Speaking after a talk that took place during the recent Gamelab conference in Barcelona, Jesse Schell (the author and founder of Schell Games) revealed what he thought Microsoft's biggest error was in their recent approach to their next-gen policies: listening to their customers.
The big question on everybody's lips is who is ahead in the next round of the console war. The smart money is now on Playstation 4 and Sony, after their strong showing at this year's E3.
"The answer's not obvious," Schell told GI.biz when discussing that very topic. "Last time round, there were people who picked PlayStation 3, and that was wrong - very wrong. But when people make bad predictions about what happens with technology, it's not because they don't understand technology - it's because they don't understand psychology. If you understand the technology and you understand the human mind, you can predict the future. You can tell what is going to happen."
Schell suggests that it was Microsoft's inability to understand the psychology of their customers that has led them to the point they're at now.
"Your customers want you to stay the same, even if it drives you into the ground," Schell said. "Somehow, Microsoft didn't seem to think that would be a reality, or even a problem.The reality is that they can't do what the customers want. Basically, Microsoft said, 'We're going to be Steam. You like Steam, don't you?' And we all said, 'No, we hate that. We hate you. You're an idiot to do that.'
"They came out and said, 'We're gonna do this new thing.' And the customers said, 'No, we don't want that, we hate that' - even though it's what they really want and what they will ultimately buy. So now Microsoft has had to say they won't do all that stuff, but someone will.
"That's how it always goes. This is the lesson of the innovator's dilemma. Why is it that big companies fail when the technology changes? It happens in every industry, so what's the pattern? What are they all doing wrong? Everyone says, 'Oh, it's because they're stupid. Big companies are stupid.' They can't be stupid. How did they get that big and stay that big if they're stupid? Microsoft isn't stupid.
"There's one mistake that they all make, and that mistake is listening to their customers."
Schell the continued: "The problem is that the hardcore folks always want the same thing: 'We want exactly what you gave us before, but it has to be completely different.'
"When you want to do something really different - the solution to the innovator's dilemma - you can't take your big brand and say it's going to be completely different. You need to set up something up on the side, and big companies are hesitant to do that. It's how Valve could do it [with Steam], because they had nothing before.
"I suspect that we're going to end up in that world. Are we going to end up there on these consoles? I don't know. It could be that some dark horse shows up. It could be that Apple shows up. It could be that somebody finds a better way."