The next-generation console wars are over and Microsoft has blown it. Even before PRISM blew up and people began to wonder about their electronics invading their privacy, the design of Xbox One is leaving such a bad taste in people’s mouths that the PlayStation 4 has the lead before the two are even in the blocks.

Never mind that the PS4 will be $100 cheaper. That’s the easy part. It doesn’t take a lot of surfing to see that the incredible intrusiveness of the Xbox One will keep it out of a lot homes, including mine. And Sony is drawing thick lines of separation between itself and Microsoft, making as much noise about the subject as possible.

First off, you cannot play any games if your Xbox One does not connect to the Internet, at least once every 24 hours. Not even single player games. Until the Xbox One phones home, your game console is a DVD player. Sony has no such restriction.

If you disconnect the Kinect player, which is now mandatory and part of the Xbox One bundle, your games won’t work. This caused all kinds of fears, with increasing irrationality and amusement, of what people feared it would do. They thought Kinect would record them walking around the house naked or engaging in various…acts.

Microsoft said no, “you are in control of when Kinect sensing is On, Off or Paused.” When the system is off, the Kinect will only listen for a single phrase—”Xbox On”— before it comes on, and you will be able to disable that, too.

At first, people feared the Xbox One would not allow for playing used games. Microsoft punted on this one and said it will allow the sale of used games at “participating retailers,” but only if the publisher allows it. Well, the publishers are the most vehement opponents of the used game business. Microsoft said it will not charge a fee for a hand-me-down disc, but the publishers certainly can.

The question then becomes which retailers will participate? We all know about Game Stop, but there are many independent shops that do this as well, mom-and-pop videogame and even record stores, the few that remain. Will Microsoft, EA, Activision, etc., want to go through the headache of certifying all these indie stories, or just go with a few big chains?

And if you want to loan a game to a friend? Get this: That person has to be on your Xbox Live friends list for at least 30 days and you can only lend them the game once. That pretty much kills not only lending to friends, but also rentals, like the few remaining video stores offer and mail order services like Game Fly.

The topper to all of this? Don Mattrick, president of the Interactive division at Microsoft, was asked about this issue. One example brought up was how popular the Xbox 360 was among soldiers stationed abroad in remote areas like Iraq and Afghanistan or on a submarine. His response? “We have a product for people who don’t have some form of connectivity, it’s called Xbox 360…if you have zero access to the Internet, it’s an offline device.”

See it for yourself:

Seriously, Microsoft, did you hire the old Divx development team from Circuit City?

Sony, of course, is making hay of this. They are loving it. Fans begged them not to engage in this kind of control prior to the release of the PS4, and they listened, for the most part.

Ars Technica reported that when Jack Tretton, president and CEO of Sony Computer Entertainment, slammed Microsoft at its E3 press conference with statements like “You can trade in the game, lend it to a friend, or keep it forever,” the reaction was overwhelmingly positive.

It should come as no surprise that EA President Frank Gibeau told VentureBeat “Sony’s having a great show.” I didn’t attend the show; to be honest, E3 is such an unpleasant experience I don’t like to go and didn’t ask for any assignments. But I can see the momentum shifting. There isn’t a vendor-neutral site out there where the reader reaction is entirely behind Sony and entirely against Microsoft. Mattrick’s ‘let them eat cake’ comment was the final straw.

The head of Australia’s top civil liberties group, called Civil Liberties Australia, called Xbox One “the definition of a surveillance device under some Australian laws,” and that Aussies “should vote with their wallets and skip the next Xbox” if Microsoft is not up front with its privacy rules. He’s not alone. Germany’s federal data protection commissioner, Peter Schaar, told Spiegel Online that Xbox One is nothing more than a monitoring device under the guise of a gaming console.

Rumors about the Xbox One license agreement and Kinect behavior had been floating around for a while, and just as Microsoft didn’t listen to the bad reactions to Windows 8 during its beta cycle, it didn’t listen to the massive opposition here, either. I guess they need to suffer another overwhelming consumer rejection again. And I suspect the only person who will lose his job will be Mattrick, because he told the truth.

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