This is probably true, but honestly setting their console to go digital for the sake of competing with Steam wouldn't have been a totally bad thing (I personally prefer physical copies. I hate having my games on HDD). Their problem was the lack of communication.
I have a feeling they were never ready to show the DRM stuff in the first place, and some idiot Microsoft employee spilled the beans to a journalist, and from that point forward they were doing damage control. It's wishful thinking, but I'd like to think Microsoft are not so stupid that they didn't expect a massive backlash.
They've been acting scared shitless too, dodging interviews and such. It would've been better if they had been upfront about it from the very beginning instead of prancing around like a bunch of dumbasses. That just made it worse.
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