Will Microsoft's Policy Reversal Save Xbox One?

They said it couldn't be done.

From former company execs who more or less told consumers to

to analysts who

, many doubted that

could or would change its DRM policies for Xbox One. This week the company

, including the online requirement (users won't have to establish a daily connection just to keep gaming). Users will also be able to trade, lend or re-sell their games in any way they please. This move comes roughly one month after the original Xbox One policies began to materialize. At the time, consumers hoped that the company would use the 2013 Electronic Entertainment Expo to quash the rumors and announce that the console will be just as open-ended as its predecessor. In the week leading up to E3, however, Microsoft confirmed that Xbox One would become

. After receiving a fan backlash, some wondered if Microsoft would finally go back on its word. The company stood its ground, however -- until

announced that there would be

for PlayStation 4. Consumers responded to the news by

than Xbox One. Part of Sony's success could be due to early marketing (PlayStation 4 has been hyped fairly heavily since February), the lower price (PS4 will retail $399 -- $100 less than Xbox One) and the focus on games over other forms of entertainment. While both of Sony's press conferences were designed for gamers, Microsoft used its first Xbox One event to demonstrate why the console is a mainstream entertainment device. Any one of those things could have given Sony a boost, but it is largely believed that the game restrictions and online connectivity requirements inspired consumers to shift their attention to PlayStation 4. Now that Microsoft has eliminated the things that consumers disliked the most about Xbox One, investors may wonder if the company can dominate during the next generation. If nothing else, Microsoft's chances of success have improved tremendously this week. While the company may have baffled (or simply turned off) some consumers with its unusual conference in May, the game lineup is one of the strongest the industry has ever seen. Xbox 360 is a consumer favorite among consoles of the 2005 - 2011 generation.

(OTC Pink: NTDOY) Wii may have

, but when it comes to game purchases, consumers frequently turn to Xbox.

series typically

than on any other platform. The Xbox 360 version of

also

than it did on PlayStation 3.

, one of Microsoft's flagship games for Xbox 360, sold

-- topping the combined sales of the

from Sony's

competitor,

. Xbox isn't always the leading platform, however. Worldwide, PlayStation 3 has still sold a few thousand more units. PlayStation 2

with sales of more than 150 million units versus just 24 million for Microsoft's introductory console. There are also some franchises that perform better on PlayStation consoles. Capcom's

series is one of the best examples.

was originally developed as a GameCube exclusive in 2005. The PlayStation 2 version -- which was released several months later -- sold

. Similarly,

-- which was originally released as a Dreamcast exclusive -- sold

after the game was ported to Sony's console. This trend has continued with

and

, both of which received simultaneous releases on Xbox 360 and PlayStation 3. Thus, the next generation will not be a slam-dunk for either Microsoft or Sony. But now that Microsoft has removed its Xbox One restrictions, its chances of success have greatly improved.