MS's original vision of an always-online console would have been a failure. It's possible that the eight generation could have been their "Saturn Moment," with them going the way of Sega. They stood a very real chance of losing a tremendous chunk of their market share, and it likely would be performing noticeably worse than the Wii U. Investors would be breathing down the necks of those in charge, and with the Xbox brand losing them money constantly over the years and the XBO having no real prospects at commercial viability, MS may have been forced to sell off their gaming assets or at least withdrawing from hardware manufacturing, with MS Studios becoming a third-party studio. In any case, I did not see MS's policies working out well for the system, especially not when gamers could get the PS4, which does not have any restrictions on used games, has no online requirements, and costs $100 less.

The idea of always-on DRM was quite simply repugnant to millions. For nearly four decades console gamers have enjoyed the right to lend, sell, or gift games at their own discretion under the First-sale Doctrine. For nearly four decades they have been able to utilize the property they paid good money for at their own whim, without having to continually ask for "permission" to be "allowed" to play their games as if they were kids who must beg their parents for TV privileges every time they wanted to watch cartoons. And what happens when support for the system is dropped and the servers are all shut down? A $500 brick and a collection of $60 coasters. You cannot upend decades of precedent by stripping gamers of their First-sale rights and making them wholly dependent on your servers and not expect to suffer for it.

In addition, there are serious technical/demographic obstacles that would cripple an always-online console. Internet infrastructure is a joke, at least in America. According to the most recent surveys I could find, about a third of U.S. households lack broadband internet entirely (incidentally, about a third of 360 owners aren't connected to the internet). Of those who do have broadband access, well, the definition of "broadband" can include some pretty shitty connections with low bandwidth caps. Not everybody has great internet, and when their internet goes down, their always-online system would effectively be rendered a brick until service is restored. Had the XBO been digital-only, they would have lost a lot in sales because for a lot of people buying one simply wouldn't be an option even if they had the $500 and the desire to buy one. Our current infrastructure makes a system that only does downloads completely unfeasible. Sure, they technically could release such a system, but it would sell poorly as only people with sufficiently good internet service would even be able to use it. Such a move would have crippled sales even worse than the "almost-always-online" requirement they originally had would have.

Personally, I don't think for one minute that their main reason was to bring about new advances in gaming or anything noble like that. It was an attempted power grab designed largely for the purpose of eliminating used games and more generally to simply control all aspects of every transaction and all usage of their products. Several people and publishers in the game industry have been griping about used games for the last few years (and said gripes are totally baseless). It's essentially a repeat of the late 80s when Nintendo of America was swearing up and down that game rentals were going to be the death of the industry, and they fought Blockbuster tooth and nail to eliminate rentals (they failed, of course). "Big Entertainment" has rarely had our best interests in mind. From attempts to block VCRs from the market in the early 80s to the push for laws like SOPA and PIPA today and all the lobbying for copyright term extensions between, they have continually sought nothing short of copyright being an absolute and perpetual property right. They want a world where the publishers control everything now and forever, lock, stock, and barrel, where possession is no longer nine-tenths of the law because we are no longer buying "products" but rather paying for "services." They have shown time and time again that they have no use for "traditional safety valves" like Fair Use provisions, the public domain, and the First-sale Doctrine because they feel those things threaten their ability to make Mo' Money, Mo' Money, Mo' Money. Sometimes they win in these endeavors, and sometimes they lose. So far, Nintendo and Sony have refrained from pushing for restrictive measures on ownership and usage as they know console gamers aren't going to go for it any time soon, but MS was ready and rarin' to go, and it created one of the biggest PR debacles in the history of gaming.

There's no reason that Microsoft had to attempt to implement system-wide DRM for physical games that mandated an internet connection. Hell, even the all-digital Steam has an offline mode; you don't have to connect to Valve's servers on a periodic basis for permission to play your games. MS could have easily maintained basic expectations people have had for nearly four decades in regards to a console (e.g., lending, trading, reselling, gifting, & renting games, being able to play offline indefinitely if one so chooses) yet still offered fancy cloud stuff as an optional thing. You can bring people "The Future of Gaming" without destroying the past. And if console makers and third-party publishers want to fight used games, maybe instead of pushing for unnecessary DRM they should follow Satoru Iwata's advice: "The best possible countermeasure against people buying used product is making the kind of product that people never want to sell. Taking as an example Mario Kart or Smash Bros., even though you might think, ‘I’ve done enough with this,’ you’ll still have second thoughts. ‘Wait a minute. If one of my friends comes over, I might need this again.’ You’re never going to want to sell these games. That’s something that always occupies our minds. We need to make software that players don’t want to sell."

Intrinsic said: pbroy said: Well I'm glad Sony doesn't require always on for PS Now for their Cloud solution. Ohhh wait... You need to be always online to read the Cloud. Silly me, but it's ok if Sony does it. Boooo M$ always online Cloud. So you mean to tell me that you don't know the difference between streaming a game over the internet like you would with movies on netflix and buying a game from a store but being unable to play it unless you were connected to the internet? If that is really the case then well..... I'm sorry I guess. To OP: I never thought that would have been the last we would hear about internet restricted DRM from MS. I feel its still what they are ultimately trying to do, just too much money in doing it for them to be able to ignore it. They just went about it the wrong ay last year and now I think they will take it a lot slower. What I believe they want to do with all this cloud talk is to find a way to split the actual running code of games in such a way that some of that game cwould need/benefit from running off their servers. If they can successfully do this and have games incorporate whatever it is they do, then they would get gamers to need the cloud service. Kinda like how gamers are now paying for online multiplayer. I hope they don't succeed though, cause if they do then it will mean sony will be following too.

Do you not know that PS Now uses Cloud and you need to always be connected to use it? There is no difference in MS Cloud processing and PS Now emulation when it comes to internet being always connected.

Sadly, judging by the comments in here, they won't fight.  They'll sit there, ask MS for more, and defend them to the end.  Of course, this means their install base is going to be much smaller, but I guess that doesn't matter to them.  Whatever MS says, goes.

That's the funny thing. I and plenty of Sony fans will never support a DRM console or digital only. I personally would never buy that type of product from anyone. If that does become the future then I am done with console gaming. I would only play on Steam then and I would have to buy a WiiU buy default if Sony had DRM.That is the day that I stop playing console period.

I was with you all the way untill you mentioned the wiiu. The wiiu is a great console, dont know why you had to say that the only way you get one is as a last resort.