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Am I the only one who actually agrees with what Strike Witch just posted?
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Well excluding the usual "it's the way of the future" talk, Microsoft's original plan happened for two reasons: 1. suggestions from publishers who are sick of losing money on second-hand sales and 2. they apparently heard that Sony was planning a similar program. If Sony had gone ahead with it and the publishers supported them, then Microsoft would have been left high and dry.
However, since Sony didn't take the risk of pursuing digital, always-online systems and DRM due to their shaky economic state, Microsoft ended up having to go it alone on a system that gamers aren't a fan of. See, if both companies had had gone through with the plan, it would probably have gone over as a sign of the times. Both sides would have explained their reasons, and stores like Gamestop and other retailers who exploit their pre-owned sales would have been forced back, which would probably have led to better games since publishers see more money they could then invest in developers.
Well, assuming more money equals better games, of course (it doesn't).
But, since Sony essentially pulled out of this strategy (probably because if it failed they'd lose money), Microsoft is put out there alone, and as everyone knows, Microsoft is an evil company who's out to steal your money and force unfair restrictions on you. So they faced a storm of criticism from unhappy gamers, and since Xbox is a system that relies not on exclusive, hardcore fans but instead on a large casual market of gamers who use it as a catch-all console, they couldn't risk the loss of sales.
Microsoft is, before anything else, a company that pragmatically follows money. They will happily drop unpopular systems and forget they existed if it is a means to profit. Rather than be stubborn like Sony was about the PS3 for a while, they knew that the One needed to scale back the whole system and just push on as a new iteration of the 360.
So what does this mean? Well, for better or worse, it means we aren't going towards a future of digital distribution this generation. Microsoft and Sony aren't taking risks, they're going to incorporate some new stuff, but not everything they wanted. In some cases (especially infrastructure: the One wouldn't have been able to work in certain countries yet due to Internet reasons), this is a good thing, it gives both companies space to grow into their plans instead of just jumping right in. On the other hand, it means that we're probably going to have the same issues we had this current gen: Developers folding, incredibly large target sales that can't be fulfilled, more reboots of old properties in desperate attempts to keep them alive, and more multiplayer facebook crap.
But hey, we survived the past generation. I'm cautiously optimistic.