What Microsoft should do to stay competitive.

[Shadow1980]

I don't think there's a way for them to be competitive anymore. The damage has been done. They aren't hurting like Sega was in the latter half of the 90s, and they'll probably continue offering their own hardware, but there's no way for them to get back to where they were doing the 360 era.

They dropped the ball big time with the Xbox One thanks to the pre-release debacles. Nobody in 2013 wanted a system that wouldn't function at all without an online connection, that blocked used games, and that force-bundled Kinect. PR blunders like Adam Orth's "Sometimes the power goes out. #dealwithit" spiel (remember that?) and Don Mattrick shitting on the idea of backwards compatibility ("If you're backwards compatible, you're backwards") didn't help things. Neither did the relative lack of must-have first-party exclusives.

While they reversed course on always-online requirements and blocking used games, they stopped force-bundling Kinect a few months after launch, and they finally added backwards compatibility two years after launch (albeit in a piecemeal fashion), it was too little, too late to salvage the situation. The PS4 emerged as the clear market leader thanks to its lower launch price and the perceived gamer-friendly reputation it developed before launch, which they intentionally cultivated with things like this:

A friend of mine once stated that MS permanently lost a lot of customers last generation because with digital becoming more popular, people got locked into whatever ecosystem they chose, and millions of people who bought a 360 in Gen 7 switched to the PS4 in Gen 8.

There is probably still some wiggle room left, but they'd have to make a system that isn't just an equivalent offering to PlayStation in terms of price, specs, etc., but is something more appealing. Offering beefy hardware at a lower price point could work. Or better yet, they could fully utilize the massive library of IPs and studios they now have at their disposal to create a lot of quality games that you can't get on PlayStation.

The problem with that is that the things that could realistically make Xbox more competitive are things they're not really aiming for. They really do seem like they want their games on as many platforms as possible. Like I said before, they're still going to offer their own hardware in the future, but it seems more like they're looking to position themselves as a sort of first-party/third-party hybrid, having their own consoles for people who really, really like Xbox (and don't mind going digital-only), but also putting their games on PlayStation, Nintendo, and PC... if that truly is their strategy going forward. I guess we'll find out soon if that's the case.