7 ms·

So, there is a defensible reason for this carve-out. For generations now, video game consoles have had very aggressive cryptographic pairing of parts, done in

by andjd 3y ago

So, there is a defensible reason for this carve-out. For generations now, video game consoles have had very aggressive cryptographic pairing of parts, done in the name of securing the hardware against hacking by the console owner. This is done to prevent mods to enable cheating and piracy. Given that consoles are often sold at a loss with profits recouped on game sales, there's a justification for this. Providing replacement parts for game consoles would also require tools to re-pair the replacement parts. If these tools need to be provided to independent repair shops, there's approximately a 100 % chance of them getting leaked and destroying the security of the console. I'm not going to say that this is a good or a bad thing. I'm just pointing out that there's a real reason for lawmakers to treat game consoles different than phones or computers, and that it isn't necessarily a sign of corruption.

avar 3y ago
Even if we accept this argument, the parts you're talking about are a tiny proportion of video game console parts. There's no reason you shouldn't be able to e.g. buy replacement analog stick parts.
Aerroon 3y ago
>Given that consoles are often sold at a loss with profits recouped on game sales I've wondered about this before: how is this not anti-conpetitive pricing? Is it okay because Sony/MS don't raise prices?
- dmoy 3y ago
  US law in that area looks more at consumer harm, not incidental harm to other companies, IIRC. There's a separate way to get in trouble here around predatory pricing, but I think that's more complicated (you have to be doing it specifically to drive people out of business). It depends on what the rest of the market does. See https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost-pricing https://www.ftc.gov/advice-guidance/competition-guidance/gui... Specifically > Pricing below a competitor's costs occurs in many competitive markets and generally does not violate the antitrust laws. Sometimes the low-pricing firm is simply more efficient. Pricing below your own costs is also not a violation of the law unless it is part of a strategy to eliminate competitors, and when that strategy has a dangerous probability of creating a monopoly for the discounting firm so that it can raise prices far into the future and recoup its losses. So > Is it okay because Sony/MS don't raise prices? Yes exactly this. See also: Printers sold below cost with expensive ink refills. E-readers, often Razors for shaving - the base or chassis or whatever you call it is often sold below cost.
  - Aerroon 3y ago
    Thank you!
    - dmoy 3y ago
      No problem, it's a good question, and it only works that way because of the particulars of US law. It differs for other countries, or even within the same country over time (the US's consumer focus was less strong in earlier years).
- criddell 3y ago
  The consoles-are-sold-at-a-loss explanation has always seemed like an extraordinarily week argument for giving Microsoft and Sony a pass on bad behavior. Their consoles may be sold at a loss at launch, but I don't know of any console hardware that wasn't net profitable over it's lifetime with the possible exception of the XBox with the ring-of-death problem.
pjc50 3y ago
This is also done for iPhones, which have not been exempted. The "security" of the console against "unauthorized" software is arguably against the public interest. Is it really to the customer's benefit to exclude software providers from the market? Haven't we been round this with app store discourse? > consoles are often sold at a loss with profits recouped on game sales This used to be true, but is it still true?
- kube-system 3y ago
  The purpose of gaming consoles is to play games, and allowing cheating software on them ruins the experience for others. Consoles are not general purpose computers, they have a specific use which is gaming, and it is reasonable to protect the fairness required to have a good experience when using it in the way it was intended to be used.
  - short_sells_poo 3y ago
    Phones are not general purpose computers, they have a specific use which is to communicate with people over a distance. See? But you can in fact turn it around, because both phones and games consoles are in fact general purpose computers that are able to execute any program, before the arbitrary limitations are imposed on them by the manufacturers.
    - kube-system 3y ago
      My point is that it is normal for special purpose devices to be regulated in such a way that prioritizes their primary purpose. And this is true for smartphones. The parts of your phone that must comply with telecom regulatory standards are locked down in black boxes separate from the main system.
      - lukeschlather 3y ago
        The problem is this doesn't prioritize their primary purpose. It ensures that the device will simply stop functioning within a relatively short time frame. This sort of crypto-locking of parts makes them impossible to fulfill their primary purpose when a part fails and the manufacturer won't sell a replacement part. It's unacceptable to brick devices in the name of cheat defense.
ndriscoll 3y ago
The trend of "securing" (i.e. sabotaging) hardware against the owner is a large part of why these laws are needed in the first place.
LocalH 3y ago
That heavy cryptography is why the Xbox One is shaping up to be the least preservable console we have ever seen.
hermannj314 3y ago
42488.2.f already mentions limitations in the bill to prevent overriding anti-theft. They could have extended that to include anti-piracy or anti-cheat or cryptographic pairing, but they didn't. They created a specific carve out for video game consoles and not for those other things you mentioned. When the government uses words generically to define its compelling interest to regulate, they are usually sincere. When the government uses words to protect an industry explicitly, they usually have been bought.
maerF0x0 3y ago
> at a loss with profits recouped on game sales and perhaps the FTC should be smashing down that practice as anticompetitive?
- fiddlerwoaroof 3y ago
  I don’t see how it’s anticompetitive: any startup trying to get into the space is going to be making the case for product-market fit in terms of things like subscriptions and selling access to developers. I’d think a one-time per customer console sale at a loss would be one of the easier expenditures to justify to investors.
bogwog 3y ago
Why must the government pass laws to protect the specific business model of exactly 3 mega corporations, a business model which harms consumers and harms competition? The DMCA exception for consoles is the same thing. The government is just taking these companies word for it, and harming everyone else. If Playstation/Xbox/Nintendo can’t survive without these handouts from the government, then why should they? It’s not like game consoles are a necessity. The free market is what should decide whether a business model succeeds or not. And regarding privacy, that’s bs. If consoles somehow become overrun with piracy, then publishers can just move their games to other platforms. PC is much easier to pirate on, is in general used by more tech savvy people, and it doesn’t have a rampant piracy problem. Steam wouldn’t be as successful as it is otherwise.

by andjd 3y ago

avar 3y ago

Even if we accept this argument, the parts you're talking about are a tiny proportion of video game console parts. There's no reason you shouldn't be able to e.g. buy replacement analog stick parts.

