Jesse Schell on Xbox One DRM About-Turn: “Microsoft Made a Mistake Listening to its Customers”

“This is the lesson of the innovator’s dilemma.”

Posted By | On 05th, Aug. 2013 Under News

xbox one controller
Speaking at the Gamelab Conference in Barcelona, Schell Games founder and designer Jesse Schell recently spoke about the about-turn that Microsoft took in regards to its Xbox One DRM.

For those who have been in a coma in the past three months, Microsoft recently introduced a new system for the Xbox One which meant it had to authenticate every 24 hours online, would be region locked and include a restriction on used games. After a fair amount of outcry, Microsoft ditched it. All of it.

“Your customers want you to stay the same, even if it drives you into the ground. Somehow, Microsoft didn’t seem to think that would be a reality, or even a problem. The reality is that they can’t do what the customers want. Basically, Microsoft said, ‘We’re going to be Steam. You like Steam, don’t you?’ And we all said, ‘No, we hate that. We hate you. You’re an idiot to do that.’

“They came out and said, ‘We’re gonna do this new thing.’ And the customers said, ‘No, we don’t want that, we hate that’ – even though it’s what they really want and what they will ultimately buy. So now Microsoft has had to say they won’t do all that stuff, but someone will.

“That’s how it always goes. This is the lesson of the innovator’s dilemma. Why is it that big companies fail when the technology changes? It happens in every industry, so what’s the pattern? What are they all doing wrong? Everyone says, ‘Oh, it’s because they’re stupid. Big companies are stupid.’ They can’t be stupid. How did they get that big and stay that big if they’re stupid? Microsoft isn’t stupid.

“There’s one mistake that they all make, and that mistake is listening to their customers.”

Will that impact the overall success of the console as the world moves closer and closer to digital distribution? We’ll find out in the coming months.


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  • original2k

    I had to look up Schell Games to figure who this person was, and I still don’t understand the relevance but anyways, who’s he to say that they made the wrong decision? From a pure PR standpoint Microsofts DRM was suicide…. And people weren’t saying “we hate Steam” nor their policies, that is an inaccurate statement. It’s apples and oranges, DRM works on steam because digital distribution has been truly embraced in the PC market, the vision of leaving out the manufacturer and passing the savings down to the customer is real (summer sale anyone?). I mean look at digital copies on XBL now, Microsoft charges MSRP for games you can buy half price at retail. Bring the prices down and people will accept DRM something m$ isn’t willing to do.

    • Ahmazin

      Completely agree. Stream works because it’s a win-win situation. Microsoft wanted to take benefits away from consumers, while not giving much to compensate for losing those benefits.

    • Chris McQueen

      well sony tried it too, they originally had the same pilicies as Xbox One, as well as a $500 price tag with the PS eye but after the Microsoft event they changed it all to get the upper hand. Smart but now people think Microsoft is the bad one when they’ve both essentially done the same thing.

    • Ahmazin

      Sorry, but that is simply untrue. There are no legitimate sources out there that back your statement. Yet I can point you to articles before E3 that talked about Sony never considering it. The ONLY thing Sony implemented is the ability for the publisher to do so if they chose.

      This article is dated February. Sony DID NOT change their policy at E3… I was surprised when Microsoft went through with it. It shocked me because Sony had already said they wouldn’t.

      Do some research and you’ll find more articles just like it. Sorry to disappoint you, but Microsoft made the choice all on their own.

    • Chris McQueen,23292.html Perhaps you should do some research before complaining about me doing some research. A quick Google search gives numerous results backing my statements.

    • Ahmazin

      Actually, I didn’t say you didn’t do any research, I said if you did some research, you’d find more articles like the one I linked, but kudos on the Tom’s Hardware article. Makes me wonder how Sony was going to implement DRM with a system that didn’t require always online.

      I stand corrected. We’re cool, no hard feelings, at least on my behalf.

    • Mike E. Delta

      Actually, what you’re doing is inferring a statement which is a bit different from the statement he was making…”A is A.” ~The Question. =p

  • xbman

    You can’t judge what will happen with what’s going on now and if you pay attention Microsoft was asked if they would cheapen prices with DRM digital and they said they wanted to be aggressive with pricing since no revenue would be lost. Just check out there new sales they did I picked AC3 for 15 dollars most games were 50 to 75% off but if you want real price drops used games need to die. Unless they were going to do what Microsoft wanted which was digital trade so developers get revenue from used content.

    • original2k

      very true and not to be disregarded, they have taken babysteps in trying to compete with PSN (sorry Sony has set the standard for giving back to it’s player community for years). Microsoft’s recent response has been completely reactive though, to put it simply, gamers are weary of microsoft’s “new initiative”. let’s not forget, you still have to pay them to play games online (which the PS4 will convert to as well) however you still need XBL gold to use paid services like Netflix/Hulu/etc. these practices make it hard to entice a scorned gamer community

    • Mike E. Delta

      I think the more appropriate term is “leery” rather than weary…the weariness is in regards to something already done, the new stuff makes people leery, since it is untrustworthy..? =[

  • Aniky

    It was a PR disaster. Did they say they’ll do sell like Steam? No. They didn’t address it at E3 in which it was a good opportunity.


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