15 June 2013

Microsoft Should Change Their Xbox One Policies - But They Won't

UPDATE: As it turns out, I was wrong. Microsoft have indeed changed many of their Xbox One policies. We'll see in the long run whether it was the right decision.

ORIGINAL POST: This was an unusual E3, in more ways than one. It was the first E3 since 2006 in which both Sony and Microsoft had hardware on the way.

It was also Microsoft's best E3 in years. Yes, by itself Microsoft's E3 presentation was stellar. The company had no celebrities on stage, no dance numbers, no children trotted out to play with Kinectimals and despite some technical glitches the media briefing passed off with any major embarrassments. Phil Spencer did stumble when announcing the price, but that's understandable, there must be an incredible amount of pressure when you walk onto that stage.

Microsoft also avoided talking about entertainment or services to any great degree - as I've argued before, they spent far too much time at the announcement event dealing with that side of the console.

They promised games, and they delivered. Microsoft has a stronger lineup overall than Sony though of course that's an empirical observation; matters of taste and preference will come into play here, even so they had a great press conference but...

It's a hell of year Sony can announce that they're going to start charging for multiplayer (it will remain free on PS3 and PS Vita) and have a weaker overall lineup than Microsoft but still come away with an emphatic E3 victory.

Microsoft failed to address the valid concerns surrounding the Xbox One's internet connection requirement and used game policies and in the days that followed it grew worse. First there was Don Mattrick's comments that those with a poor connection, or no connection at all, could "buy a 360".

It then emerged that Microsoft had invited CD Projekt Red to their E3 media briefing without telling the notoriously anti-DRM Polish studio that they couldn't play their game - The Witcher 3: Wild Hunt - in Poland on Xbox One as Xbox Live will not be supported in the country upon the launch of the platform. Xbox Support has since ruled out the possibility of importing.

In fact, Microsoft's console won't work at launch anywhere in Asia, Africa, Eastern Europe or South America (with the exception of Brazil). This means that advanced economies like South Africa, Portugal (strangely left out amid the Western European countries that will support the system), South Korea and Poland are all Xbox One no-go zones.

Yes, Microsoft will expand the system to many of these countries in time but it may be too late by then to make an impact. Sony has only confirmed that the PS4 will launch in Europe and North America this year, they haven't even spoken about Japan - their home market, the reasoning here is understandable however.

Microsoft dominates in North America, if Sony is to challenge that dominance they have to get the PS4 out around the same time as the Xbox One. In Europe, it's a different story; the PS3 is regularly the best selling console in the region. So it's equally important for Sony to launch the PS4 out in Europe early to maintain their market share. Sony's Worldwide Studios President Shuhei Yoshida has commented that Europe is "hugely important market".

Japan is safe for Sony. Granted, they're not launching there this year - an indication of how secure they feel - but the fact is there's little foreseeable possibility of Microsoft toppling Sony in their home market. Indeed, if you look at the comments of Microsoft's Adam Bowman the company plans to increase their market share in Asia with games like FIFA, Assassin's Creed and Final Fantasy - there's a flaw there, none of those are exclusive and Final Fantasy XIII on PS3 outsold the Xbox 360 version at a ratio of something like 4:1.

You have to wonder what Microsoft's thought process was when they created a console they knew wouldn't work in most of the world and it seems highly unlikely that the titles mentioned above will shift the balance towards the console in Asia.

Peter Molyneux has expressed his pessimism for both Microsoft and Sony at E3 but specifically called Microsoft's press conference "very unprofessionally done" and said that at moment he has no reason to be satisfied with the online requirement of the system, saying Microsoft has failed to explain its value. As a former Microsoft employee, Moleyneux's comments should most likely be taken with a grain of salt.

But he isn't the only one to call out the company in the last week. Paul Thurrott, the noted Microsoft tech blogger, said Microsoft had a "disastrous" E3 and needs to "fix" the Xbox One before it launches.

How? Thurrott believes they should essentially undo every major decision that went into making the Xbox One. Launch a $399 Xbox One without the Kinect sensor, remove the used game restrictions, scrap the internet requirement.

The difficulty is, such elements of the console are most likely built into the system in such a way that Microsoft would probably have to redo the whole thing; that would cost time and a lot of money. Console R&D is an extremely expensive process, you're likely looking at several hundred million dollars and while Windows 8 is struggling and Windows Phone is floundering the fact is Microsoft has to the cash to do, but making that commitment could delay the Xbox One's launch and that's not something they'll be prepared to do.

Phil Spencer, president of Microsoft Game Studios, has said the company's Xbox One policies are "definitive" and while he left open the possibility of adapting in future the reality is it's unlikely Microsoft will choose do to so before the system launches.

One of the most visible differences between Sony's press conference and Microsoft's was the scale of the indie offerings on display.

Sony's PS4 announcement event included Jonathan Blow's The Witness, running on PS4 hardware at E3, while their press conference featured an entire segment dedicated to the genre with the promise that indie games will be included in the PS4's instant game collection offerings.

Fez creator Phil Fish said it was "almost moving".

Microsoft's Xbox One announcement, in contrast, didn't mention indies at all and their E3 media briefing's segment dedicated to indies was much more constrained. Indeed, Notch bemoaned the fact that Microsoft choose to showcase Minecraft saying "They could do SO much more".

Why such a difference in the display of indie titles? Well, these are the two Microsoft policies that could most easily be rectified before the launch of the Xbox One and really, there's no reason why they shouldn't be.

Firstly; Microsoft charges game patch fees which can run to tens of thousands of dollars, Sony does not.

Secondly; Microsoft requires a publisher, Sony does not.

In fact, speaking to Polygon Ragtag Studios' Chris Cobb commented "It's been easier to get our game (Ray's the Dead) onto a Sony platform than it has been to get on Steam. That's how drastically things have changed these days."

The standalone version of DayZ, originally a mod for Arma 2, is set to be released on PS4 but may bypass Xbox One because of Microsoft's publishing and game patching policies. Similarly; Oddworld: New 'N' Tasty won't be coming to Xbox 360 or Xbox One because Microsoft requires a publisher, this is particularly damning as Oddworld Inhabitants helped launch the original Xbox with the exclusive title Oddworld: Munch's Oddysee.

Sony's open policies have paid dividends - since February, when the PS4 was announced, the number of developers working on the console has risen from 126 to 505. Most of those are presumably indies. While they won't change their Xbox One design decisions it wouldn't take too much to change their publishing policies.

All of the decisions Microsoft has made are flawed, but there is a logic to them. A logic they have yet to explain properly. They're a massive company and have the money to pull this around but if there's a reason to be concerned for Xbox, it's the company's sales' projections.

Yusuf Mehdi, senior vice president of Microsoft's Interactive Entertainment Business, is on record as saying the Xbox One and the PS4 could sell one billion units. They expect at least 400 million consoles sold. No matter where you stand on the next-gen debate those numbers are ludicrous and the perhaps represent the biggest sign that Microsoft are living in a different world to the rest of us. If you want a reason to be concerned about Microsoft that's it, even more so than their used game and internet policies.

I've spent most of this article lambasting Microsoft and I hope they do change course (they won't) but I've pre-ordered an Xbox One nonetheless - and I've pre-ordered a PS4 - the fact is, as much as we might begrudge Microsoft and the Xbox One it's going to entertain us and that just might be enough. Sony have done a remarkable job and have changed in some ways more than anyone thought they ever would even a few short years ago (just look at the how the decision to have 8GB RAM in the PS4 came about) but it's far too early to declare Microsoft dead, or even in trouble.

Sony won a flawless victory at E3 but they haven't won the war.

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