Constant Revision: The Amazing Adventures of the Xbone.

As I'm sure you all know by now, Kinect 2.0 will no longer need to be plugged in for the Xbone to function or play non-Kinect games. While this is a good thing, this is not going to turn Microsoft's fortunes this holiday.

Now, before I get into the meat of this post, let me make something abundantly clear; in the long run, the myriad reversals Microsoft have made with regards to the Xbone are good for their standing in the gaming industry for the next eight to ten years. With the coming generation likely to outlast the current one, Microsoft doesn't want to be hobbled by unpopular decisions and restrictive design. As indecisive as they look about the system's direction right now, these changes were mandatory if they wanted to stay relevant in the home console space.

That said, now Microsoft has some issues that need to be addressed in the short-to-medium term.

Right up until their humiliation at E3, Microsoft were quite loud and confident in their belief that theirs was the only future, and that we would be thanking them for their bold vision and initiative when the dust settled. The DRM restrictions would lead to better games through the magic of the cloud, and constant Kinect connection would mean that developers would really make the peripheral soar.

Then Sony came by and offered an alternative, one that gamers eagerly ate up.

In the two months since E3 (and in the face of presumably lopsided pre-orders) Microsoft has backed off on nearly all of its controversial policies, leaving only the forced bundling and $100 premium remaining. However, in doing this, they're going to have a shit ton of work ahead of them, and a very short time frame to get it done. We all know that new Xbones will need to undergo a "one-time setup," online, and anyone with a brain can infer that this is a day-one patch to replace the pre-E3 firmware with the current, less controversial firmware. This likely entails re-writing reams of code that took a hell of a lot more than four months to write in the first place, and with this latest reversal, making a version of the front-end that is more intuitive for people who've thrown their Kinect in the closet. Delaying the console is almost certainly out of the question, as they don't want to miss Black Friday.

You know what that means? Microsoft is, once again, rushing a product to market. We all know how wonderful that turned out last time, but unlike the RROD, firmware isn't quite as simple to fix as wrapping a towel around the system. There's almost certain to be busted code somewhere that's going to make the system unstable in those first three or so months. Unlike with this generation, there's no year-long head start for Microsoft. PS4's going to be here this holiday as well, and will likely not have as many issues. Consumer distrust over just how crappy the launch 360s were will lead to every single hardware/software/firmware issue being magnified in the press. MS might want to consider shipping with a 3-year warranty in the box in lieu of the camera.

However, these are going to be mainly issues for the first two quarters or so of the system's life. Fires that burn brightly and run out of oxygen rapidly in the constant winds of the blog-driven news cycle, much like the Wii U's initial update woes (that took two-plus hours, if you all remember).

No, now they have to deal with the tent-poles of their next-gen strategy simply not being there, or not being reliable. The cloud, already hampered by the fact that 3rd parties won't use it for their multiplat titles for anything but token stat-collecting, can't even be relied upon for first-party since systems can now be used without an online connection. The tinfoil hatters worried about encroaching DRM can stop worrying - we're not going to see online-only become a thing this generation, at least not for single player titles. Seriously, I can't even imagine the scale of the controversy if Halo 5 ran like shit unless you were online 24/7. Thus, no matter how much Microsoft PR wants you to believe otherwise, games aren't going to look better on Xbone than on PS4. In fact, the opposite may end up being true more often than not, with the two systems using x86 architecture.

This is easy enough to survive, however. Less powerful systems can have amazing gameplay experiences too, as the Xbox 360 itself has proven time and again. No, it's our next issue - the Kinect - that will almost certainly be the biggest bugbear for Microsoft over the next year.

Firstly, whether it's true or not (and how can it not be true?), most see the Kinect as the reason the Xbone costs $100 more than the PS4. While MS is at least relenting on its demand that we move our coffee tables out of the way to play regular Xbone games, the fact that it's not even needed to run the system only intensifies the question of value. Activision's Eric Hirshberg is already on record stating what we already know - MS has to make the value proposition more apparent than it's doing right now. While removing the requirement to have it plugged in is sure to please privacy activists and people who are already good to go with Xbone, Microsoft continues to do nothing to explain why they're asking for $100 premium versus technologically superior competition.

