E3 leaves Microsoft punch-drunk

Sony attacks Microsoft’s weak point for massive damage during one of the most thrilling E3 conferences in years. By Lance Harris.

Can Microsoft Ryse again after a poor E3 showing?

Can Microsoft Ryse again after a poor E3 showing?

A couple of weeks ago, I wrote that Microsoft’s arrogance didn’t yet compare to the hubris of Sony with the PlayStation 3 circa 2006 and that the Xbox One reveal in May wasn’t its giant enemy crab moment. Nope, it wasn’t, but after the Electronic Entertainment Expo (E3) this week in Los Angeles, the company’s Xbox division is neck-deep in PR blunders as big as Sony’s outsized crustaceans.

At the expo, where the gaming industry gathers every year to present the hottest games and hardware, Microsoft and Sony set out the roadmaps for the release of their competing next-generation consoles later this year. After gamers gave a hostile reception to the Xbox One announcement briefing and its focus on the future of TV, Microsoft vowed that E3 would be all about games for the gamer.

The software giant entered the E3 coliseum bloodied by weeks of bad PR about draconian digital rights management (DRM) policies planned for the upcoming Xbox One — particularly new restrictions on the lending, renting and resale of physical media games. Here, it needed to impress early adopters with compelling games as well as try to soothe their fears about DRM.

In its conference, Microsoft came out swinging with a selection of games that seemed impressive at first glance. But then it dropped the bombshell — a hefty US$499 retail price for the Xbox One in a market where new gaming consoles such as the Nintendo Wii-U and PlayStation Vita are already struggling in the face of competition from tablets and smartphones.

The bad news has piled on since — a continued lack of clarity about DRM; a very limited global roll-out of the console (only 21 countries will get it this year and South Africa isn’t one of them); and a bizarre hard-line stance on regional locking of content. What’s more, Microsoft has deliberately obfuscated answers to key questions such as whether it will use IP-blocking to prevent importers in countries outside launch territories from buying its product. It’s almost as if the company has already given up on the fight everywhere outside the US, UK and Canada.

Fleeing from the press
Ahead of the event, trouble was already brewing for Redmond. A day or two before E3, news started circulating that Microsoft had cancelled one-on-one interviews with many key gaming journos as well as a media roundtable. It was generally thought that Microsoft wanted to avoid the hard questions about used games, online requirements, TV and the power of its hardware.

As it turns out, limiting face time with the press was one of the few smart things Microsoft has done since it announced the Xbox One. In the few interviews granted, Xbox honchos opened their mouths mostly to change feet. The content and delivery of their responses to legitimate concerns about the platform were supercilious, condescending and out of touch.

Now what?

Now what?

Don’t have a good broadband connection? Be grateful that you can still buy an Xbox 360, you peasant. Should Microsoft care what customers think about its product? No, because this is not a sprint, it’s a marathon.  Also, it is customers who are uneducated and scared of change, not Microsoft who has complex terms and restrictions it is communicating in an unclear and dishonest manner.

Did Microsoft bring the games as promised? Yes and no. There are promising exclusive titles in there — like Remedy’s television series and game, Quantum Break, yet another Halo, and Insomnaic’s colourful shooter Sunset Overdrive, but we’ll probably be waiting a year or more to play them. And the most appealing “exclusive” game — Titanfall from Call of Duty creators Infinity Ward — will also be on the Xbox 360 and PC when it launches mid-2014.

Of the launch window exclusives, Forza 5 looks decent, but not groundbreaking, Dead Rising 3 loses the goofy humour of its predecessors, and the return of the beloved Killer Instinct franchise comes with the drawback of a potentially obnoxious free-to-play charging model.

Ryse, which has been in the works at Crysis developer Crytek for seven years, sounds like an expensive flop. Ditto Crimson Dragon, which, like Ryse, started out development as an Xbox 360 game. And smaller games like Project Spark and D4 received such offhand treatment that it’s hard to say what they will be like. There is simply no good reason to buy an Xbox One yet, considering its price tag and drawbacks.

The haymaker
A few hours after the Microsoft presser, Sony took the stage to present its launch plans for the PlayStation 4. Most of the press conference was pedestrian, focusing on games we’d seen before, but towards the end of the show Sony staggered Microsoft with a haymaker that was beautiful to watch.

