is to be a little bit more like its competition.

There's nothing wrong with a company that honestly and candidly acknowledges that it's being beat, and there's nothing wrong with looking at what its competition has done that's so obviously worked. It shows that people at Microsoft are paying attention, want things to change, and believe that the battle has just begun.

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EDIT: I searched Anand for a thread about this, and I have no clue how I missed the other thread.
 
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ShintaiDK

Lifer
Apr 22, 2012
20,378
145
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Sony posted another loss, 1.27B$. Both Sony and MS are thinking on getting rid of their console dvisions. Both only lost huge amount of money on them. And before anyone claims they make money on each console sold. BOM alone doesnt equal total cost.
 

Lil Frier

Platinum Member
Oct 3, 2013
2,720
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The big difference is that Microsoft is still a profitable company, and to a great-enough extent that they could potentially wait Sony out on this generation, hope Sony continues to lose big money on the PS4 (and overall), then try to see if Sony exits the game completely. If that happened, Microsoft could potentially become the only major player in the console game (given Nintendo's current status), and they could then look into a highly-profitable endeavor. Not sure they'll like that idea for the next 8-10 years, but it's possible.

Then there's the chance they make Windows Boxes or something, a PC with an Xbox marketplace to battle SteamOS and Steam Machines. Given they're already working on games for x86 consoles and they have both a PC OS and a digital marketplace on it, that's not the craziest of ideas. They could dump the hardware division and make gaming a PC-centric thing for them long-term.
 

ShintaiDK

Lifer
Apr 22, 2012
20,378
145
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The exception is tho, that the majority of the board at MS also wants to get rid of consoles. None of the companies believe in a future for consoles. Sony stockholders are also very vocal about getting rid of entertainment division(Playstation etc) fast. And multiple high profile MS people have publicly spoken about getting rid of Xbox.
 

Arkadrel

Diamond Member
Oct 19, 2010
3,681
2
0
Sony posted another loss, 1.27B$. Both Sony and MS are thinking on getting rid of their console dvisions. Both only lost huge amount of money on them. And before anyone claims they make money on each console sold. BOM alone doesnt equal total cost.


For Sony the PS4 is one of the only things thats really makeing them any money.

Why would sony want to get rid of a healthy bussiness?
Its all the other stuff sony does thats dragging the company down.

I dont think MS is loseing money on their Xbox either.


shouldn't it be cheaper than the PS4?

I honestly wouldnt buy one over a PS4, if they where both priced the same.
So yes I feel like it should to be a compelling buy.
 

Wingznut

Elite Member
Dec 28, 1999
16,968
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For Sony the PS4 is one of the only things thats really makeing them any money.
I dont think MS is loseing money on their Xbox either.
Why do you think these things... Any tangible evidence, or just a feeling?
 

ShintaiDK

Lifer
Apr 22, 2012
20,378
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mmntech

Lifer
Sep 20, 2007
17,504
12
0
Microsoft is making the right moves here. Kinect has always struck me as more a curious novelty than a revolutionary new way to play. Problem though is Sony still has the clear advantage, since hardware differences are a lot less ambiguous this time around.

Sony and Microsoft follow the same philosophy as printers. Sell the hardware at a loss but make up for it on software sales. So it really is a long run battle. Sony has been in trouble for a few years though, and Microsoft is starting to see it's most profitable divisions weaken.

Sony's real downfall was how slow they were to jump on MP3. Thanks to some very cleaver marketing and good timing, Apple achieved something very rare in business. They had an iconic product with the iPod. It quickly dethroned the Walkman as the synonym for personal music players.

Sony also still fancies themselves a premium brand, which is what really killed them early in the PS3's life. It's also what's been nuking their TV division. I think Xperia does okay but not as well as Sony would like. The problem is these products are too expensive, but lack the trendy status of Apple or Samsung.

Microsoft has made one bad decision after the other in the last couple of years. A lot of the blame does go on Steve Ballmer. A shrewd businessman who didn't know very much about tech or marketing. Bringing Bill Gates back and hiring Satya Nadella were both positive movies, since both have strong tech backgrounds.

First their mistakes was killing off the Courier before it saw the light of day. They had a tablet people were getting excited about when the iPad still had an uncertain future. Now nobody wants a Surface. Windows 8 never received a warm welcome either due to it's weird GUI. Then the original Xbox One broke pretty much every cardinal sin in gaming. It cost more, it was encumbered by intrusive DRM, and had had weaker hardware. They didn't address fan concerns when the rumours leaked. Then they allowed Sony to define their brand before they could. The Xbox One had the biggest botched launch I can remember going at least back to the Saturn.

So right now Microsoft is in a slow process of correcting those mistakes. Their business plan is very much a long run issue. Though I'm beginning to wonder if they will spin off the Xbox brand as an independent company.
 

