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Under PS4 Pressure, Xbox Adjusts Two Key Strategies

by David Mercer | 5月 13, 2014

Xbox made two key announcements today which should help the Xbox One recover from a slow start relative to Sony’s PS4. First, it will offer a new SKU by unbundling Kinect and offering the standalone Xbox One console at $399.  Second it will make entertainment apps like Netflix available without the need for the paid-for Live Gold subscription. These moves will be introduced in all Xbox international markets on June 9th. According to Xbox, “executives have taken customer feedback very much to heart” and recognise that these changes represent “significant business decisions”.

These are two important steps which could be characterised as the removal of two of the lynchpins of Microsoft’s previous strategies. Xbox has pioneered advanced user experience over the past few years with the Kinect technology.  While it admits that Kinect does not always work well with everybody, It had clearly hoped that its appeal was now wide enough that bundling it as standard with the Xbox One console would not prove an obstacle to beating its main rival, Sony’s PS4. That assumption proved wrong and Xbox is now putting it right.

It’s worth considering how Kinect could have been improved. Our own recent research (Xbox One: The Rise of the 'Media' Console) found positive feedback on many of Kinect’s capabilities, especially the TV guide voice and gesture controls. At the same time, as Xbox management confirmed to me today, the company recognises that it has not made as much progress in providing must-have Kinect-based game content as it would have liked. It is perhaps this element above all which frustrates potential Xbox One users who reason that they shouldn’t be asked to pay for something which is used relatively seldom by developers.

In my view the other strategic change could be equally important. Microsoft took the important decision in the days of the original Xbox console to charge for online capabilities, in contrast to its main console rivals. While this may make sense for many gameplay functions, it has always seemed to be pushing things a bit far to keep non-game apps and services behind this paywall. Opening up Netflix and Sky to more casual users should help broaden the appeal of Xbox One still further.

David Mercer

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