Back in 2006, Sony made a of huge mistake and miscalculation. They thought a great way for them to compete with Xbox Live would be to give away online gaming. Nevermind that no matter what they charged or did not charge, there would always be data centers to maintain, staff to pay, publishers to appease, and other major costs associated with running and maintaining their cloud gaming network.

Out of the gate, no rational individual would claim PlayStation Network was equal to Xbox Live. This writer bought an Xbox360 because every review and tech writer at the time praised Xbox Live. Microsoft clearly had the upper hand on the online front, and they maintained that lead for most of the current generation. As time went on, Sony had to respond. Not only to compete, but also to threats against its network.

Everyone remembers the PSN outage all too well. Credit card information was stolen, and Sony shut the network down while it enhanced security and investigated what had went wrong. Now there was a new problem: Sony was dumping wads of cash into PSN to bring it back, all for a service no one was paying for. This was an unacceptable situation and something Sony had not seen coming. The PR nightmare that resulted was a huge setback for Sony, and Sony responded by offering all sorts of freebies to its customers to restore their conference and loyalty. This was the turning point at Sony. Sony decided then and there the risks and costs of running an online gaming network were to great to give it all away.

Eventually, Sony introduced Playstation Network Plus. For the first time, PS3 users paid an annual fee for extra features on the Playstation Network. Finally, Sony was able to offer services that matched and exceeded Xbox Live Gold. It took nearly a whole generation to realize Microsoft was right. After all, it isn't just Microsoft that charges for cloud services, storage and features. Google, Apple, and Amazon all charge for cloud technology. To think Sony would be able to do something no on else in the tech industry does was naïve and shortsighted.

The timing could not be better for Sony to finally have PSN reaching its potential. Microsoft is about to make one of the biggest mistakes in gaming history, and Sony is finally ready to match and/or beat Microsoft on every front.  When Microsoft announced it would be limiting the sell and trade of used games, it drove a stake into the heart of gamers. Microsoft proved its ignorance of the gaming culture by thinking it could do away with freedoms gamers have always enjoyed and exercised.

To be fair, Microsoft announced that games on Xbox One will be fully installed and no discs are required. Games can be re-downloaded to any console you are signed in to, even if the disc is not present. You can run the game on any Xbox One you are signed on to. Gamers should love the freedom to move games from console to console, even without the disc. Right?

The problem is that gamers are used to taking their disc with them.Nothing Microsoft is purposing fits the long-standing traditions and practices in console gaming. Signing in to an account and re-downloading the game at a friends house is not the status quo. Thats the Steam way. Not the console way. Gamers are also used to having the freedom to leave the disc with their friend if they decide to lend the game to them for a while. Microsoft has made clear there will be EXTREME limitations on your ability to do that. Ultimately, Microsoft has made the mistake of assuming they can eliminate the freedoms gamers currently enjoy if they simply give them new freedoms they never asked for.

It took a near catastrophe for Sony to realize they had to take their cloud gaming network serious enough and make it good enough that people would pay for it. To be fair though, Sonys mistake was miniscule when compared to the one Microsoft is about to make.  Playstation 3 was always a great console. It was only PSN that needed improvements. Microsoft is about to make a mistake that threatens the future of Xbox.

Unfortunately for Sony, charging for something that was previously free is never a smooth transition for your customers. Those that believed online multiplayer would remain free forever are already crying foul. Microsoft has inadvertantly done a huge favor for Sony. While many PS3 owners rant and rave about new fees, plenty of Xbox360 owners, used to paying for online multiplayer, are now running towards Sony with open arms as fast as they can. They may have passed on PS3, but they all have fond memories of their PS1 and PS2.  Microsoft seems to have forgotten theyre the rookies in this business. Theyre about to learn, in gaming, loyalties are flexible and gamers go where the games (and freedoms) are.

Microsoft has to realize that changes in the console market always lead to huge market shifts. There will be a clear winner and loser this generation, mark my words. The Xbox One and PS4 battle will not result in a tie as the previous generation did. In fact, major changes in consoles often make or break a company.

Microsoft had better make some concessions or have a MAJOR ace up its sleeve; otherwise, as things sit today, Xbox One is in deep trouble.