"If you understand the technology and you understand the human mind, you can predict the future. You can tell what is going to happen."
According to Schell, this is at the root of Microsoft's mistakes with the Xbox One. It understood the needs of its partners, and its own needs as a business, but it badly misjudged the psychology of its customers. It is the classic innovator's dilemma: the market will change, and the customer will respond positively to that change, but the customer won't necessarily allow the current leader to be the one to make that change happen.
"Your customers want you to stay the same, even if it drives you into the ground," Schell says. "Somehow, Microsoft didn't seem to think that would be a reality, or even a problem.
"The reality is that they can't do what the customers want. Basically, Microsoft said, 'We're going to be Steam. You like Steam, don't you?' And we all said, 'No, we hate that. We hate you. You're an idiot to do that.'
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"There's one mistake that they all make, and that mistake is listening to their customers."
But that's precisely what Microsoft has done. In the last few weeks, it has altered or removed almost every feature of the Xbox One that truly distinguished it from both its competitors and the current generation of hardware. Microsoft wanted to demonstrate boldness in the face of a rapidly changing market, but it did too much, too soon and with too heavy a hand. The problem for Microsoft, Schell explains, is that while the subsequent outcry came from a relatively small section of the gaming audience, it is nevertheless impossible to ignore. Microsoft may prove to be correct about what a console needs to be in the digital world, but that's irrelevant when it comes to the psychology of the consumer.
"The problem is that the hardcore folks always want the same thing: 'We want exactly what you gave us before, but it has to be completely different.'
"When you want to do something really different - the solution to the innovator's dilemma - you can't take your big brand and say it's going to be completely different. You need to set up something up on the side, and big companies are hesitant to do that. It's how Valve could do it [with Steam], because they had nothing before.
"I suspect that we're going to end up in that world. Are we going to end up there on these consoles? I don't know. It could be that some dark horse shows up. It could be that Apple shows up. It could be that somebody finds a better way."