The Microsoft 180: Business as Usualcomments powered by Disqus
Posted on Tuesday, July 1 2014 @ 11:58:22 Eastern
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When Microsoft announced its new “Kinect-less” Xbox One offering, the debate over the “Microsoft 180” was reignited. As I read the comments for and against this business move, I couldn’t help but feel that a great deal of people either forgot how multi-billion dollar business decisions are made or were simply unaware. Specifically, it is a “team” of people with varying opinions and ideas who determine the best way to proceed. What people seem not to acknowledge in the current discourse is that there were probably members of that team who felt just as the consumers felt (anti-Kinect, anti-DRM, anti-no used games, etc…), but in making decisions as a group you must concede at times for the sake of what is deemed in the best interest of the majority (at the time…). So, it really isn’t a 180 in the classic sense for all involved.
Aside from the dichotomous view that they either go with their originally planned course of action or are simply back-pedaling and reneging on original promises, I would remind you of something we are all familiar with: “The contingency plan." When you head off into an multi-billion dollar endeavor, you do not simply plot a single course of action but rather you create contingent strategies as you can’t predict with 100% accuracy the reception of your product in real-world markets due to all of the variables. The “Microsoft 180” discourse seems to completely overlook this key facet of business planning. I would argue that Microsoft never actually did “a 180” but rather based on real-world feedback modified their business plan to position themselves to make a viable profit off the product they are offering.
It’s easy to simplify the nature of this concept and say that they are back-pedaling or that Sony has done everything right, but neither point is entirely accurate. If we step away from console wars of Microsoft vs Sony (Nintendo… intentionally omitted at this point) and look at them simply as businesses offering a product, then we can start to get away from applying the characteristics of an “individual” to a multi-billion dollar corporation with hundreds of employees who jointly determine business actions.
From my perspective, I see that a team of Microsoft employees came to the decision that, based on feedback on the Xbox 360, the initial product offering for the Xbox One should look like “x” (always on, Kinect-required, no used-game playability, etc…). Absolutely nothing was wrong with this course of action and at the time it was deemed by those involved as quite reasonable. Once the product was introduced to the market, consumer feedback was received and the model was tweaked to address consumer demands. Microsoft is still doing what it is supposed to and consumers are as well. This isn’t a 180 in my perspective—just business as usual.
Now you have a third character in the mix which is Sony. Aside from consumer feedback on your product, you have to review the performance of your competitors as well and adjust your business model accordingly. I reiterate that this is a multi-billion dollar business plan. The plan that you remain consistent to retain the perception of being steadfast in your business choices is offset by the reality of the gravity of the business decision. If you are losing money and believe this business plan to be of a ten-year nature (long-term/console life, then you understand that you vary and tweak your business strategy the most on the front end until you stabilize hopefully in Year 1 or 2 but even Year 3 (See the PS3), so that you have 7-8 years to demonstrate how steadfast your “final” business plan is.
I honestly think the PS4 and Xbox One are still both in a good market position. Numbers are currently down for Microsoft much like the initial run for Sony last-gen, but there is plenty of time to reposition and retain a competitive stance in the current market. The “Kinect-less” offering with a price point consistent with your most significant competitor is a step in the right direction.
So, before you get all huffy-puffy about your favorite or most hated company doing a 180, don’t forget what’s on the line and also the fundamentals of how these decisions are being made… by groups of people (some of which I so want to believe are avid gamers). I would much rather a “180” if that’s what you want to call it than seeing a huge market competitor fall to the wayside to retain short-term perception of being steadfast in their beliefs. It’s not like we have seen a lot hardware competitors enter the market in recent years only to fall to the wayside unable to secure a significant enough market share to prosper? I wonder if dynamically and promptly addressing your consumer demands leads to that solid footing Microsoft currently has…
The opinions expressed here do not necessarily reflect the views of GameRevolution, but we believe it's worthy of being featured on our site. This article, posted earlier in May 21, has been lightly edited for grammar and image inclusion. You can find more Vox Pop articles here. ~Ed. Nick Tan