Aerroon 3y ago

>Given that consoles are often sold at a loss with profits recouped on game sales I've wondered about this before: how is this not anti-conpetitive pricing? Is it okay because Sony/MS don't raise prices?

dmoy 3y ago
US law in that area looks more at consumer harm, not incidental harm to other companies, IIRC. There's a separate way to get in trouble here around predatory pricing, but I think that's more complicated (you have to be doing it specifically to drive people out of business). It depends on what the rest of the market does. See https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost-pricing https://www.ftc.gov/advice-guidance/competition-guidance/gui... Specifically > Pricing below a competitor's costs occurs in many competitive markets and generally does not violate the antitrust laws. Sometimes the low-pricing firm is simply more efficient. Pricing below your own costs is also not a violation of the law unless it is part of a strategy to eliminate competitors, and when that strategy has a dangerous probability of creating a monopoly for the discounting firm so that it can raise prices far into the future and recoup its losses. So > Is it okay because Sony/MS don't raise prices? Yes exactly this. See also: Printers sold below cost with expensive ink refills. E-readers, often Razors for shaving - the base or chassis or whatever you call it is often sold below cost.
- Aerroon 3y ago
  Thank you!
  - dmoy 3y ago
    No problem, it's a good question, and it only works that way because of the particulars of US law. It differs for other countries, or even within the same country over time (the US's consumer focus was less strong in earlier years).
criddell 3y ago
The consoles-are-sold-at-a-loss explanation has always seemed like an extraordinarily week argument for giving Microsoft and Sony a pass on bad behavior. Their consoles may be sold at a loss at launch, but I don't know of any console hardware that wasn't net profitable over it's lifetime with the possible exception of the XBox with the ring-of-death problem.

pjc50 3y ago

This is also done for iPhones, which have not been exempted. The "security" of the console against "unauthorized" software is arguably against the public interest. Is it really to the customer's benefit to exclude software providers from the market? Haven't we been round this with app store discourse? > consoles are often sold at a loss with profits recouped on game sales This used to be true, but is it still true?

kube-system 3y ago
The purpose of gaming consoles is to play games, and allowing cheating software on them ruins the experience for others. Consoles are not general purpose computers, they have a specific use which is gaming, and it is reasonable to protect the fairness required to have a good experience when using it in the way it was intended to be used.
- short_sells_poo 3y ago
  Phones are not general purpose computers, they have a specific use which is to communicate with people over a distance. See? But you can in fact turn it around, because both phones and games consoles are in fact general purpose computers that are able to execute any program, before the arbitrary limitations are imposed on them by the manufacturers.
  - kube-system 3y ago
    My point is that it is normal for special purpose devices to be regulated in such a way that prioritizes their primary purpose. And this is true for smartphones. The parts of your phone that must comply with telecom regulatory standards are locked down in black boxes separate from the main system.
    - lukeschlather 3y ago
      The problem is this doesn't prioritize their primary purpose. It ensures that the device will simply stop functioning within a relatively short time frame. This sort of crypto-locking of parts makes them impossible to fulfill their primary purpose when a part fails and the manufacturer won't sell a replacement part. It's unacceptable to brick devices in the name of cheat defense.

ndriscoll 3y ago

The trend of "securing" (i.e. sabotaging) hardware against the owner is a large part of why these laws are needed in the first place.

LocalH 3y ago

That heavy cryptography is why the Xbox One is shaping up to be the least preservable console we have ever seen.

hermannj314 3y ago

42488.2.f already mentions limitations in the bill to prevent overriding anti-theft. They could have extended that to include anti-piracy or anti-cheat or cryptographic pairing, but they didn't. They created a specific carve out for video game consoles and not for those other things you mentioned. When the government uses words generically to define its compelling interest to regulate, they are usually sincere. When the government uses words to protect an industry explicitly, they usually have been bought.

maerF0x0 3y ago

> at a loss with profits recouped on game sales and perhaps the FTC should be smashing down that practice as anticompetitive?

fiddlerwoaroof 3y ago
I don’t see how it’s anticompetitive: any startup trying to get into the space is going to be making the case for product-market fit in terms of things like subscriptions and selling access to developers. I’d think a one-time per customer console sale at a loss would be one of the easier expenditures to justify to investors.

bogwog 3y ago

Why must the government pass laws to protect the specific business model of exactly 3 mega corporations, a business model which harms consumers and harms competition? The DMCA exception for consoles is the same thing. The government is just taking these companies word for it, and harming everyone else. If Playstation/Xbox/Nintendo can’t survive without these handouts from the government, then why should they? It’s not like game consoles are a necessity. The free market is what should decide whether a business model succeeds or not. And regarding privacy, that’s bs. If consoles somehow become overrun with piracy, then publishers can just move their games to other platforms. PC is much easier to pirate on, is in general used by more tech savvy people, and it doesn’t have a rampant piracy problem. Steam wouldn’t be as successful as it is otherwise.