Schell: Microsoft should have held its nerve on Xbox One

Innovators mustn't bow to pressure, dev claims

Microsoft's submissiveness in the face of public outcry over Xbox One policies was a mistake, according to a prominent and respected games developer.

Jesse Schell, games designer and professor at Carnegie Mellon University's Entertainment Technology Center, believes a firm nerve is necessary in order to reinvent established businesses.

"Your customers want you to stay the same, even if it drives you into the ground," Schell told GamesIndustry International.

"The reality is that companies can't do what the customers want," he said, in reference to Microsoft's extraordinary volte-face on Xbox One's pre-owned and always-online policies.

"Basically, Microsoft said 'we're going to be Steam. You like Steam, don't you?' They 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.

"The problem is that the hardcore folks always want the same thing: 'We want exactly what you gave us before, but it has to be completely different.' When you want to do something really different - the solution to the innovator's dilemma - you can't take your big brand and say it's going to be completely different."

Xbox One pre-orders are said to be roughly double that of the Xbox 360 at launch, according to Ubisoft chief executive Yves Guillemot. The same is said for Sony's PS4, a demand that has led to PlayStation Europe capping its guaranteed launch day pre-orders.

Nevertheless, Schell believes the growing and diversifying competition to games consoles will have a noticeable effect on their market share.

"E3 convinced me that they are going to be struggling," he said.

"I haven't seen anything that made me think, yeah, you're gonna get that market share back. I'm convinced that all [of the consoles] are going to have a gradually eroding market share over the coming years. Because tablets are going to be eating their lunch more and more, and other platforms are going to start to take off and catch fire."