Strategies for video game console are typically planned years in advance, but the course has been anything but clear for the Xbox One. In the months since Microsoft introduced the next-generation system, the company has made four major policy reversals—and there's no telling if it's done yet.
At stake is Microsoft's leadership position in the $70 billion video game industry. For the past 30 months, the Xbox 360 has topped console hardware sales, but Sony's PlayStation 4 is resonating with gamers as the next generation looms. And investors are trying to determine whether the Xbox team is scrambling to catch up or is simply showing a willingness to preemptively respond to market feedback.
The series of 180 turns started in June, when Microsoft went back on its "always-on" Internet and used-game policies (after vigorously defending them the previous week at the E3 trade show). In July, the company announced plans to let independent game makers self-publish titles on Xbox One after initially saying it would not allow that.
Earlier this month, Microsoft slid on earlier claims that the system would ship without a bundled chat headset. And this week it said that the Kinect sensor, which enabled audible and gesture commands, will not have to be plugged into the Xbox One for the console to operate after all. In May, it had virtually declared that the heart of the system.
The company has cited "feedback from the Xbox community" for most of the changes, but Sony deserves some of the credit, too. The company has been needling the Xbox One since E3, with a sharp eye on the issues that consumers have complained about.
"Moves like these are kind of unprecedented—especially from Microsoft," said John Taylor, managing director of Arcadia Investment. "My guess is when they unveiled the [Xbox One] in late May, it was their hope and belief that people would be impressed enough with the features it offered that there would not be a ton of pushback. I think Sony has played the PR game masterfully. Much of this comes from the direct response from Sony at E3 and subsequently."