Microsoft Corporation (MSFT), Sony Corporation (ADR) (SNE), Nintendo Co., Ltd (ADR) (NTDOY): What a Pack-in Headset Says About the Future of Xbox One

Microsoft Corporation (NASDAQ:MSFT) is an American software giant that helped usher in the computer age. The company has also branched out into hardware manufacturing, creating devices such as the Zune, the Xbox console line, and the Surface Tablet.

In planning and debuting its upcoming Xbox One video game console, Microsoft Corporation (NASDAQ:MSFT) has made a number of costly errors. Now, its recent decision to include a headset in every box portends bigger changes for the future.

Which One?

When Microsoft Corporation (NASDAQ:MSFT) partially unveiled the Xbox One to the press, the device was touted as a revolutionary piece of consumer electronics that would redefine and dominate the world of gaming. The industry was shifting; anyone could see that, and the Xbox One was the console that would be best suited for success in the changing landscape. It featured expanded online functionality and a requirement that the system connect to the Internet on a daily basis. It would block most used games but allow gamers to share software using a “Family” plan. It featured an improved Kinect camera that had to be plugged in for the device to function. Of course, it is now apparent, if it were not already, that these were terrible ideas.

The company’s recent announcement that the Xbox One would not require the Kinect camera to function is just another in a long line of policy reversals surrounding the system. Put simply, Microsoft Corporation (NASDAQ:MSFT) has continually demonstrated that it has no clear vision for what the product is. The device is certainly nowhere near in line with the strategy that what was concocted in the planning and development stages. Product launches on the scale of an Xbox or a PlayStation take years to hone and execute successfully. As a result of unprecedented consumer backlash, the company has had to rush to get its console in a market-ready state. While gaming is not a huge part of Microsoft Corporation (NASDAQ:MSFT)’s business, the company clearly wished to make it a bigger one in light of Xbox Live’s success.

Candid Camera Problems

Many analysts took the removal of the Kinect requirement as an indication that an Xbox One SKU that did not feature the camera would be released at a later date. Industry reports suggest that pre-order information, in conjunction with online polls and image problems surrounding the console, are causing panic in the Xbox division. In my opinion, the news that every Xbox One will now come with a headset packed in the box is an indication that Microsoft Corporation (NASDAQ:MSFT) is planning for the release of a Kinect-less console.