With two PowerPoint slides — one detailing a $399 price point, another promising no new DRM or used games restrictions — Sony hit the most vulnerable parts of Microsoft’s strategy. Amid the excitement, no one seemed to notice that the games Sony presented were mostly lacklustre or not exclusive to its platform. (To be fair, Microsoft has already announced most its line-up for the next year, while Sony has said little about what we can expect from its own studios beyond the PS4 launch window.)

Sony is writing the narrative for the next skirmish of the console war, and it has cast itself as the hero championing the consumer, the games developer from the one-man indie operation upwards, and the gamer. Reality is more complex, of course. Sony is just claiming the easy marketing win Microsoft handed to it.

Sony knows all too well that the issues of used games and licensing physical media will go away as digital downloads take over in the next decade, making it a silly fight to pick with gamers. And it’s not like Sony is really doing anything truly radical for consumer rights like discouraging publishers from using DRM protections of their own.

fsfd

Sony revealed the PlayStation 4 hardware at E3

But the following can be said about the Sony PlayStation that is no longer true of Microsoft Xbox. It might not be a charity, but at least Sony is thinking about the world from the perspective of its customers.

Where Xbox’s best brains have all left — Robbie Bach, J Allard, Peter Moore — Sony’s strategists are on top of their game. And Sony knows there’s more to the world than America — heck, it seems even we will see the PS4 later this year when it’s launched. Perhaps most importantly, Sony has a clearer sense of its purpose and heritage as a gaming company than it has had for years.

In many respects, Sony and Microsoft have reversed the positions they held in the PlayStation 3 and Xbox 360 generation. Just like the PlayStation 3, the Xbox One is less a product designed for people who play and develop games than a Trojan horse for the technologies a corporation wants to sell them.

Controlling the future
The PS3 was about controlling the future of physical media with Blu-ray; Microsoft hopes to use the Xbox One to carve out more market share and reassert its relevance as a consumer company in a post-PC world. The Xbox One is about pushing stuff that no one really asked for on their televisions, like Azure and Bing and Skype and the Kinect motion-sensing camera.

Probably at least partially due to the Kinect camera and HDMI-in port shipped with every Xbox One, the machine is more expensive and yet marginally less powerful as a games machine than the PlayStation 4. Microsoft wants to use it to compete with everyone — Sony, Google, Apple, Amazon, Valve — and the result is a muddled message and a compromised console.

Killzone Shadow Fall will be the big launch title for the PS4:

Sure, Microsoft is not going to exit the gaming market any time soon, particularly given its current dominance in North America. It has enormous goodwill among developers and publishers who made a lot of money from the Xbox 360, meaning it won’t lack for Xbox One content. And it could still change course about the most unpopular elements of the Xbox One as it has about Windows 8. But it had potential to do so much better with the Xbox One than it will after the early fumbles.

The final takeaway from E3? Neither Sony nor Microsoft has really given any good reason to buy their new consoles this year. The PS3 has a crackerjack set of exclusives for this year — games like Gran Turismo 6, Beyond: Two Souls, The Puppeteer and The Last of Us look more interesting than most of the content for the new consoles.

Even the best-looking multiplatform games for the PS4 and Xbox One — Assassin’s Creed 4, Watch Dogs, Call of Duty: Ghost and so on — will be available for the PS3 and 360. For now, the most entertaining part of the next generation is watching a fight where one of the contestants is repeatedly punching itself in the face.  — (c) 2013 NewsCentral Media

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  • http://www.InTheCube.co.za/ InTheCube.co.za

    >>> For now, the most entertaining part of the next generation is watching a
    fight where one of the contestants is repeatedly punching itself in the
    face.

    Lol… Microsoft have definitely messed up, but it’s still too early to start counting scores. A lot can change between now and the actual launch dates. It will be interesting to see how this plays out.

  • Greg Mahlknecht

    Interesting, if not a little crude, perspective from a (alleged) XB1 engineer – comments harvested from a 4chan thread: http://pastebin.com/uCmdh9jB – he makes a lot of good points.

  • Greg Mahlknecht

    Some of the important points, to save you decrypting the rambling:

    - MS see this generation of consoles going digital downloads like Steam (every PC gamer I know prefers Steam to physical media, and I get all my games from there – maybe it’s time for consoles to catch up), and the DRM stuff is for that. It will enable in the longer term the crazy Steam-like specials. MS communicated this horribly, they should have stood up, said “It’s like Steam, but you can lend/resell” and they would have got cheering.

    - The long-game is owning the living room. It’s not just about gaming for MS. It is for Sony. One would expect them to get slaughtered at E3 for this message, but again – awful PR from Microsoft’s side.

