Microsoft – Damage control

Microsoft’s climb down is a very encouraging sign. 

• In response to general clamour, Microsoft has changed its policies with respect to the Xbox One on both online use and used games.
• The only remaining difference between PS4 and Xbox One now remains the price and I expect that too, will fall into line prior to launch.
• The online requirement has now been reduced to one time system setup when the device is powered up for the first time.
• Limitations on the sale, sharing and trading of games have also been lifted.
• Microsoft was at pains to state that disc-based games would function on the Xbox One exactly as they do on the Xbox 360.
• Here is the catch: Disc-based games.
• Microsoft says nothing about how games that have been downloaded to the console will work.
• For the smaller games this is irrelevant.
• It is where the big $60 games have been downloaded where this will make a difference.
• I suspect that the vast majority of these games will be available on disc as well as download meaning that the console logically should treat them equally.
• If it does not, no one will buy the games online which will be a major blow to Microsoft’s ambition to get people buying stuff through its Xbox Live service.
• It makes no sense for Microsoft to program the console to treat the big games differently depending on how they have been purchased.
• Hence, I do not think that this is a sleight of hand.
• I think that this is a change of direction by Microsoft in response to intense criticism and the very real risk of losing market share in the living room.
• This is particularly encouraging because of the strategic importance of Xbox to Microsoft’s overall strategy to be a part of the user’s digital life.
• The games get the device under the television but it’s the other things it can do around video, communication and so on that will really make a long-term difference.
• I am have been long concerned with the “ivory towers” syndrome at Microsoft where each business unit exists in glorious isolation and acts solely in its own interest.
• It is excellent that Don Mattrick has taken one for the team.
• This embarrassing climb down does little for his business, but is incredibly important for Microsoft as a whole.
• It gives me hope that that Microsoft can overcome its legacy and become so much more than the sum of its parts.
• It is belief in this outcome that makes the shares interesting.