Microsoft’s Xbox One presentation at the E3 gaming trade show in LA on June 10 was a pivotal moment for the company. Less than a month earlier, when it unveiled the latest generation of its gaming console—on sale November 22—the response was cool. Its $499 price tag was partly to blame, but several new features left gamers confused and furious. The system had to be connected to the web at all times, it had to log into the company’s servers at least once a day, and harsh digital rights management restrictions would make it all but impossible to play used games.

E3 was a chance for Microsoft to address the blowback, but it doubled down, seemingly oblivious to the criticism. “It went over like a ton of bricks,” says David Riley, the executive director of market research firm the NPD Group.

Microsoft couldn’t afford to blow its living room momentum. More than 78 million Xbox 360 systems have sold worldwide, and as of last year more than half of online users were spending more time connecting to services like Netflix than they were gaming. So it makes sense that Microsoft is positioning the Xbox One as an all-in-one entertainment console. But as the Xbox itself turns eight this year, the competition has gotten, if not more powerful, cheaper. Digital media boxes like Apple TV and Roku start at $50, and game systems like Ouya cater to hardcore nerds for as little as $100.

But then, within weeks of E3, something weird happened: The Xbox team dropped the unpopular features. And rather than host an event, Microsoft took to social media to make sure its angriest fans knew first. “It’s really unheard of for a company to do that,” Riley says. “A lot of times it’s, ‘If you don’t like it, piss off.’ ”

With Xbox One, Microsoft may, for once, triumph over its own stubbornness. Shortly after the reversal the head of the Xbox team left, and Julie Larson-Green, the VP often credited with Windows 7’s success, stepped in. No doubt her first marching orders were, It’s never too late to say you’re sorry.

 

This article appeared in the November 2013 issue of Seattle Met.