    - There seems to be a feeling the 24-hour-connect will be revisited before launch

    - The cloud aspect is more than just computing, it gives devs multiplayer back-end architecture for free, and for all time, so we won’t get companies like EA taking them off line after a few years. It should also do away with the P2P multiplayer stuff (games hosted on consoles) and move that to the cloud. Expect to see a massive step forward in multiplayer gaming.

    I’m not a console gamer so don’t care either way who wins, but Sony have definitely taken all the safe choices, they can’t afford to battle on this console gen – MS have taken some bold steps forward – whether they succeed, who knows – but one things for sure, Microsoft PR is as bad as it’s ever been.

  • Lance Harris

    I tend to think bad PR normally comes from bad business strategies – companies doing smart, ethical things normally generate good PR without too much effort. Here at least part of the problem is that Microsoft has a confused product and an unhealthy contempt for its customers, not that its spin doctors are doing a bad job.

    If you’re a PC gamer with no experience of the console world, the fuss about Xbox One DRM probably seems weird to you because trading, renting, collecting and lending games has always been part of console culture in a way it never was part of PC gaming.

    The fact that Microsoft didn’t understand that and foresee the backlash shows how just little it understands about its Xbox customers these days. The fact spent weeks in paralysis after the Xbox One reveal makes me wonder exactly what people in Seattle have been thinking and doing. I can’t help suspecting what they had planned before the backlash was even more unfriendly to their customers, hence the weeks take to make a semi-clarification.

    (I’m not commenting on the DRM issues themselves because they’re complex, but on how Microsoft has handled them in a way that appears arrogant and ignorant. For me, they’re not as consumer-hostile and out of date as the things Microsoft appears to want to do around region locking.)

    Simple analogies with Steam don’t work. Microsoft is nowhere near offering the same benefits as Steam with the Xbox One in exchange for taking away things that people have grown used to over the years.

    Console games are more expensive than PC games – in Microsoft’s Draconia, will they be priced more like PC games? Steam has generous sales. Steam works online without phoning mommy once a day and so forth.

    The owning the living room strategy is also misguided, to say the least. It’s a solution in search of a problem because shareholders and analysts demand that Microsoft shows that it is serious about fighting Google and Apple. It’s completely out of touch with how people consume media and information in the real world, it’s a desperate attempt to make people use Bing and other stuff no one wants, and it’s tied to something as legacy as broadcast TV to boot.

    I know no one who wants to browse the Internet while they watch Game of Thrones, or who finds talking to a TV easier than using a remote control or who will buy another box to plug their set-top box/ decoder into. Who exactly are these people Microsoft thinks will cough up $500 to make Skype calls on their HDTVs while they’re watching the NFL, especially since they already have iPads?

  • arrow2010

    What a ridiculously biased article.

  • John Mitchell

    I got that feeling too…

  • Greg Mahlknecht

    >A lot can change between now and the actual launch dates.

    Yup, all the MS actually needs to do, is make it possible to play the game offline with the original disk in the drive. All the DRM stuff they’ve added – while it seems draconian – allows for a lot of improvement for the consumer and is very much in line with accepted PC digital distribution standards – in fact they’re better.

    When Steam came out, I hated it – no game reselling or giving to friends (it’s still this way), but as time went on, the advantages of this business model became clear – the famous crazy Steam specials which make the older games (the type you might buy 2nd hand) dirt cheap, which rendered that entire 2nd-hand argument moot. I’d still like to give my Steam games to someone (Bioshock Infinite and the new XCom were big disappointments for me that I bought based on reviews), but I won’t lose sleep over that.

    There’s no doubt MS made some mis-steps, but they’re easily rectifiable in the months ahead. This is a 10-year gameplan, and everyone is still in a tailspin after a 3-day E3 feeding frenzy, which Sony is very much implicit in. They just had to wind their fanboys up and let them loose. I find it amazing that Sony are the good guy for saying “we’re not trying anything new” – I understand why – the company is in trouble and they can’t afford to try anything bold.

    As you said, though – it’ll be interesting to see how this plays out. I haven’t bought a game of physical media for 5+ years, and use cloud saves whenever a game supports them – so the online requirement is something I imposed on myself ages ago, because even though it can bite you in the bum if your internet is down, the positives FAR outweigh the negatives.

  • Lance Harris

    Biased against or for who, I wonder?

