MS simply pushed in way too many directions at the same time. That was their main flaw.
With Nintendo this past few gens it's been about changing the gameplay, making new content, and selling peripherals.
That's a pretty traditional approach. How can we sell more? How can we introduce new ideas that will help to sell more product? When you look at it that way, it's no different an approach than a laundry detergent company might question.

Sony, did the same, as all companies do. Except last gen they added Blu-ray into the mix. It's called ripple effect. The more ps3s you sell, the faster blu-ray adoption occurs, which helps other segments of the company. They also moved more towards digital and online, to help their media segment, and did some peripheral stuff like with 3d gaming about halfway through the gen. The same happened with dvd on ps2, and cd on ps1.

So here we have:
Nintendo: traditional approach
Sony: traditional approach backed by 1-2 cross-marketed products.

Microsoft on the other hand decided "hey, we want to have more online dominance. We want to build 300k servers, but that's going to cost us, so let's push it with the xboxOne". That's good business at that point. Then they said, "We also want to control the cloud-space, so let's make sure huge businesses start using it. We'll make Windows Azure mandatory for reselling at a business. That way Best Buy, Gamestop, and all other retailers will already be in our system".
Then they said, "we want to control the information space. Let's use the new kinect as a data-mining system that we can use to create customized ads. That's a huge market right now, and google is fucking us. This will be our way in".
Then they said, "let's help our phone and windows area, so let's make developing on xboxone for indies mandatory that they make it on the windows development system, rather than the xbox dev system, that way we can put all the xb1 apps on the phone, and vice-versa."
Then they said "hey, let's control the digital market. By using windows ids tied to the purchased software, we can put a leash on where the consumers go. By simply transferring ownerships to various platforms, we can influence what they buy next".
Then they said, "hey let's have cable boxes input directly into our system. That way we can track what people are watching. This will give us a leg up on statistics sytems like nielsen and we can firmly place ourselves in the stat trend market. Another 50m consoles blows anything nielsen has out of the water."
Then they said, "let's further this kinect technology. It has so many applications that it would be good if we could get the price down, by skyrocketing production we can bring that cost down, and market it to more things outside of the gaming environment, like medical, home security, physical training, etc"

Xboxone policies were the direct result of an insane amount of groupthink. Not one person stepped back from the picture and said, "yaknow...maybe this is too much". They took each idea, gave themselves a big pat on the back and prepared to make lots of money. Only problem is they forgot they actually need to sell them first.

MS took the traditional approach and tied it to virtually every other sector they could without considering the number one most important factor. The gamers.

Seriously, think about what the gamers wanted. They want the games...right? So why all the unnecessary shit? Some people right now (including myself) think that the xboxone lineup is fantastic. It is. But what's standing in the way? Well, firstly, a 559$ entry fee (with online play). And for what? I don't need or want kinect. I don't need the cloud of a level they're shooting for. I don't need or want tv anything, and I definitely don't need 3 OS's.

There's probably 200$+ worth of stuff I don't need or want in there. Imagine if MS had announced the console barebones, with simple upgrades, and designed the console to be more modular at 299 or 349$? We would not be having any of these problems.

Steam nor Origing allow re-selling of games. And we have had "news" of publishers wanting to extend the same model to the consoles since last (current) gen happened.

Ok, getting the money that would otherwise go into second hand gaming is also a big objective.

Steam, Origin, and now Xbox and Sony are nonetheless trying to gather the valuable marketing data of user behavior.

Which users play which games at which time and consuming which other content (the latest part being more console oriented). The benefit is huge on targeted marketing and effective gathering of data.

A gamer is not really understood by the hype generated on the web as much as by the way he plays the games he did buy.

Also, when you gather partners who provide you with exclusive games/content also BECAUSE you are able to give them user data you have a huge advantage on your competitor.

To comment on a point you made about the "more powerful ps3", it just stands to reason that Sony performed their job correctly, by focusing on the gamers, and making everything else secondary. Another user likes to use Ford as an example by dropping the quote, "had I asked consumers what they'd wanted, they would have said faster horses".

I agree that change is good, and xbox DID have some interesting policies, and Sony seems to think so as well. However, Ford sold the car when the market was ready for the car. The market was simply not ready for this huge leap with the xboxone. 5-6 years down the line? Obviously...Totally...A no brainer.  Right now...no. I think, had the current gen stayed stronger for a year longer, and consoles released in 2014, xboxone would've been accepted less begrudgingly than it was.

