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Microsoft Corporation (MSFT) Apologizes, but Is It Too Late?

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Microsoft Corporation (NASDAQ:MSFT) isn’t always bright, but it isn’t stupid.

Microsoft Corporation (NASDAQ:MSFT)

Realizing that consumer sentiment was turning against its Xbox One gaming console in favor of Sony Corporation (ADR) (NYSE:SNE)‘s PlayStation 4, the software giant is scaling back on the publisher-friendly initiatives that are rubbing die-hard gamers the wrong way.

  • The requirement that an Xbox One connect with Microsoft Corporation (NASDAQ:MSFT)’s servers at least once every 24 hours is toast. After a one-time system setup that registers the console, online players can play any disc-based game without having to deal with Mr. Softy’s authoritative ways.
  • Just as Sony Corporation (ADR) (NYSE:SNE) received a rousing round of applause after announcing that gamers will be able to trade in, lend, resell, gift, and rent games on disc the way that they are currently able to on the PS3, Microsoft Corporation (NASDAQ:MSFT) is backing away from the limitations that it was allowing publishers to take advantage of in order to curb profitless software exchanges.
  • Xbox One games will also be able to play on any Xbox One console no matter where that Xbox One may be. Regional restrictions have been zapped.

It’s not as if Microsoft Corporation (NASDAQ:MSFT) had much of a choice. Xbox 360 has been the best-selling console in this country for the past two years, but sentiment can turn quickly.

Just check out Nintendo Co., Ltd (ADR) (OTCBB:NTDOY). Nintendo Co., Ltd (ADR) (OTCBB:NTDOY)’s Wii was the early favorite with its low price point, family-friendly games, and bar-raising motion-based controller. Things haven’t gone so well with the Wii U. Despite having a year’s head start on the competition, Wii U has been a disappointment.

With Wii U’s fate all but sealed, the attention will turn to Microsoft and Sony Corporation (ADR) (NYSE:SNE) slugging it out this holiday shopping season.

Microsoft Corporation (NASDAQ:MSFT) seemed to have the early momentum. Its Xbox 360 is the top dog in this country, and Microsoft has 46 million Xbox Live subscribers, and they are unlikely to abandon their online achievements and switch consoles between generations.

However, momentum turned during last week’s E3 expo when Microsoft flew too close to the sun and Sony doused it with gasoline.

Microsoft Corporation (NASDAQ:MSFT)’s doing the right thing by backtracking, but the damage may already be done. Gamers may not feel that the retreat is genuine, fearing that Microsoft will reverse course once publishers get their say.

The hope for Microsoft and game developers at this point is that the early adopters buying consoles later this year flock to digital delivery. That solves the hand-me-down dilemma.

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