  • Lance Harris

    The 10-year plan – another leaf Microsoft is taking from the Sony 2006 playbook ;)

  • Greg Mahlknecht

    >If you’re a PC gamer with no experience of the console world, the fuss about Xbox One DRM probably seems weird to you because trading, renting, collecting and lending games has always been part of console culture

    That’s how it was with PC gaming 10+ years ago, actually. My friends did it like that all the time. And PC gamers winged like stuck pigs too when things started going the download way. But they’ve voted with their wallets and it’s now the leading method of getting games. There will always be an adjustment period. I just see this as history repeating itself, dragging the console distribution model kicking and screaming into the new world. I find it really strange a seasoned gamer like you doesn’t welcome the move towards the console equivalent of Steam where you can actually sell your digital game or give it to others. Sure, there are restrictions, but that’s obviously the best deal MS could strike with the publishers, which seem to be massively powerful. Sony are obviously giving it gears because they don’t have anything like it, and the 2nd hand market hates it because it does a lot to cut them out.

    >Simple analogies with Steam don’t work. Microsoft is nowhere near offering the same benefits as Steam with the Xbox One

    Actually, what MS is offering is better. The only sticking point is the offline play, which is easily fixable by changing that time period.

    >The owning the living room strategy is also misguided, to say the least.

    Why? Are all those reports about people using consoles more for consuming media than playing games false? Consoles are the #1 consumption method for Netflix. If they actually had to change the console architecture negatively to make their living room strategy real, I’d agree with you – but they haven’t. What’s needed to deliver their living room vision is a direct subset of what’s needed for gaming.

    >Who exactly are these people Microsoft thinks will cough up $500 to make Skype calls on their HDTVs while they’re watching the NFL, especially since they already have iPads?

    I think you just answered your own question. The XB1 is an attempt of an all-encompassing solution. And all those things you mentioned are software-based. I agree it costs too much – but it gives the user the ability to do any and all of what you proposed. Yes, they have iPads, which is why MS has hooked those in with their SmartScreen stuff.

  • Greg Mahlknecht

    Not sure what you’re getting at, but if that’s the case, Sony should have taken that page from their own playbook. PS4 really addresses today’s gaming needs and trends, and doesn’t look even a few years down the road to the future.

    Lost in the DRM FUD were MS’s unveiling of their actual gaming features – the original PS4 reveal went overboard about their social stuff, not many people seem to know XB1 matches and/or betters PS4 here, in what Sony touted as their biggest new feature for gamers. And that this whole aspect of the console requires an internet connection while gaming. Even for the PS4.

    I agree 100% with you for our local gamers PS4 is better, but if we had easy access to Netflix, Amazon VOD (like the XB1′s main target market does), things change.

  • Greg Mahlknecht

    >I tend to think bad PR normally comes from bad business strategies

    With Microsoft, bad PR and marketing is the default. It astounds me how badly wrong they get it. Every time. Year after year.

  • Lance Harris

    Greg, there is a nuance to my argument that I’m perhaps not being clear enough about. I’m less concerned about WHAT Microsoft is doing than HOW it is doing it. The fact that it hasn’t been able to communicate clearly about this matter means one of two things:

    (a) It is trying to hide aspects of its policies that it thinks people won’t like

    (b) it hasn’t thought the implications through properly and is winging it

    Either way that’s deeply concerning when a company asks me to effectively trust it with a games collection I might put together at great expense over a number of years. Put simply, the way Microsoft talks to and about its customers doesn’t inspire confidence, and this isn’t just PR, but how you do fundamental things as a business.

    Also, I’m at a loss how anyone can think some of the implications of Microsoft’s plans are ok. One example: if you get banned from Xbox Live, you will lose your Xbox One game collection. Good, you might say, that will finally stop the kidiots on Call of Duty from unleashing racist and vulgar invective on other people.

    Except, you can be banned from the service by complete accident. I was once locked out from Xbox Live for three weeks because of a credit card glitch that was not my fault, and I needed to track down a human person to fix the problem,
    which wasn’t easy.

    Arguably, even if I am banned for swearing at someone in a multiplayer game, I don’t deserve to lose my property. If that’s the implication, then Microsoft needs to put a proper per-month or per-use pricing model in place and make it clear I’m using a
    service rather than buying a product.

    Another example: I live with a foot in two different countries. Steam works in either on my notebook with no fuss. With what Microsoft is proposing with the Xbox One I would need a separate account and set of game licences for each! In
    a world of globalisation and the Internet, Microsoft wants to enforce region-locking from the stone ages.(I’m not sure how harshly Microsoft plans to enforce this in practice, but the fact that it won’t be honest about it that is one of the big axes I have to grind).