Not only that, but with all the reversals happening left and right, people have more hope than ever for a version to come out that doesn't have the Kinect at all. While it most likely won't happen this holiday, or even for the first two quarters, Microsoft has proven they're not so pigheaded as to ignore a chorus of people spending their console money elsewhere (unlike another console maker, but that's another post for another day). Thus, "I'll wait for a Kinectless release" is no longer an unrealistic troll post, but a legitimate response. I'd honestly be surprised if we didn't see a Kinectless version of the system by holiday 2014. Why? Because, with a viable alternative from Sony, holding out has never seemed so easy.

I need to state this again - the changes Microsoft are making to the console are good in the long term. Come 2015, only fanboys and trolls are going to be flooding forums with posts about the DRM and Kinect scandals of 2013 (especially if MS relents on packing the Kinect in with every Xbone), whereas their policies would have kneecapped their Xbox business for the whole generation had they stuck to their guns. However, Microsoft will have to prove agile and attentive if they want to minimize the short-term damage, especially since Sony isn't giving them even a moment's rest this time.

18 Comments
18 Comments
Posted by bgdiner

I'm surprised Microsoft didn't lower the price of the XONE to match Sony with this announcement. I don't know how many families will pay $100 more for a system that has been criticized in the media for being anti-consumer and unsure of a proper direction for their console. If anything, price is the real determining factor here, and I'm sure we'll see a price drop before much longer. But great piece overall.

Posted by YukoAsho
@bgdiner said:

I'm surprised Microsoft didn't lower the price of the XONE to match Sony with this announcement. I don't know how many families will pay $100 more for a system that has been criticized in the media for being anti-consumer and unsure of a proper direction for their console. If anything, price is the real determining factor here, and I'm sure we'll see a price drop before much longer. But great piece overall.

Good point. The media outside of gaming hasn't quite pursued MS' change in policies with the same fervor they went after the controversial ones. Negative news spreads faster than positive in the sensationalist, 24-hour news world.

Posted by jimmy_p

While strong competition always produces good results, I'm hoping that the xbone fails spectacularly. Microsoft already dominates the OS market shares. I dont want to see it dominate the console market.

Posted by Nightriff

Very well written, I just keep going back to the point that yes they are reversing these policies that put me off of the product (despite all the distrust and frustration they have caused me the previous 8 years) but even then...by most accounts it is inferior to the PS4 hardware wise and is $100 more including a device (that now) you don't even need to use nor will I ever use if I were to purchase one.

Vinny's reaction on the Bombcast is exactly how I feel. What are they doing over there? They have backtracked so much, do they even know what type of product they are going to release? I still think they should've stuck to their guns, took a hit until the next Halo/system seller type of game comes out. I actually would've gotten one in the future despite all the things I didn't like. But now I just don't see the point in owning one with a PS4 being on my shelf in a few months. Their exclusives aren't enough for me to buy a console (Titan Fall looks and sounds rad though) and I'm curious to see how the public responds to all these changes, should be a very, VERY interesting 2 years to see everything play out.

Posted by Darji

@bgdiner said:

I'm surprised Microsoft didn't lower the price of the XONE to match Sony with this announcement. I don't know how many families will pay $100 more for a system that has been criticized in the media for being anti-consumer and unsure of a proper direction for their console. If anything, price is the real determining factor here, and I'm sure we'll see a price drop before much longer. But great piece overall.

Gamescom.

Edited by YukoAsho

@darji: Why the fuck are they waiting if that's the case? If they'd put that announcement in at the same time as the non-mandatory announcement, it would have only been seen as ONE reversal. Announcing it separately will be seen as a separate reversal, and only serve to reinforce the notion that they're lost and confused.

@nightriff: Yeah, "what the fuck are they doing?" is a good question.

@jimmy_p: The Xbone would never have come to dominate, even had Microsoft not cut its feet off and ate them. They've only ever had blockbuster success in the US and UK, and even then. Eurasia, Japan, Oceanea? Sony country. Then there's Nintendo, a company that, despite its self-inflicted wounds, have shown remarkable tenacity. They continue to show no signs of going away any time in the foreseeable future.

Posted by Darji

@yukoasho said:

@darji: Why the fuck are they waiting if that's the case? If they'd put that announcement in at the same time as the non-mandatory announcement, it would have only been seen as ONE reversal. Announcing it separately will be seen as a separate reversal, and only serve to reinforce the notion that they're lost and confused.

@nightriff: Yeah, "what the fuck are they doing?" is a good question.

