Xbox One and its three strategic options: A case study
How will Microsoft reexamine the Xbox One product features?
a. The Xbox One “all in one” functionality positioned it as an ultimate digital entertainment hub, creating a “new living room” experience for users (Roese and Meagher 5). It allows users to switch seamlessly and quickly between PC games, cable television, streamed movies, and VOIP services, while screen splitting between sources for multiple players.
b. The next generation Kinect device, a motion-sensing peripheral that allowed users to interact with the Xbox 360 through voice commands and gesture, was further upgraded to recognize the users physically and automatically update the interface based on personal preferences (Roese and Meagher 6). It also offered content adapted to the users’ viewing habits as recorded in their profiles.
c. The gaming selection of Xbox One contains hardcore PC games segment, such as the first-person shooter games, the sports games, and the racing games (Roese and Meagher 6). It also contained child-friendly games and other games suited for casual PC gamers.
Barrier #1: The ultimate digital entertainment hub promise was significantly compromised by the negative perceptions over the potential adoption of an “always-on” digital rights management (DRM) policy, which had brought negative experience with Maxis’ SimCity server overload disaster in 2013 (Roese and Meagher 5).
Barrier #2: The used game aspect in the Xbox One policy remained vague to PC gamers as announced publicly (Roese and Meagher 6).
Barrier #3: The game sharing policy between multiple household computers are also vague in public communications (Roese and Meagher 6).
Recommendation #1: Microsoft must reexamine its Xbox One features for maximum marketing value in relation to PC gamers’ concerns, which can be clearly communicated.
Recommendation #2: Microsoft must identify the most positive and convincing aspects of each Xbox One feature so that forthright communication with PC gamers can be done.
Recommendation #3: Microsoft must defer holding public communications in the absence of clear and definite information on each Xbox One feature that PC gamers find valuable to learn about.
Strategic challenge #2
How will Microsoft communicate the Xbox One features to its various consumer segments?
a. On May 21, 2013, Microsoft announced the “all-in-one” functionality of the Xbox One console, promising a seamless switching between PC games, cable television, streamed movies, and VOIP services. It can even split the display screen between sources for multiple players. It also positioned Xbox One as a digital entertainment hub, consistent with its aspirations to be the “center of the digital home” (Roese and Meagher 5).
b. On that same press event, Microsoft also introduced its next generation Kinect device, which had been upgraded to recognize the users physically and automatically update the interface based on personal preferences while offering user-adapted content offerings (Roese and Meagher 6).
c. The press event also demonstrated the “all-in-one” capability and showcased its gaming selection targeting the hardcore PC gamer segment, such as first-person shooter games, sports games, and racing games (Roese and Meagher 6). However, it skipped on the child-friendly and the casual games while announcing the serialization of Xbox’s flagship Halo game series in television with Steven Spielberg as producer.
Barrier #1: Microsoft announcements on the Xbox One policies had never been forthright, which conditioned the minds of PC gamers with negative speculations while making it more difficult for the company to be more forthright later on without causing more rounds of suspicion. The announcement on used games, for instance, should have contained a selection of positive specifics that will leave good impressions among PC gamers.
Barrier #2: Microsoft communications failed to connect excellent features of Xbox One with its “always-on” DRM policy, which made the features disconnected from the holistic message that should reach the target audiences.
Barrier #3: The overall message of the current Microsoft communication policy centers on the company’s failure to finalize certain aspects of the Xbox features and use policies, which leave PC gamers unsatisfied due to multiple gaps of information provided on matters important to them.
Recommendation #1: Microsoft must be more forthright in its public announcement nevertheless to clear up suspicions and negative speculations. In these announcements, it must emphasize Xbox One features that necessitate an “always-on” condition, such as the seamless background installation of game upgrades (Roese and Meagher 6). This is the most integrated approach in handling communications for Xbox One via its features.
Recommendation #2: Practically, there should be no other option to handling the communication for Xbox One because other options that will not emphasize and support the “always-on” DRM policy will not help correct negative mindsets on this policy. However, a full disclosure of all distinctive features of Xbox One will emphasize its special capabilities while not necessarily associating it with the “always-on” policy. It is a more indirect and subtle approach, which hopes that PC gamers will intuitively connect it to the benefits of an “always-on” DRM.
Recommendation #3: Selective disclosures of Xbox One features in communications can emphasize relevant features to specific audiences than full-feature disclosure policy. However, this requires accurate feature choices that will most effectively engage various segments of PC gamers.
Strategic challenge #3
How will Microsoft communicate the Xbox One digital rights management (DRM) policies to its various consumer segments?
a. Towards the release of the eight console generation, the use of digital rights DRM became increasingly controversial in PC gaming as the interests of the game producers conflicted with that of the PC gamers. While protection of intellectual property is logically preferable to manufacturers, the restriction on sharing games is always resisted by PC gamers (Roese and Meagher 4).
b. The “limited install activations” DRM provision, which limits the number of devices onto which a purchaser could install a game, was adopted in 2008 by Maxis, the maker of the Sims franchise, when it released its Spore game with SecuROM DRM technology. The Maxis Spore DRM allowed the installation of the game on a maximum of three computers but required PC gamers to have their copies authorized every 10 days. PC gamers felt the repetitive authorization as “onerous and overly restrictive”, opting instead to pirate the game (Roese and Meagher 4). Then at least 90 percent of PC gamers gave it a rating of one star out of five.
c. The “persistent online authentication” (or “always-on”) DRM provision is a newer form, which required users to maintain Internet connection to play a game. Maxis initiated this DRM feature in 2012 for its SimCity reboot for 2013 (Roese and Meagher 4). Although met with resistance during launch, it ended up selling very well. Microsoft’s Xbox generations are also using this provision.
Barrier #1: The Maxis SimCity performance with its “always-on” DRM policy had resulted to an overload of its servers, which ended up preventing PC gamers who purchased it from playing the game for “extended periods of time” (Roese and Meagher 5). This experience negatively conditioned the minds of PC gamers on the disasters associated with the “always-own” DRM policy.
Barrier #2: Competitor Sony had announced that its Playstation 4 would not be using the “always-on” DRM provision, setting up the possibility that this option can be pursued in favor of PC gaming experience (Roese and Meagher 5).
Barrier #3: Microsoft was not being candid and forthright in their plan to use the “always-on” DRM provision in its eight generation Xbox One, causing negative apprehensions and speculations among PC gamers (Roese and Meagher 5). Moreover, an unofficial revelation from its employee Adam Orth negatively stirred the environment with hostility against PC gamers.
Recommendation #1: Microsoft must provide a forthright but convincingly meaningful communication policy in relation to its “always-on” DRM provision. Meaningful means emphasizing Xbox One features that make the “always-on” policy a necessity, such as the seamless background installation of game updates. Focused and integrated communication will send a more solid message that can impact positively on PC gamers’ perceptions on the policy.
Recommendation #2: Forthright and full disclosure of features and its DRM provisions may deemphasize the “always on” policy through sheer volume of messages provided, distracting PC gamers from thinking so much on the policy.
Recommendation #3: De-emphasis on the “always-on” DRM policy while being more candid on the exciting features of Xbox One can emphasize the more positive aspects of the product and away from the controversial policy.
References
Roese, N.J. & Meagher, E. (2014). Xbox One. Kellogg Case Publishing. PDF file.