Newell Steamer

Diamond Member
Jan 27, 2014
6,894
8
0
I am not interested in either system.

They do not have any games I would like to play - and, are not b/c. If they were b/c, I would honestly not mind buying them. But, for now,.. pass.

New gen just isn't that attractive.
 

Todd33

Diamond Member
Oct 16, 2003
7,842
2
81
Sony posted another loss, 1.27B$. Both Sony and MS are thinking on getting rid of their console dvisions. Both only lost huge amount of money on them. And before anyone claims they make money on each console sold. BOM alone doesnt equal total cost.

Bullshit. First off Sony numbers are in Yen, not dollars. Second Gaming is Sony's most profitable division. They only posted a small loss due to launching a new console which is very expensive. They will get back their money easy over the next few years, launch costs are only incurred once.

MS makes plenty of money elsewhere, so the gaming divisions looks bad to their investors.
 

007ELmO

Platinum Member
Dec 29, 2005
2,051
36
101
that's fine, Sony is a major copy cat themselves; that's pretty much all they do is copycat and rebrand, no innovation from them for decades. The failed E3 demo of the 6-axis controller at the same time the wiimote came out was hilarious.

Paying for the brand name.
 

AstroManLuca

Lifer
Jun 24, 2004
15,628
5
81
that's fine, Sony is a major copy cat themselves; that's pretty much all they do is copycat and rebrand, no innovation from them for decades. The failed E3 demo of the 6-axis controller at the same time the wiimote came out was hilarious.

Paying for the brand name.

Did I just step into a time machine and get transported back to 2006?
 

jrphoenix

Golden Member
Feb 29, 2004
1,295
2
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Bullshit. First off Sony numbers are in Yen, not dollars. Second Gaming is Sony's most profitable division. They only posted a small loss due to launching a new console which is very expensive. They will get back their money easy over the next few years, launch costs are only incurred once.

MS makes plenty of money elsewhere, so the gaming divisions looks bad to their investors.

read this (posted above).. not BS & it's dollars:

You might want to read this:
http://www.sony.net/SonyInfo/IR/fina.../13q4_sony.pdf

Sony gaming lost money... look under the divisions a few pages down.
 
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ShintaiDK

Lifer
Apr 22, 2012
20,378
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Bullshit. First off Sony numbers are in Yen, not dollars. Second Gaming is Sony's most profitable division. They only posted a small loss due to launching a new console which is very expensive. They will get back their money easy over the next few years, launch costs are only incurred once.

MS makes plenty of money elsewhere, so the gaming divisions looks bad to their investors.

You really need to check your facts. In the last 12 months where gaming have had its own financial statement, only 1 quarter didnt turn in a loss. Gaming is a huge fiasko for Sony. And its no better for MS. Hence why the vocal crowd in both companies to get rid of it.
 

007ELmO

Platinum Member
Dec 29, 2005
2,051
36
101
Did I just step into a time machine and get transported back to 2006?

Giving you a simple example of how Sony has been for 20 years.

You pay and still pay for brand name with Sony (TVs, audio electronics, etc). There was a time when Sony was actually better than the rest.

They are a marketing machine.

Give me an example of how I'm wrong, I can give you more examples of how I'm right. the 6-axis thing was a debacle, laughing stock and completely visible to their lack of company vision. Playstation wouldn't exist if Nintendo didn't allow them to exist. their controller designs continually copy others.

Although I own both consoles, I agree with the above poster, there is little for many gamers to want to own the console. You need to launch with an exclusive Mass Effect 4, to make an impact.
 
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Lil Frier

Platinum Member
Oct 3, 2013
2,720
21
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I honestly wouldnt buy one over a PS4, if they where both priced the same.
So yes I feel like it should to be a compelling buy.

Maybe so, but I'm guessing you are not the person by whom the companies price their products. I mean, on the other side of it, I would (and did) take The Bone over the PS4 at a $100 premium for an accessory I didn't really want, because Sony's console doesn't offer exclusives I want--at least, not in the quantity Microsoft offers them (there are 2-3 Sony exclusives I'd maybe try).
 

cmdrdredd

Lifer
Dec 12, 2001
27,052
357
126
Sony posted another loss, 1.27B$. Both Sony and MS are thinking on getting rid of their console dvisions. Both only lost huge amount of money on them. And before anyone claims they make money on each console sold. BOM alone doesnt equal total cost.

Sony isn't thinking of getting rid of the console division, only shareholders who see dollar signs and don't realize that everything else is dragging them down not necessarily gaming. The Playstation brand is almost the only thing making any money at all. If sony sold it's other parts of the company you can bet that Playstation would go independent and be just fine.

If you read down further the results for games division are explained. The operating loss of 78million dollars was because they launched a new console and probably includes all the marketing, manufacturing etc. Sales have increased though by 38.5%
 
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cmdrdredd

Lifer
Dec 12, 2001
27,052
357
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Its all the other stuff sony does thats dragging the company down.

