UPDATE: Apparently, Microsoft just backtracked on most of its policy decisions over the last month. Used and borrowed game restrictions are being lifted, and an always-online connection will not be required. This was actually a great marketing move, though they still have a lot of work to do to make up for the weeks of horrible PR. I rarely see a company have the humility to back down from its decided path in order to please its customers (I'm looking at you, Netflix), and I give Microsoft a lot of credit for doing so. I apologize for the outdatedness of the article, it was written on Monday. Please visit my colleague's recent article for more information and updates.
As a recent marketing grad from the University of Maryland, I have spent the last several years reading dozens of case studies regarding public relations and marketing. Right now, watching the Xbox One drama, I feel a sense of familiarity: this has been another great case in what not to do.
To sum up the features of the Xbox One that the public has taken issue with: The device requires a fast internet connection to function longer than 24 hours; the Kinect camera device is always on, monitoring your every move, word, and heartbeat; games cannot simply be lent or resold however the "owner" would like; and rental games will no longer be supported. And like a slapstick comedian pouring liquor on a fire, Microsoft has done little but further aggravate the public since those features were announced.
Let's start with the biggest offender — the "always online" connection. Don Mattrick, the Microsoft exec in charge of Xbox, flexed his PR muscles and tried to reassure fans in an interview with Geoff Keighley. His clarification and suggestion: "Fortunately we have a product for people who aren't able to get some form of connectivity. It's called the Xbox 360."
No, Mr. Mattrick, it is the Playstation 4.
When people are concerned about their ability to access your shiny new console and all of its shiny new exclusive games, it is not advisable to reassure them by trying to pitch what they already have. That is like trying to pitch paper letters to people who you have, for some reason, forbidden from using email.
Microsoft also made sure to respond to privacy concerns regarding its Kinect sensor, which the German federal commissioner for data protection and freedom of information labeled "a monitoring device." Microsoft's solution was the ability to turn off monitoring if you'd like (and lose the ability to use many of the games and apps), and require permission to upload data from Kinect to Microsoft's servers (because we all read all of the things we agree to). In addition, Microsoft assured its audience that no background data will be monitored or uploaded while the Xbox is off (unless, of course, it is hacked, like webcams regularly are).
Last, but certainly not least, is the issue of game ownership. Xbox One owners will not own the games they pay $60 to buy. They will be permitted, by Microsoft's grace, the ability to gift their game once to one friend who is a long-term Xbox live connection. And, of course, anyone can play your $60 games on your own $500 console. How generous.
Borrowing and returning games is off limits. Used games are only with "participating retailers." Renting games is not possible. This is all from Xbox's official pitch. While I appreciate their honesty, doubling down on unpopular decisions, without any placating features, or reassurances that their way of doing things will help us, is not the way to keep fans. CNET, a neutral observer, did a better job defending Microsoft's policies than Microsoft did.
As for Microsoft's policies themselves, what it comes down to is that they has targeted a certain consumer segment: a well-to-do family with diverse multimedia and gaming needs and a broadband internet connection. The need for internet, the lack of used or rented games, and the inability to lend and share discs all screw over the poor and the rural.
That's all fine and good. A company has every right to target one consumer base. But, when you are one of only two major brands in a product type with such a broad appeal, your marketing department's job is to make sure that, when targeting those people, you don't isolate and anger everyone else.
By the way, I am a Microsoft fan. I own a Zune. So if you're listening, Microsoft, the fact that I am upset means there are legions of the less loyal more upset than I am. And they are all just dying to see what the Playstation 4 has to offer.