Don't use the piracy crutch, both the PS3 and 360 where hacked, and in the 360's case years ago and neither system suffer worldwide cascade failure, in fact it is barely noticeable in the key market and only appear as a fringe issue in under preveleged country were games can still cost far more money than the average joe can fork out.

And as of the obseletion of the physical medium? What rubbish, do you honestly expect physical medium to dissapear overnight? Look up the purchase habbit of Music and Movie in the US, there is a definite trend towards digital but even after Apple busted open the gate of digital dstribution all the way back in 2001, physical album is still the market leader over digital.

For the entire lifecycle of the PS4-XboxOne, it would be an extremely easy prediction to say that physical game is not going away... it will definitely become less dominate but in a decades time retail and physical game will still play a pivotal role in the success and failure of video games, you can count on that.

And as for Microsoft not being in a bad spot? Take a look back at the disastrous launch of the PS3, its predecessor was market leader but it came of the gate like a bag of limp noodle, no games, disatrous PR, shit services and an attitude that stank to high heaven. They eventually manage to claw their way out of a hole but the lost of market share was massive.

Given that the so call digital age XboxOne has received an equally disastrous round of PR bombing and is more expensive than the PS4 to boot, Microsoft is already having to fight an uphill battle to convince consumer that their product is a value-added proposition, the same shit Sony did and they were in a MUCH strong position with respect to brand name, I cannot picture them gaining market share in the short term, and in the gaming business the early adopter in the first few years matters.

Microsoft is not gaining market share with these stunts, they're losing them, Europe should have been the battle ground, with US being the home turf, but instead of taking the fight to Sony, MS is basically given half of europe the middle finger and telling them to buy the PS4, and on top of that, they have not produce the so call value-added proposition to entice these market, they're preaching to the US and UK only, the stronghold were they have been winning year after year, and despite this, they're loosing ground in the core demographic because they keep fucking up their PR with statement almost AIMED to infuriate core gamers.

Microsoft jumped the gun. Just like the PS3 and the Dreamcast, the tech / service they're trying to introduce is simply not what the consumer need or want anytime soon. The XboxOne should have been a next-next-gen thing.

PlayStation 3 games have DRM.  Disc-based games do not use an active DRM, but digital copy protection is a form of DRM.  Nevertheless, any DLC or games you've downloaded use DRM.

The Xbox One's DRM is active DRM, not because it is draconian, but because you can create groups of friends, assign games and DLC to those groups from your library, and they have instant access to the library you opened up to them.  To ensure you still want them to have access to it, when they're accessing your library or when you're accessing theirs, it checks to see whether or you or them still have access to the games you had access to an hour ago.  It checks those lists every 24 hours to ensure no changes have and to update any game library additions or deletions. 

If I buy a game on a disc, with the Xbox One I can play that game AND I can share it with a friend and they can play it too.  In single campaign, in co-op, or multi-player.  They have full access to the game.  If I go to a friends house, my entire library is available on his/her console.  If I have a game that's four-player, split-screen co-op, all four of us can play the game, the same way you can with the Xbox 360, the PS3, and the PS4.

If I want to trade in that Xbox One game, I can.  If I want to give it to a friend, I can.  They can be my next door neighbor, or they can be half-way around the world.  As long as my game is also available in their country, they can access a region specific copy of it.  So, what is draconian about it?

An Internet connection?  My Xbox 360 was connected to the Internet 24/7, 365.  As long as the console isn't doing a massive download while I'm playing a game online, I don't really care if it's phoning home to Microsoft.  In fact, if it does it after midnight, I'd be hippy skippy.  But I don't see how updates, be it software, or access/control lists are draconian.  Your average Anti-virus/Malware utility checks multiple times throughout the day to see if an update for the software or database is available.  Frequently these are large lists, often into the MBs, yet we persist in allowing them.  They're not considered draconian.  Windows Update requires a check-in every week, and once it downloads the updates forces you to wait before you can shutdown your computer.  Especially, if you haven't installed them before attempting to shutdown.  Yet, we don't consider this draconian.  

Sony installs a rootkit, that's not draconian DRM.  Microsoft requires an Internet connection and to use that connection to phone home at least once, every 24 hours, and that's draconian. 

When you start pointing a finger at people, just remember, you have three pointing back at you.  

I actually want a next gen connected consle designed to integrate with my internet connection so your argument there is incorrect.  Time will prove whose model is best but Microsoft aren't showing any signs of backing off from their push as they know what their roadmap is and have a clear vision for the future of their console.  Microsoft have so far lost zero market share as neither console has been released yet, try coming back 1 month after release and you'll then at least be able to use that "fact".

http://news.xbox.com/2013/06/update

So you won't be getting an XboxONE any more since the just backed off completely from what you wanted??