I dont think MS is loseing money on their Xbox either.

Xbox has brought in zero profit over the course of a decade. This is documented here (lost 3billion dollars in 10 years). http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years

As for sony's other ventures they have made a lot of errors. Notably trying to be a premium brand when people are buying $200 TVs and being content. Too few people willing to shell out real cash even if it's better. Also their phone division, they have been WAY too slow to release their devices to the North American market. The Xperia Z2 is available internationally but not domestically in the US, it's arguably the best device currently out there but in order to get it you have to buy it unlocked without a warranty. By the time it comes to a carrier and people can get it affordably, it will be irrelevant and everyone who was looking at it would buy something else that is readily available. Then you have their PC division that is suffering the same fate as the TV division, and their failed e-reader.

Giving you a simple example of how Sony has been for 20 years.

You pay and still pay for brand name with Sony (TVs, audio electronics, etc). There was a time when Sony was actually better than the rest.

I can tell you how you're wrong. Find an LCD TV better than Sony's Top of the Line XBRs and W900A sets. You can't. They flat out make a better LCD TV than anyone, but they price it unjustifiably high. That destroys any hope of them selling in any significant numbers.
 
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Lil Frier

Platinum Member
Oct 3, 2013
2,720
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Wasn't there something like a billion dollars lost on having to cover their butts on the RRoD though? I mean, hard to call the division a failure for losing money when R&D/quality control was at fault there. There was a big chunk of cash lost because of that, whoever approved that setup. I wouldn't put that on the whole division.
 

ShintaiDK

Lifer
Apr 22, 2012
20,378
145
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Sony isn't thinking of getting rid of the console division, only shareholders who see dollar signs and don't realize that everything else is dragging them down not necessarily gaming. The Playstation brand is almost the only thing making any money at all. If sony sold it's other parts of the company you can bet that Playstation would go independent and be just fine.

If you read down further the results for games division are explained. The operating loss of 78million dollars was because they launched a new console and probably includes all the marketing, manufacturing etc. Sales have increased though by 38.5%

The game division made a loss in 3 of 4 last quarters. And the one they made a profit in was a tiny one. And before that we cant see the exact number, since it was in the entertainment division.

The fact is there is simply no money in consoles. And havent been the last 10 years or so (-3B$ for Xbox, -5B$ for PS). The game division would, like MS Xbox, quickly be bankrupt on its own.
 

Lil Frier

Platinum Member
Oct 3, 2013
2,720
21
81
That probably depends. If it went away from those companies, it might get rid of excess employees and complicated garbage and cost a lot less. Maybe it'd be semi-profitable. I wonder what the profit comparisons are for consoles, accessories, and in-house game development.
 

ShintaiDK

Lifer
Apr 22, 2012
20,378
145
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I think the problem is they are 2, while the volume can only support 1 in their segment. But again, even Nintendo got problems now. One thing is certain, 3 is one too many. And 2 might be 1 too much as well. And duping one another with a discount console with outdated hardware wasnt exactly the best method. Thats something only Nintendo can get away with.
 

Arkaign

Lifer
Oct 27, 2006
20,736
1,377
126
Sony isn't thinking of getting rid of the console division, only shareholders who see dollar signs and don't realize that everything else is dragging them down not necessarily gaming. The Playstation brand is almost the only thing making any money at all. If sony sold it's other parts of the company you can bet that Playstation would go independent and be just fine.

If you read down further the results for games division are explained. The operating loss of 78million dollars was because they launched a new console and probably includes all the marketing, manufacturing etc. Sales have increased though by 38.5%

Yep, people forget that the PS numbers are sole and bare, and have to account for masses of expenses undertaken to launch a new console (complete with GDDR5, R&D on VR, yadda). The Microsoft numbers for Devices and Entertainment are somewhat cooked, to put it kindly (I'll let people do their own research to see what I mean).

Given the BoM costs, Sony and Microsoft should both be comfortably profitable within a quarter or two on a YOY basis (not counting the mountains of losses for XB over the years of course, but rather as 'did they make more money than they spent THIS year?').
 

cmdrdredd

Lifer
Dec 12, 2001
27,052
357
126
Yep, people forget that the PS numbers are sole and bare, and have to account for masses of expenses undertaken to launch a new console (complete with GDDR5, R&D on VR, yadda). The Microsoft numbers for Devices and Entertainment are somewhat cooked, to put it kindly (I'll let people do their own research to see what I mean).

Given the BoM costs, Sony and Microsoft should both be comfortably profitable within a quarter or two on a YOY basis (not counting the mountains of losses for XB over the years of course, but rather as 'did they make more money than they spent THIS year?').

They should both definitely be profitable barring any RROD type issues.
 
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