So Just What WAS Microsoft Thinking?

I was at E3, and I had the opportunity to sit down and play with the console, and try out some cool new games on the hardware. When this happens for journalists, a lot of the time you are given the opportunity to be taken backstage into a secluded environment cut off from the rest of the noise. Typically, there are nice leather couches, a cute girl that will give you beverages of your choosing, and some nibbles. You’re handed a controller, and then taken through a typically scripted sequence of events in a new game. Afterward is usually the time to answer any specific questions you may have. The thing is, when you sit and play these games, there’s definitely some down time that gets filled with banter or just regular conversation. I can’t count how many times I’ve been at E3 playing a game, and started shooting the breeze with a developer about things that were almost completely unrelated to games. Most of the time the conversations steer toward food, and I’m more than happy to share my knowledge of Los Angeles’ best eats and treats, even though I can count on one hand how many people have actually listened to me.

This year, however, the conversations were a little different. Things seemed more structured, and more formal, and people had their PR deflector shields up. Even the usual casual conversations about tacos seemed more guarded. Folks just weren’t falling for it this year. This meant trouble for my ability to get a decent story. I wasn’t going to be undone, and have my amazing journalistic talents go to waste. I needed to wear these people down, and find out what they were all so damn tight lipped about. It finally began happening in one of the three demonstrations I participated in at the Activision booth. I never reveal sources, and rarely do I write scoops because of that, so you can feel free to take all this as you like. Also keep in mind this was before Microsoft had formally announced that they were reversing their stance on used games. So these conversations may have been influenced by what everyone believed was the situation at the time.

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While playing a demo at the Activision booth (I say booth, but mean behemoth mini-building), I started asking about the possibility of evolving ecosystems within the framework of the next console cycle in a way that was actually beneficial to developers. I saw the dev take a deep breath, and then politely tell me…

“Well Microsoft has some cool stuff going on.”

Really?

“All I can say is that we are really genuinely excited about the Xbox One.”

I pressed for more answers, but it was clear this was as much as I was getting from this particular individual, and got ready to move on. I then heard him shout out to me as I walked through the door…

“Think ‘Steam’!”

So I thought about Steam. Steam locomotives, steam baths, steaming vegetables. Steam everything. I should have connected the dots sooner that he meant the digital distribution platform that has absolutely taken over the PC gaming market. “Think Steam…”, I repeated the phrase in my mind. I did. I thought about Steam a lot. I thought about why Steam, which is essentially DRM, has been so thoroughly accepted if not now embraced by the PC gaming community, but something like Xbox Live is met with derision for trying to iterate in more digital dependency. In fact, if anything PC gaming faces more hurdles to overcome when dealing with its consumer base. The perception of PC gaming may be changing slightly as time continues to march on, but most people see PC gaming as an expensive hobby with packed in obsolescence that will render their systems useless as games continue to require more and more horsepower to play their games at comfortable framerates. Is this all true? There may be a grain of truth to the whole idea, but on the larger scale, no. Absolutely not. Keeping in mind that most computers are still…computers…at the end of the day has a lot to factor into the price/performance ratio, and honestly the endless debate of “Is a PC better than a console?” is sort of pointless. A PC can play great games at insane resolutions and framerates that consoles are not capable of if equipped correctly, but they’re also tools that can run essential software that you need to go to school, make music, surf the web, watch movie, or download lots and lots of questionable AVI files that you would rather your girlfriend or boyfriend not see.

This alone differentiates the ecosystems enough to where comparison starts falling apart. Simply put, consoles are simpler, and better at giving you a streamlined approach to gaming. Plug in, turn on, and play. Still against all odds, Valve has created a behemoth with the digital distribution platform Steam.

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I spoke to a senior producer with a major studio that has been very hands on with Xbox One, and tried to get a sense of how their studio is adapting to the proposed changes.

“We’re really invested in Microsoft. We like the Xbox One, we like the power, and to be honest we like the way that Microsoft wants to handle the sales business from here on out.”

“So does everyone have it kind of wrong, or have the wrong idea?” I asked.

“I think maybe they do. On the one hand, like as developers, we get it. Some people can’t play our games. And this is something that we deal with in lots of ways as we’ve developed some very powerful games in the past that have been primarily PC. That makes things hard. Then you start adding in things like Multiplayer, massive patches, and other things, and it can be enough to where you ask yourself ‘how big is this market, and is it enough to sustain the product?’”

“The answer isn’t always yes is it?”

“So has working with Microsoft built on that pedigree of PC experience?” I pondered.

His response was pretty blunt and surprising.

“Not really. They’re very open, and adamant that these are two different worlds. What works on one, may not work on the other, but they’ve definitely been watching the digital distribution space closely.”

I sensed that our conversation was beginning to reach a milestone, and pushed just a little more…

“So are they consciously trying to be more like Steam? Because someone else literally shouted at me ‘Think Steam!’ when I asked them similar questions.”

I got a nod of acknowledgment.

“Care to go into more detail?” I asked.

“I mean, so everyone is tired of paying $60 for a game, and as a studio that makes Triple A stuff, I can safely tell you that we make way more money from our digital sales, than our physical. Steam is really awesome in that regard. So Microsoft wants a system like that. They want to eliminate overhead, they want SKUs to cost less, and they want people to get used to the idea of buying their games online. For a lot of people, that’s already the case.”

“Good guy Microsoft?” I jokingly asked.

“Not even. Put more money into the hands of the devs, and they’re going to want to make fewer games for the other guy… and it’s a broad swipe at GameStop. Yeah GameStop sells a lot of product, but the perception of them in the industry…..” he hesitated.

“It isn’t great.” I finished.

“No. No it isn’t. So that’s sort of where it all is right now.”

It was at that point that he asked if our entire conversation was off the record. While a story like this is just too delicious to pass up, I did guarantee his anonymity, and thanked him for his candidness. He seemed happy with this, and we continued to play his studio’s new game. I gripped the new braided thumbsticks on the sleek Xbox One controller, and smashed through the demonstration pretty quickly. I thanked my new friend again for his time, and made my way to my next meeting. Along my path to journalism I ran into some colleagues from another site.

“Did you see the Xbox stuff yet?” one of them asked.

Yeah I did. I replied.

Derisively he asked… “Man, what the fuck are those guys thinking?”

I grinned and said… “They’re thinking about the future.”

There was a detectable look of surprise on their faces that held almost as long as my smile as I headed to my next meeting.

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Xbox One may have a whole lot of public perception problems, but this may be the one instance where we’ve lambasted something without giving the devil his dues first. Xbox One may be suggesting a completely radical way of doing business, and handling sales, but it isn’t a strategy crafted out of audacity and stupidity as the internet so firmly believes. If anything I personally hope that Microsoft sticks to their guns and delivers a compelling alternative to traditional distribution channels. By assuming most of the heavy loading, and giving the sales power back to the developers for the first time in ages, they just might be more cutting edge than any of us give them credit for. Or it could end up being the biggest mistake the Windows 8 maker has ever made.

In either case, their success or failure will teach this industry more in a year than we may have known in a decade. While I personally don’t care which side of success Microsoft ends up on, I applaud them for their renewed commitment to thinking outside of the box, or rather, thinking outside of the Xbox, and will be anxiously watching how this all unfolds for the behemoth company