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.

(Source)