    I’m also not really that convinced that consoles truly have to be online. Let’s forget silly examples like sailors on nuclear submarines and soldiers in Iraq, there are plenty of other use-cases for an offline console. If I had a console for the
    primary use of a small child, I would prefer it to be completely offline, for example.

    99

  • Lance Harris

    What I’m driving at is that Sony already made its big bet and “won”, but at enormous expense, after famously claiming it had a 10-year plan.

  • Greg Mahlknecht

    >One example: if you get banned from Xbox Live, you will lose your Xbox One game collection

    I think at this point, that’s speculation? The fact MS will allow you to share your entire game library with up to 10 “family” members (which can be non-family) and allow up to 2 people to play them at once, shows they might not be as draconian about this as people think. That’s a surprisingly generous policy, as far as I’m concerned. It’s similar to their Office 365 policy (use a license on 5 PCs and 5 mobile devices).

    >With what Microsoft is proposing with the Xbox One I would need a separate account and set of game licences for each

    From what I’ve read about this, MS’ region locking policy is the same as X360 (which was the same as PS3 (which I assume is the same as PS4, Sony hasn’t said yet) ) … which is up to the publisher’s discretion anyway. So if you were happy with PS3/X360 region locks on games, XB1 won’t bother you.

    >I’m also not really that convinced that consoles truly have to be online.

    Agree 100%. You need to be able to buy a disk and have that handle the DRM as a physical lock, like consoles always have. MS know how to do this from the X360 – let’s hope they listen to the feedback from the past few days and keep that functionality. Seems a no-brainer.

  • Lance Harris

    >I think at this point, that’s speculation?

    Nope, confirmed by Xbox Live support on Twitter (will look up the reference sometime).

    >From what I’ve read about this, MS’ region locking policy is the same as X360 (which was the same as PS3

    This about the authentication of your software from your Xbox Live account. If you moved to Poland from the US, and you tried to log in with your original account, Microsoft support says your game licences might not work. Will they enforce this by IP-blocking or is it just something they’re saying to discourage importers? No one knows as yet.
    PS3 game discs are all region-free (there’s just one exception in the entire library, I forget what it is), where Xbox 360 discs are left to the discretion of the publisher. I really hope Sony goes the same route again rather than letting the publishers choose.

  • Lance Harris

    I’m pretty sure the reason Microsoft is communicating so badly is that it hasn’t really known what it wants to communicate – we had nearly a month of radio silence. It’s making this all up as it goes along, and has needed to change its plans and policies substantially during the weeks between the reveal and E3.

    Also, the policies and rules are just too complex for a living room product. You need to be a lawyer to understand them – not good for products that used to be plug ‘n play.

    I may be cynical, but I also think this 10-game sharing thing is going to end in tears for someone – whether publishers or users remains to be seen. I wonder if it will be mandatory for all publishers ?
    Anyway, the DRM circus probably won’t matter that much – it will be pricing and logistics that matters in who seizes the early lead. Everything points to Sony getting more hardware into more markets cheaper and faster than Microsoft. Microsoft will win North America again, but battle everywhere else.

  • Greg Mahlknecht

    >I’m pretty sure the reason Microsoft is communicating so badly is that it hasn’t really known what it wants to communicate

    No, the reason they’re communicating badly is that they always have and seemingly always will communicate badly. This is par for the course for them. Look at the Windows 8 PR abortion. And their RT tablet. All great products for their market, but misunderstood because of MS’ message.

    >Also, the policies and rules are just too complex for a living room product. You need to be a lawyer to understand them

    “Up to 10 of your friends can play your game library. Up to 2 can play each game the same time. All games available as digital download on day one.”. Really, Lance, I think you’re not giving today’s youth enough credit.

  • vastreammonster

    Man, this has to be the most fair unbiased article I have read about this whole Xbox One fiasco. You were fair, logical and made very good points. Why can’t everyone else see it from this actual point of view? Must they be so blinded by brand loyalty?

  • Lance Harris

    Except, it’s not my opinion that the bad PR is their problem; that’s your opinion. My opinion is that the bad PR comes from bad product strategy, rooted in the fact that the original Xbox division’s architects are gone and the people that are left don’t understand their market. Of all the things I would do to fix the current situation in Microsoft’s position, PR would come last.

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