@jimmy_p: The Xbone would never have come to dominate, even had Microsoft not cut its feet off and ate them. They've only ever had blockbuster success in the US and UK, and even then. Eurasia, Japan, Oceanea? Sony country. Then there's Nintendo, a company that, despite its self-inflicted wounds, have shown remarkable tenacity. They continue to show no signs of going away any time in the foreseeable future.

They need some shocker for their press conference. They had one maybe wioth the whole every Box is a devkit thing but that got leaked. Also they can do it because re orders are not that god in Europe. They don't need to go after the US audience but they really need to go after the EU market.

Edited by Jimbo

@yukoasho: Spot on analysis and great thread title.

My only reservation with predicting a Kinectless SKU of the system (especially pre-launch / near future) is the name. They've needlessly painted themselves into a corner with that and I think it'll become a marketing nightmare for them if they have to try and explain to a casual audience how/why there are now two Xbox Ones available with radically different functionality. All of their marketing & positioning to date has been based on the camera and the single-solution-ness of the system - undoing that will be a whole other level to walking back the DRM.

My prediction is they'll keep the Kinect in the box and just take the $100 hit. If there's one advantage MS has over Sony it's being obscenely profitable and wealthy. They can afford to throw a billion dollars at the problem if they want to (what's that, like 3 weeks profit for MS?), and I think that's what they'll choose to do. The alternatives are removing the camera (unacceptable right now, imo, but yeah maybe down the line) or launching $100 higher than the PS4 and effectively forfeiting this generation.

Posted by RonGalaxy

@jimbo said:

@yukoasho: Spot on analysis and great thread title.

My only reservation with predicting a Kinectless SKU of the system (especially pre-launch / near future) is the name. They've needlessly painted themselves into a corner with that and I think it'll become a marketing nightmare for them if they have to try and explain to a casual audience how/why there are now two Xbox Ones available with radically different functionality. All of their marketing & positioning to date has been based on the camera and the single-solution-ness of the system - undoing that will be a whole other level to walking back the DRM.

My prediction is they'll keep the Kinect in the box and just take the $100 hit. If there's one advantage MS has over Sony it's being obscenely profitable and wealthy. They can afford to throw a billion dollars at the problem if they want to (what's that, like 3 weeks profit for MS?), and I think that's what they'll choose to do. The alternatives are removing the camera (unacceptable right now, imo, but yeah maybe down the line) or launching $100 higher than the PS4 and effectively forfeiting this generation.

Sony actually has more assets than MS does. MS has a bigger net income, but sony is fully capable of throwing billions of dollars at the ps4

Posted by Jimbo

@naru_joe93: Assets aren't going to help them pursue a policy like that, cash reserves and running a healthy profit will, and Sony aren't doing great in either regard. Sony would find it much harder to justify taking a hit on the console right now than Microsoft would (but then, Sony shouldn't need to, because they don't have the Kinect millstone around their neck to deal with).

Microsoft could drag this into a price war anytime they felt like it if they really wanted to and Sony would have no chance of competing.

Edited by EXTomar

Competition is good but when the competition is trying to compete with bad policy and distraction how valuable is that competition?

Edited by HerpDerp

@extomar said:

Competition is good but when the competition is trying to compete with bad policy and distraction how valuable is that competition?

After the press conferences I had figured Microsoft was trying to pick up more of the 'casual' audience through their marketing/cloud based gaming pushes, where as Sony seemed to be redoubling it's efforts to appeal to the more 'hardcore' audience. In the weeks since E3, Microsoft seems to be trying desperately to win over the 'hardcore' audience by trashing all the shit they had said in the past was irreversible. So now I'm quite honestly wondering, just who is Microsoft really trying, and successfully, appealing to?

Edited by EternalVigil

Great analysis of Xbox's current woes. I have to admit I'm a little worried about how stable it will be given the massive patch they're doing on day 1, trying to change the hard code with something they cooked up in 4-5 months.

I think they're too far gone to change anything else, and honestly I'd think in their best interest to try and calm down with the policy reversals for the meantime, as it's just going to confuse more people at launch if they suddenly turned round and had a day one kinectless bundle.

If I were microsoft right now, I'd take the hit during launch, let the dust settle, and see what the pros and cons of the PS4 are once its clear and try and push them like crazy. Getting exclusives that really showed what the kinect can do and actually make it a viable piece of tech would also help.

