Microsoft: The Good, The Bad, and The Ugly.

The biggest news out of Microsoft this week was their plans to drop their extensive DRM on the Xbox One.

Here is the good:

• Will not require you to be "always on"
• Will not check in every 24 hours
• Will require one-time validation when you first setup your console
• Downloaded games will work when offline
• No region locking
• Sharing and used games are fine

The question is why? Why would Microsoft change their stance on so many DRM aspects? To answer that, let's rewind to E3. During E3 this year, Sony completely dominated the Xbox One. Microsoft announced the Xbox One will have an always on, internet required connection. Games will be locked to your account when you first play them, to prevent sharing games and playing used games. Games also needed to be connected to the internet to play it, even single player. Consumers were extremely unhappy, to say the least. Then, Sony held their press conference. To sum it up, Sony announced the PS4 will do the exact opposite of the Xbox One in terms of DRM. How badly did they punch Microsoft in the wallet? Watch this short 22 second video to find out.

Pretty badly. 

So why did Microsoft do this to begin with? Simply put: Microsoft is money hungry. Microsoft cares less about console sales, and more about investors. Microsoft put features into their console that investors LOVE, and will give them money for, despite consumers hating them. What do I mean by this? Take, for example, the movie passes. If you want to watch a movie, you buy it on the XBL. Then, you play it. But, if more than one person is in the room, you need to buy another pass, so both people can watch it. Currently, this feature isn't on any other streaming service. With cable On Demand, you pay one price, with Netflix you pay one price, PS3, Blockbuster, etc  etc. Other companies will see this new money making feature and invest in Microsoft, hoping to make more money off of their technology. That's not exactly how investments work, but it's what Microsoft is aiming for. Money off of investments. 

On the other hand, Sony DIDN'T do this. If both companies want money, how can Sony survive? Clearly the investors will invest in Microsoft, not them. This is where Sony was smart. 

Sony used the simple economic law that if you sell more at a low price than less at a high price, you will make more money. For example, if a product costs 100 dollars to produce, and you sell it for 300, you make 200 dollars profit. If only 10 people buy your product, you made 2,000 dollars. But, if you sell it for 200, making a 100 dollar profit, but sell 100 units, you made 10,000 dollars. With a lower price, it has a better appeal, so more people buy it. Sony saw that if they take the investment cuts, and make a console EVERYONE will want to buy, they will make the same amount, if not more, money than Microsoft. Smart. 

The question still stands: "Why did Microsoft reverse their DRM policy?" There isn't an official reason I can give, as nobody really knows. However, from a business standpoint, I can give you an educated guess. Most likely, investors (not Microsoft) saw how ANGRY people were at the Xbox One's DRM. Suddenly, nobody wanted to invest in that, as it wouldn't sell. It would create a bad future where nobody liked their products. Suddenly, with the devastating financial loss, Microsoft was forced to scrape their DRM policies in order to try to gain support again. 

At the end of the day, is Microsoft good or bad? It's a hard call. In my opinion, they're still terribly bad. All Microsoft is interested is in is money. They do not care about their consumers. It's only when their consumers cost them investment money that they cared enough to change anything. Microsoft needs to stop turning their back to reality and realize without good products, they're going to fall under.