Neowin

Microsoft's recent Xbox One digital rights management announcements resulted in a significant backlash from the gaming community, and it seems at least one analyst firm now thinks the DRM strategy also puts the entire Xbox division at risk.

According to MCV, DFC Intelligence's "Forecasts for the Video Games Market" report states the firm believes Microsoft's strategy for its upcoming console is "deeply flawed" and will likely result in lower expectations for Microsoft when the firm announces its console predictions in August. Conversely, DFC expects to raise its PlayStation 4 sales predictions as a direct result of Microsoft's DRM requirements and overall strategy.

"So far this has not had a major negative impact on the Xbox business, but that is likely to change with the Xbox One launch," said David Cole, owner of DFC Intelligence. "Right now the entire future of Microsoft's consumer entertainment business is in question and that is likely to have a major impact on the game industry."

In a recent blog post, the firm lamented the fact that Microsoft failed to address its DRM requirements at its E3 press conference last week and revealed a retail price of $499, which it said is "too high." The blog post noted that when Sony announced the entry-level $499 price of the PlayStation 3, DFC speculated Sony would go "from first to worst" in console generations. By comparison, Microsoft's Xbox 360 had an entry-level price of $299 when it was first released.

"We completely understand that the Xbox One is bringing a big leap forward in how people interact with their living room entertainment," the post states. "We grant that high-end first adopters will not be a hard sell for the Xbox One. What we question is whether the mass-market consumer will pony up for this console."

The post went on to address the DRM requirements, asking what will happen "when the inevitable server glitches arise" and the Xbox Live servers are unable to authenticate users for the mandatory Internet check that occurs once every 24 hours in order to play games. Microsoft's Xbox Live servers notably suffered an 11-day outage at the end of 2007, though no major outage has impacted the service since

MS is Domed! (Har Har Har)

Once MS starts advertising we will see plenty of casuals and core gamers readying for launch,kinect had a 500 milion dollars ad campaign how much would MS be willing to spend on a brand new console?1 bilion-1.5 billion ?

No it's not, not even close.

Can we please at least wait a year after Xbox One launch to write it off.

It will do great numbers in US and UK.

I agree its too early to jump to conclusions but other than those 2 countries I cant really see it being a big success.

New Microsoft HQ?

The console will sell out at launch, sell slowly Spring and Summer and take off when it drops to $399 and Halo is released next fall. No worries

I immediatly call into question this analyst when he states that Sony initially announced the PS3 at $499.  Sony introduced the PS3 at $599 and then because of the backlash later announced a unit for $499 that was only made in very limited quantities.

MS IS DOOMED

Exactly WHAT message is Microsoft going to broadcast that will get millions enthused for a console that is less powerful than a rival, who is selling theirs for $100 less?

I would like to know what this message is.