Posted by YukoAsho

@jimbo said:

@naru_joe93: Assets aren't going to help them pursue a policy like that, cash reserves and running a healthy profit will, and Sony aren't doing great in either regard. Sony would find it much harder to justify taking a hit on the console right now than Microsoft would (but then, Sony shouldn't need to, because they don't have the Kinect millstone around their neck to deal with).

Microsoft could drag this into a price war anytime they felt like it if they really wanted to and Sony would have no chance of competing.

Well, I don't know if that would help, per se. MS is wildly profitable in the shrinking desktop OS and office spaces, but they've had absolutely no traction in any other market they've entered other than consoles, which they're in real danger of having undone with the Xbone. At some point, MS needs to decide whether to anger shareholders by throwing too much money at all these initiatives, or picking the ones that are most important to the company and going full-bore there. I can't help but think they'd be better served putting their muscle in the tablet market, where they're far less likely to get called out for anti-competitive practices.

You are right, however, in your earlier post when you mention a price point of $100 more essentially being forfeiture of the generation. I'd go so far as to call it a forfeiture of the longer-term console market, as the likelihood of MS being given the keys to the kingdom by Sony again (let's face it, that's what Sony did in '06) is very low. Trust in the Xbox division is at an all-time low, and it's going to take more than money to overcome that issue.

@eternalvigil:

If I were microsoft right now, I'd take the hit during launch, let the dust settle, and see what the pros and cons of the PS4 are once its clear and try and push them like crazy. Getting exclusives that really showed what the kinect can do and actually make it a viable piece of tech would also help.

You're right that it's likely in MS' best interests to just accept that Holiday '13 is a loss and work toward building up for Holiday '14. However, I don't think MS is humble enough to accept what most of us see as a foregone conclusion. Whether they rip out the Kinect after initial failures, who knows, but I don't see MS reacting in any way resembling patience.

Posted by YukoAsho
Posted by JJWeatherman

@yukoasho said:

First off, your own poll shows that you're in the minority.

Second, you've not only failed to dissuade me from continuing to use Xbone, you've contributed fuck all to the discussion.

Better luck next time.

Oh, I clearly and absolutely intentionally contributed nothing to your discussion. I thought it obvious that I had my own agenda. Thank you for the well-wishes, though.

Posted by GrantHeaslip

Sorry, I'm a bit late to the party replying here.

In the two months since E3 (and in the face of presumably lopsided pre-orders) Microsoft has backed off on nearly all of its controversial policies, leaving only the forced bundling and $100 premium remaining. However, in doing this, they're going to have a shit ton of work ahead of them, and a very short time frame to get it done. We all know that new Xbones will need to undergo a "one-time setup," online, and anyone with a brain can infer that this is a day-one patch to replace the pre-E3 firmware with the current, less controversial firmware. This likely entails re-writing reams of code that took a hell of a lot more than four months to write in the first place, and with this latest reversal, making a version of the front-end that is more intuitive for people who've thrown their Kinect in the closet. Delaying the console is almost certainly out of the question, as they don't want to miss Black Friday.

Look, I'm not planning to buy an Xbox One, but almost everything you said here is unsupported conjecture.

The one-time setup idea always sounded to me like they wanted to ensure everyone went through the rigmarole of setting up an Xbox Live account, and hopefully a payment method. A connected customer is worth more to Microsoft, both because they can be advertised to, and because they can buy stuff. Yes, it helps that they'll get the inevitable day-one patch (which I'm sure the PS4 will have too), but do you really think the issue here is that the launch firmware won't include changes they announced in July?

Likewise, I'm not at all convinced that changing the online policies and not requiring Kinect is that big of an engineering challenge. The system was already capable of being offline, they've just removed the 24-hour check-in, which seems to me like it actually simplifies the firmware and removes a potential source of post-launch issues.

I haven't paid a ton of attention to the Kinect stuff, but I'm pretty confident the system was already capable of (effectively) operating without a Kinect. Yes, they wanted it plugged in, but the menu has to have been entirely navigable without the Kinect from the start. Would the system grind to a halt if you had a coffee table in the way, you were playing on a desk with the Kinect too close, you were playing in the dark, or you just didn't want to bother with voice and gestures? In both cases, I don't think the engineering burden is all that high.

You're spinning a narrative here that I don't think has much basis in reality. Yes, this stuff has been a bit of a clusterfuck and doesn't inspire confidence, which makes it all the more puzzling that you've gone out of your way to spin potential issues when there are so much more obvious ones right in front of us.