Did Sony perform their job correctly though?  THat question won't really be answered in 2013-2014, it will be answered later like you said.  If you re going to tell me that people buy consoles to use for 1or 2 years, then Sony did the best job possible.  Because consoles are built to be used 5-7 years plus 2-3 years past the next gen launch, not having the emerging technologies built into your console isn't performing your job correctly. Your quote of Ford actually makes my point.  Of course, M$ didn't need to present their console the way the did, that was their big mistake.  The people who are buying in 2013-2014 are the core gamers and the message needed to be "GAMES".

Neither does XBL or PSN purchases. This is the point, they have the system in place already with DRM. They just had to make it more appealing to download titles instead of buying them on a disc. At the moment, buying on a disc is better because of the things you can do with it, even if it comes to down to trading it in. But with a digital copy costing the same if not more depending on current high street pricing wars, it not appealing at all to download a game.

Steam and Origin have competition with each other as well as other markets to make games cheap, make them appealing to buy digitally (same goes for itunes/digital7/amazon MP3 etc). DRM wasn't a huge issue for these types of markets digitally as prices were good and competitive, when there is only 1 store selling the product they control the price and fixing is involved. In the UK there is a RRP of £50 for games, competition between supermarkets and high street means games are rarely above £45, most are £40 new. But PSN and XBL stores list them as £50, the RRP. There's no competition so they don't do competitive prices.

Until this changes, buying phyiscal games will be more appealing to the customer. Then if they make it competitive, they can add DRM to control piracy.

There is nothing to prove that 2nd hand sales caused studios to close. Studios close due to mismanaging budgets and releasing products that people do not want to buy.

P.S. Is this site acting al buggy for everyone else? I get screen flickers and I no longer see any of the "post", "quote" etc... buttons.

Edit - NVM, figured out the problem. Shitty IE on my work PC decided to suddenly begin bugging the fuck out.

Steam: I can play offline any time I want.  In fact I was just at a cabin for 3 days with no internet or telephone.  Guess what?  My laptop still played Skyrim!

MMOs:  Those games require online because THEY ARE ONLINE.  DUH!  Did MAG require online? Yes.  Should Ryse, a single player action game?  NO!

Appstore/Google Play:  What lol?   

Stop acting like MS was doing nothing new.  They were!  No one had ever conceived a more restricted service before.  Face it!

There is no way to prove that if people don't have used game to buy that they will instead purchase the titles at full price. Believe it or not there are plenty of people who think $60 for a video game is too expensive.

This is just like how devs always like to say "We lost X number of sales due to piracy", which is also not true because how do you prove those games would have otherwise been purchased?

Point is you cannot prove it for either case. However, if has been shown time and again that 2nd hand sales actually help fuel future game purchases from those who do in fact like to buy games when they release due to being able to search for the best return on their product to fund the next title they wish to pick up.

I can only speak for myself, but if there was no 2nd hand market for me to sell to I wouldn't buy nearly as many games as I do, which is about 75 titles on PS2, 56 on PS3, 12 on Vita, 30+ on Wii, etc...

Take that away and those numbers will dwindle BIG TIME, while not ensuring that those who purchased my titles at a dicsounted price would otherwise walk into a store and pay the retailer/publisher's asking price.

I also find it funny that people say 2nd hand sales are hurting the industry yet the industry has grown time and time again over the last 30 or so years and now sells more games than ever before.

Companies go out of business, that is just the cold hard truth about business. None of them are entitled to remain in the industry. They need to earn the right to stay and the consumer ultimately makes that choice. That or the devs make stupid decisions and go under due to no reason other than their own mismanagement or people just not wanting what they are selling. (Ex: 38 Studios, THQ)

It isn't our responsibility to foot the bill for their dumb mistakes. It isn't our responsibility to give up out consumer rights so they can keep spending $100m to make a game and then another $100M trying to advertise it because they want 5M+ sales. It isn't our fault that some studios get shut down once their game goes gold and doesn't even have a chance to sell a copy or *yikes!* have some end up on shelves as used. Games shouldn't need those kinds of sales in order to survive in the industry. It is a choice they make and ultimately they will live or die by those choices.

Choose to believe it or not, but if you get rid of 2nd hand sales and piracy all together you are still going to see studios go under time and time again. Getting rid of the 2nd hand market will ultimately cause the industry to shrink.