There’s a lot of great features on the 360 that they could be advertising, such as downloadable games and video marketplace.

1. Market in the United States the things that Xbox already does, out of the box (such as Netflix, Video renting, Games on Demand, photo viewing, mp3 playing and watching your videos on your tv). Microsoft changed the face of gaming by doing a complete overhaul on the dashboard last fall, yet there’s not a single plebe who knows that this was done, or what it means to their dollar.
2. Increase the availability of features such as Netflix and Video Marketplace in other countries. I’d go so far as to say they need to consolidate features through all countries so they are the same everywhere. Canada and many other countries are continually shafted in this regard getting secondary and sometimes significantly reduced feature sets than what is found in the United States. And countries like Canada should get off their ass and deal with these  copyright, distribution and in sometimes laws that are hampering with these availabilities.
3. Simplify the video watching process: I still have a swarm of personal avis and movs I can’t watch on my 360 because the container format isn’t compatible.
4. Significant bundles: Chances are people won’t decide on the 360 because you’ve bundled two shitty games nobody wants with it. What they do want are more controllers, a wireless adapter, an HDMI cable, gamer points. Perhaps Microsoft could kill two birds with one stone and make Zune bundles giving people an mp3 player with their console. What if there were a Rockband bundle?
5. Casual Gamer Developer Exclusives: Forget Natal, what if they took some significant mainstream games from renown casual developers and gave had exclusives from them for the 360? Imagine if you had a bundle for these exclusives? ‘From the maker of The Sims’ or ‘World of Warcraft’ or ‘Roof Rats” or ‘Peggle’ can have a lot of clout with the mainstream crowd, especially if marketed to them. Just look at the sales and numbers of these games!
6. In-Store visibility: I was just in my local Future Shop and perused the games section. Each section is white, with the name of the console emblazoned over white over the shelves. There was nothing pointing me towards one type of console or the other, nor any immediately easy way to identify the consoles. The End of Row and Kiosk displays were no more than more shelves of more games, or piles of existing consoles. If Microsoft were to, let’s say, make a giant Xbox 360 that you could sit in and play a game, think about what the consumer would see: a giant 360 the minute they walk in the store. Even if they had designs on a Playstation3 the first thing they would do is gravitate towards it.

There is one thing Microsoft should not do to compete with the increasing popularity of the Playstation 3 and that is introduce another console. Bringing another console into the market would only confuse the already confused Joe Consumer crowd; it would tick off a great number of people who already bought an Xbox360, and it would probably tick off a number of developers who would have no desire to support more than the 2 existing Nexgen systems. No, there’s enough on the 360 as it currently is that it could stand up next to the Playstation now that their differences have been reduced. But it’s going to be a long hard fight, with no doubt some casualties on the way, while they try and regain the ground they have lost.

I’m here at this loathsome store to pick up party gifts for my daughter’s 3rd birthday. But the real story begins when I arrive, to browse, in the games section. That locale inhabited by pimply, uneducated employees watching from afar the locked glass that stands between you and your purchases.
I’m looking at the DS games, to see if there’s anything for my kids, when I overhear, as I always do in these stores, an employee giving misinformation — or more appropriately information that he’s been told to say. The conversation was between a father, in his 40s, and an employee, in his 20s and it went something like this:

Father: Do you have that new PS3?
Walmart: No. That comes in next week.
Father (moving to the locked glass): What’s this then?
Walmart: That’s the one that came in last week.
Father: Oh…is this not that new one? The one in the news?
Walmart: No this is different. This doesn’t have all the features.
Father: Does it have a remote?
Walmart: Yes. No.
Father: It doesn’t? It does? Is it wireless? Or have that string?
Walmart: Er….no it’s not wireless
Father: Does it play that, what do you call it, Blu Ray?
Walmart: (Silence)

Frustrated I speak up, as I always regrettably do in these situations and informed the Father and corrected the employee. And then it began: the father asked me what he should get. We talked a bit: I told him I had a 360, that it had many games on it and you could download more. He told me that he didn’t get a lot of time to play games because of his wife and kids, but PlayStation 3 had The Blu Ray right? He wasn’t going to buy any BRDVDs. He was going to rent them.  So I told him he could ‘rent’ HD movies on the 360. And he informed me that he didn’t realize that and his face contorted with indecision.

For Father of Four the inital attraction of the Playstation came down to the name: Playstation has been around for over a decade and people know it and the Sony brand.  The deciding factor came down to a count of features, and even if Father of Four doesn’t understand what BluRay is, or what the future of the technology is, it is the latest buzzphrase because there’s a whole section devoted to it at the local Walmart. And if the PS3 has this Brand New Thing then Father of Four must have the console with the Brand New Thing.

It was an interesting conversation and not the first one I’ve had about this topic since the price drop announcements: my neighbour, Guy Who Likes Sports Games, decided on the PS3 for the very same reason that Father of Four did.  It used to be that everyone, including hardcore gamers such as myself, wouldn’t dish out the steep pricetag of a Playstation 3: there were more games on the Xbox 360  and you can get an Xbox 360 that plays games for $199. Who’s going to pay $599 for a PS3?  Sony and subsequently Microsoft’s announcement of a price drop put these two consoles on even ground: price is similar, the library is eerily similar, and the features at root the same, but on the surface only are they unbalanced by BluRay.

In the past Exclusives were the way Sony and Microsoft waged the war and right now the war is being waged the same way. But I don’t think this has the power it once did, at least not for Father of Four or Guy Who Likes Sports Games. God of War III, Heavy Rain and Uncharted 2, while potentially stellar games with a lot of media surrounding it, will only interest people like me: people who are even aware that these games exist. I guarantee that Joe Consumer will buy a 360 expecting God Of War to be available, only to find it’s not. No if Sony and Microsoft think that Exclusives will help get the install base, then they should be looking at the Maddens, the Sims and the NHL games: the games that Joe Consumer plays, and plays for an entire year until the next one is out.

What about these so-called Casual Gamer Features like Natal and Playstation 3’s Motion Controller. Will they be the exclusives that these companies are looking for? While each are neat, and Natal moderately compelling in what new it brings to the industry,  I don’t think they are the selling features that will change minds. After all, the people they’ll be marketing to are casual gamers, and these casual gamers already have a Wii ‘And doesn’t that do the same thing? Why would I want two?’

So if not Exclusives, then what? Well I think Sony nailed it when they released the PS3: BluRay. But to adopt BluRay wouldn’t make sense for Microsoft: that move would just match them in features to the PS3 and wouldn’t make the 360 stand out.  And no company in their right mind would limit some of the best selling games in the industry to only one console.

So what is it that Microsoft should do to compete with the growing behemoth of Sony? In the next part I’ll list out some ideas that Microsoft can do to compete.