If the Xbox One is the future of gaming, then that future is as grim as everyone feared.

In an event Tuesday morning that felt like a casual bar conversation compared to Sony’s brain-exploding extravaganza back in February, Microsoft unveiled the next-gen Xbox — not in a giant conference center, but in a tent set up on a soccer field at its Redmond campus.

With a hard-line focus on the One’s television connectivity and a smart decision to actually show off the physical console, Microsoft pulled off a tight one-hour presentation that glazed over the trickier undercurrents at play. But the devil is in the details, and it’s now apparent that while the Xbox One will not require a constant Internet connection[Note: this point is now in dispute – see update further down], as many had feared, it’s still the most restrictive console ever made.

(See also: Sim City Launch Disaster Should Kill Online-Only DRM)

As the event highlighted, the One is an aggressive grab for the living room from the get-go. But for gamers, long the core market for the Xbox, two really important questions remain. How much of the hardware we buy do we really own, and how far can and should a manufacturer go in telling us how to use our console?

Microsoft drew some very serious lines in the sand today. It’s up to consumers to decide whether or not to play ball.

Microsoft’s Iron Grip

The rumor of a universal always-online requirement was finally quelled, but even more mysterious news boiled up in its place. Microsoft openly revealed that the One will require users to download all games to the console’s hard drive to play, but Wired’s Chris Kohler reported that to do this a second time with the same disc will require a player to pay an unspecified fee.

(See also: Xbox One: Microsoft’s Big Bid To Pwn The Living Room)

Microsoft quickly responded by saying that the Xbox One will “enable customers to trade in and resell games” and that the company will have more details to share later, likely at the Electronic Entertainment Expo next month. But the same spokesperson also added this ominous note in a comment to the game-news site Polygon:

Xbox One’s support for used games and these other scenarios may not look like they have on previous console generations, and that’s what we’ll be explaining as soon as we’re able.

That’s as clear as mud, of course. But tacking on fees for re-using an already-purchased game disk could seriously damage the used game market, or even kill it entirely. Not only would used games get more complicated to rebundle and price, resellers would likely offer less for used games in the first place.

That would antagonize retailers and consumers alike. It would be a giant step backward in an era where a game that provides maybe 8-10 hours of gameplay will still cost $60. Such a policy could even boomerang on game developers themselves, since many gamers finance their purchase of new games by trading in their old ones. If the trade-in market vanishes, so does that source of cash for new purchases.

The good news here is that a used game fee was “a surprise” to GameStop President Tony Bartel when he spoke to Polygon. Bartel went on to call the fee requirement “speculation.” In a separate statement to ReadWrite, the company replied, “GameStop is working closely with Microsoft to ensure there is an opportunity for customers to take advantage of our popular buy-sell-trade model and provide a seamless transition for consumers to enjoy the next generation of console gaming.”

(See also: Xbox One Photo Gallery)

While the Xbox One will be able to operate without an Internet connection, the always-online issue won’t go away entirely. Microsoft announced that it will be handing that ability over to publishers, who can designate certain game functions that will only work on Microsoft’s Azure cloud platform — in other words, effectively requiring an Internet connection to play.

This isn’t great news, especially considering Electronic Arts took the stage at the One unveiling. EA, voted the worst company in America two years in a row, recently tried to play nice with its consumer base by discontinuing its insane Online Pass program, which charged gamers a fee to access some online levels or items via a used game disk. But you can bet the company will be near the front of the line when it comes time to bake core game functions into the cloud to make an online-only gaming world an unavoidable, and unpleasant, reality.

Say Goodbye To Your Current Collection

So what about that huge library of Xbox 360 games you’ve collected so far? Sorry, those won’t work on the One. (PlayStation 3 games won’t work on Sony’s upcoming console, either, so there’s plenty of blame to go around on this front.)

But what about all those awesome indie games you’ve downloaded through Xbox Live Marketplace or the full 360 titles you bought digitally? Those will carry over, right? Nope. It turns out that only music, movies, and TV shows purchased through Xbox Live will follow you to the One. [Note: Microsoft’s Don Mattrick has responded to this aspect – see update further down].

Then there’s the Kinect. While it sports very impressive voice recognition and motion control, reports quickly surfaced that the updated camera-sensor combo will need to be plugged in at all times to use the One. For starters, that’s both annoying and a bit creepy, considering the Kinect will be on all the time watching everything you do. But this bit of news also suggests that the One itself might be pretty pricey, if it comes with the next-generation Kinect bundled.

Your Move, Sony

To be sure, Sony’s PlayStation 4 could be equally bad, or even worse; we won’t know until Sony really unveils it at E3 next month. For the moment, though, Sony at least stands a chance of offering a more consumer-friendly future for console gaming.

Is it inevitable that both the software and hardware we buy in the gaming realm, be it the new SimCity or the next-gen Xbox, are simply no longer ours to own, let alone to hack and mod and use in the way we’re most comfortable? Microsoft may not have come out and said so outright, but it’s certainly taken quite a few steps down that gloomy manufacturer- and publisher-dominated road.

Updated 10:15am on 5/22:When asked directly by Kotaku whether or not the Xbox One would have a time limit on its ability to play games offline, Microsoft Vice President Phil Harrison offered these fateful words:

Kotaku: If I’m playing a single player game, do I have to be online at least once per hour or something like that? Or can I go weeks and weeks?

Harrison: I believe it’s 24 hours.

Kotaku: I’d have to connect online once every day.

Harrison: Correct.

The company immediately backpedaled on Harrison’s statement, telling Polygon Wednesday morning that the comments represent only “potential scenarios,” adding, “…we have not confirmed any details today, nor will we be.”

Updated 11:40am on 5/22: When asked about backwards compatibility by The Wall Street Journal, Don Mattrick, head of Microsoft’s interactive entertainment business, said that only 5% of customers play old games on a new system and developing technology to accommodate those players was not worth it. “If you’re backwards compatible, you’re really backwards,” Mattrick added.

Photos by ReadWrite’s Taylor Hatmaker for ReadWrite