PS4 vs Xbox One: Microsoft hands Sony a big win

(MoneyWatch) Microsoft (MSFT) is in a world of hurt on its traditional business front. PC sales are way down and customer complaints about the company's user interface drove it to plan a new, changed version of Windows 8.

Microsoft's entertainment division has been doing far better -- it's on top of the console gaming world. But that could change. Plans for the new Xbox One angered customers and handed Sony (SNE) a clear win at a major trade show.

• Microsoft desperately seeks a fix
• Is Microsoft's Windows 8 U-turn a spinout?
• With Windows 8, Microsoft's self sabotage intensifies

When Microsoft detailed policies for Xbox One, the upcoming new version of its popular gaming and home entertainment console, the fur began to fly. Here are some of the more contentious issues:

• Users must have the Xbox One connected to a broadband Internet connection. No connection, no gaming.
• People must log in at least once every 24 hours to be able to play games.
• Game publishers could prohibit lending or giving away games, even though people have paid for them.
• Users could be forced to go through an authorized retailer to sell a game disc or give it away.
• Game rentals won't be supported, at least when the new Xbox launches.
• Privacy concerns mount about significant amounts of private data, including photos, videos, facial expressions, even heart rate.

Microsoft wants to move gaming into a disc-less world. However, customers are angry, putting Microsoft on the defensive on yet another front.

The upshot? While executives try to explain and convince consumers -- Microsoft Studios creative director Adam Orth told people to "deal with it" -- gaming rival Sony said it would not restrict what users did with already-purchased games and got sustained applause at the gaming industry E3 show. (What has been interpreted as a "rape joke" during Microsoft's Xbox One event probably didn't help its image either.)

Microsoft has set up conditions for Sony to walk into the Xbox customer base and woo away many buyers. It suggests that Microsoft faces entrenched problems at the executive level and with its strategy that will not go away and that could, over the long term, doom the company.

Erik Sherman

Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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