Microsoft Reloads, Fires Another Crippling Shot at Its Own Xbox One

Microsoft (NASDAQ: MSFT  ) can't seem to make up its mind about this holiday season's Xbox One release. Should Redmond focus on making the console a big hit with sales to overshadow the contemporary Sony (NYSE: SNE  ) PlayStation 4? Or should the thing be designed for maximum profit per unit, high-volume sales be damned?

The tactical errors that would seem to hold the Xbox back include a $100 higher price than the PS4 and some draconian limits on what customers will be able to do with their purchased games. On the other hand, Microsoft quickly backed down from some of its least consumer-friendly content controls and the company is taking a surprising supply chain lead over Sony as well. So maybe all is not lost after all.

Microsoft wants to organize your entire media world, but you have to pay before you play. Image source: Microsoft's Xbox.com.

And that's where Microsoft throws us for another hairpin loop.

The Xbox One is designed to be the media hub of your living room. Beyond just playing games, the console offers easy and high-quality access to media services like Netflix and Hulu videos, Skype video calls, an NFL video package, and even the OneGuide portal for viewing live and recorded TV content on the 'box. The system also records the last five minutes of your gaming on a rolling basis so you can relive or even share your favorite moments later.

But all of these premium features require an Xbox Live Gold subscription. That's another $5 a month or $60 a year on top of the monthly fees for each individual service, as appropriate.

By contrast, the PS4 will match most of these features for free. There's still a "plus" subscription available for certain features like online multiplayer gaming on the PS4, but you don't have to send Sony a check just to enjoy Netflix on your console -- or to share your recorded gameplay videos.

Sure, many Xbox 360 users have already been conditioned to accept the Live Gold subscription in order to use the console as a media center. But it's not a popular requirement. Anecdotally, I've seen friends of mine dump their Gold accounts and buy a separate Roku or an Apple TV box to handle their Netflix and Hulu duties -- cutting Microsoft out of the loop.

That's enough to convince me that Microsoft will indeed lose some sales to this heavy-handed monetizing move. Why would Joe Consumer pay a premium for the Xbox itself and then another $60 a year just to do what Sony offers at a big discount?

If Microsoft really wants its new console to become the beating heart of America's living rooms, the company would be wise to knock down these silly roadblocks. The Xbox line is one of Microsoft's last success stories in an age of Windows 8 backlash, toothless smartphone sales, and plummeting web browser market share.

Why Microsoft puts some of the Xbox One's core features behind a paywall is beyond me. If you can explain this move, feel free to do so in the comments box below.

The future of television begins now... with an all-out $2.2 trillion media war that pits cable companies against technology giants.  Microsoft and Sony are pitching their consoles into the thick of this revolution, and the stakes are incredibly high. The Motley Fool's shocking video presentation reveals the secret Steve Jobs took to his grave, and explains why the only real winners are these three lesser-known power players that film your favorite shows. Click here to watch today!


Read/Post Comments (7) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 08, 2013, at 11:27 PM, nanarchy wrote:

    So what is this new crippling shot they fired? all the article did was rehash old know information. If anything MS are better positioned in TV and media this round as Sony are pushing stuff behind their paywall too. If you buy either console, chances are you will need the plus/gold package. I gather this article was just click bait?

  • Report this Comment On August 09, 2013, at 2:37 AM, Clint35 wrote:

    My only explanation is that they're idiots. Or maybe it's just Ballmer and everyone else is just stepping in line with him.

  • Report this Comment On August 09, 2013, at 6:40 AM, TMFZahrim wrote:

    Nanarchy, the news here is how much of the Xbox One's core functionality that's lurking behind that paywall. Microsoft released the Live Gold feature list this week; before that, you could only speculate how badly Redmond wanted to cripple its star system. And if you follow my links, you'll see that Sony's paywall covers much less content than Microsoft's. So there's that.

    Anders

  • Report this Comment On August 09, 2013, at 10:22 AM, stockwoodie wrote:

    I've been beginning to wonder why I'm paying for Xbox Live Gold. I've been a member for at least 5 years now and I don't feel like it's deserved. The only reason I have Live is because I play FPS online with my friends, but since having a baby, I've had less time to do so. Other than that, I can watch my Hulu Plus & Amazon Prime through my laptop that is always connected to my TV via HDMI. From what I've seen, MSFT is getting GREEDY and needs to step back. $499 for a Surface RT at release date for a "new", "unproved" piece of hardware with few apps. Office ribbon which A LOT of people complained about. It's not a good thing to shove a P.O.S. product down the consumers throat just because. I realize the ribbon works "well" with a touchscreen, but it's a terrible interface for those of use that actually do work. Which leads me to Kinect. I DON'T want a Kinect for $100. I had the last model and I ended up never using it. Don't shove this down my throat too. No Thanks. I've been a MSFT fanboy for a long time, but they are losing my as a customer. I actually purchased my FIRST "i" product this year because I'm getting fed up with MSFT's antics.

  • Report this Comment On August 09, 2013, at 10:25 AM, ThatTechNerd wrote:

    Way to click bait! This article is a rehash of old info + really old info. The PS+ vs XBL conflict has been around for years now & everyone knows that the pay wall for Xbox is bigger, that's now news. Also what the shot that was fired??? Everything you talked about has been knows since a week after E3.

    Also the Xbox One will win in the end, all core gamers only care about game, even if they act like they don't. The Xbox has way more iconic franchises which will bring up sales greatly when the next Halo, Gears of War & such come out. Also Microsoft doesn't care about being #1 at everything they do, their Windows 8 era business model make it so they can be #2 or 3 in everything they do & still beat earnings. Ballmer's a genius when it comes to business models.

  • Report this Comment On August 09, 2013, at 5:37 PM, kspider wrote:

    I could care less about the media failures of any product prior to the actual finished product. None of what Microsoft is doing price-wise should surprise anyone who has been faithful to the Xbox. BOTH the Xbox One and PS4 are expensive systems period. If you're a gamer you've set aside funds to make sure this holiday season you are playing the next gen system of your choice regardless of how much it is. The bottom line is games. If the games suck, I'll be right there with the fan base, bitching and playing old 360 games until something comes out I'm interested in. But right now I'm excited for new tech, better graphics, longer more emersive games, and new IP's.

  • Report this Comment On October 16, 2013, at 3:15 PM, yesurbius wrote:

    Our family has two PS3s in our house. I was prepared to go XBox this time around because I really felt like the best game experiences between PS3 and XBox360 were on the 360. That being said - given the PS4 sellout, the back-and-forthness of Microsoft's policies .. I think I'll be going PS4. For me, there were two large nails in the coffin. The first was that Microsoft was disabling access to Skype and Netflix unless you had an XBox Live subscription. This blows my mind - I have them both for free now - why would I pay for an XBox Live subscription to use them? I hate playing online - nothing but a bunch of idiot griefers - so why would I buy XBox Live? The second nail in the coffin was the fact that Microsoft is desparately trying to push Windows 8, Surface, and Windows Phone down our throats .. and the reason we're not biting is because the software sucks .. XBox One is just another piece of Microsoft's masterful plan ..

    Also - if you look at Microsoft Windows releases - you always upgrade every other release .. because Microsoft has this habit of trying new things ... spoiling it .. then fixing it .. then screwing it up again .. then fixing it .. and so forth. So by that mentality - XBox360 was good . XBox One will suck.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2587350, ~/Articles/ArticleHandler.aspx, 9/20/2014 4:24:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement