When Microsoft began developing the XBox One game console they anticipated the sale of seven million units. By August, they were starting to reduce the number of shipments they were sending out. By September, the XBox One’s primary competition, the PS4, was dominating the pre-orders and initial polls. XBox one has a reputation problem, and has nearly since the day that the console was announced.
What can you learn from Microsoft’s failuers?
Be Clear About Who Your Company Serves
PS4 is clear about who they serve: gamers (or, in more formal terms, end users). Their entire corporate message is behind that single concept. The way that they present their games, their console, and their advertising all supports that idea. XBox One is less clear. Gamers seemed to be secondary to serving monolithic games companies, advertisers, and Microsoft itself.
One of the early problems revolved around how Microsoft would handle friends who wanted to share games with one another. In short: it wouldn’t be possible—each friend would have to buy a copy of the game at full retail price. PS4 was quick to lampoon the proposal in a hilarious video that immediately went viral, further sealing the fate of the XBox One. In fact, XBox One came out later with a complete 180, revising nearly all of the policies that they had proposed for the new console.
Another concern revolved around privacy, especially since the new console was meant to be tied so heavily into the Kinect (which has been compared to Big Brother’s in-home eyes from 1984) that a person could not access their console without plugging in the motion-activated camera/controller. Microsoft’s 180 covered the Kinect, too. But this lack of clarity has bitten the console yet again quite recently, after Microsoft gave an Advertising Age interview.
In the interview, they bragged that the XBox One could “give advertisers access to a huge new trove of data about what’s going on in living rooms.” Microsoft’s protests that they had no plans to sell data to advertisers came too little, too late—and all because the company is just not sure who their customer is.
Ask Who You Are Driving Away
Some companies work hard to actively drive customers away. Microsoft decided to join those ranks on the day that one of its representatives made a rape joke while unveiling the XBox One at an important gaming conference. Plenty of people won’t care. But many, many gamers (both male and female) did care. The subsequent apologies weren’t as loud as the original incident, and forgiveness isn’t fast enough to save sales figures. Many of these individuals were actively driven away from the culture that Microsoft displayed that day, and will remain loyal to Microsoft’s competitor, perhaps for years to come.
In the World of Online Reputations, there is No Such Thing as Too Big to Fail
Microsoft has gotten out of touch with its customers and is blundering its way through these reputation problems because it feels it is untouchable. It’s huge, it’s pervasive, and it’s everywhere. But the company is already seeing some massive drops in its stock prices. It has big competitors to worry about. And it’s not doing much to restore the trust that it has broken. Size doesn’t matter. If you’re doing business in today’s world then you have to be worried about your reputation.
All of the techniques and tips in the world won’t help you if you can’t avoid offending your supporters. In fact, the old adage will often prove to be true: the bigger you are, the harder you fall. It’s certainly proven to be true for the XBox One.