6 ms·

That doesn't really work. The game is still supposed to be $60 at launch, that's when games make the most money, they really are worth that much (and more) as e

That doesn't really work. The game is still supposed to be $60 at launch, that's when games make the most money, they really are worth that much (and more) as evidenced by the many people who pay that much for them, even on DRM-laden platforms like Steam. The point is to let the price fall faster after launch. Xbox can't exactly promise "Our games' prices will fall faster than the other guys" because the market will determine that -- in aggregate they will, but there's a reason Skyrim is still $30 on Steam. Microsoft wants a world where you have account-locked games tied to disks, because it gives them the benefits of Steam-like DRM but also the game conveniently on a disk to take to a friend's so he doesn't have to download it, and to let the poor schmuck in rural Nebraska with 25 kb/s to play the game some time in the next week. Honestly, Sony can take the same pricing strategies as Microsoft on their digital downloads -- Microsoft just wants to have more convenient digital downloads, while Sony just wants more convenient disks. My guess is that long-term Microsoft will prove to be on the right side of history (the success of Steam is evidence). Sony can probably do just fine for now, they can always transition in later generations when the downsides are no longer breaking news stories.

ensignavenger 13y ago
The poor schmuck in rural Nebraska with 25kb service won't be able to play the Xbox One period- MS has already proposed a min speed of 1.5mbps. And if you are in an area (like pretty much most of the US and the majority of the rest of the world) where your service goes down periodically for more than 24 hours, you will be locked out of playing any games while it is offline. Or if MS gets hacked like Sony and their network goes down for an extended period (at least PS3 owners could still play offline!). Or when MS decides to abandon the platform ad turn off the servers... no pulling out your old Xbox One to play some classic games (I still have an old Atari I like to play occasionally!). Or if you have to cancel your Internet for a few months to catch up on the bills or while moving you have to wait a few days to get you Internet turned on- there are so many points of failure in this fiasco. As a (former) Xbox fan and advocate, I won't be going anywhere near this one.
- rsync 13y ago
  You have elegantly and succinctly described "defective by design".
- sigkill 13y ago
  >of 1.5mbps. Wow. There's this whole rest of the world that would kill to get that speeds. I'm confused as to why MS would try to alienate basically everyone not in NA, EU with that kind of a minimum requirement. People in Asia and Africa can pay up that kind of money for the console, but there aren't infrastructure to get you that kind of internet speeds in a budget.
  - gtirloni 13y ago
    There are PS1's being sold until today for people who can't afford the other version. My point is: I doubt XBOX360 will disappear. Got fast internet, crazy TV and can afford it? Get XBOX1. Your internet is really bad, XBOX360 just like always.
    - dragontamer 13y ago
      AKA: Microsoft does not have a competitive next-gen product for those without good internet connections. Like Soldiers, 35% of America... and even then, the larger part of Europe won't have servers for the XBox One launch. So even if you do have a good connection in say... Poland or Japan... you can't play XBox One at all.
- Zakharov 13y ago
  Are you sure that min. speed isn't just for multiplayer? I don't see why the call-home would know or care how fast your internet is.
  - jordanwallwork 13y ago
    You can use a mobile connection to check in, so clearly speed isn't an issue, I'm pretty sure that the 1.5mb min is just for multiplayer gaming
shock-value 13y ago
The thing is I really don't see Sony as being on the "wrong side of history" though since they are still having day-one downloads of all titles. They are just fully supporting both models (traditional discs and one-copy-per-user digital downloads) rather than forcing everyone into one. They are literally doing everything that MS is doing with digital, yet still having discs (and therefore offline play) as an option.
- benbeltran 13y ago
  Not only that, they went a step forward and made downloads even more appealing by allowing you to download the minimum possible to play the game, and just do the rest while you play.
gverri 13y ago
Sony will have digital sales too. But that doesn't mean they will neet to put restrictions on Disc Based transactions. If steam selled Disc Based games I very much doubt they would adopt the same model.
- daeken 13y ago
  > If steam selled Disc Based games I very much doubt they would adopt the same model. Valve does sell discs for their games, and they're just ways of delivering bits for Steam. The DRM is 100% identical in every way.
  - anoncow 13y ago
    So the PS4 is Steam for consoles with offline support. Best of both worlds.
nknighthb 13y ago
The reality is that nobody cares about the poor schmuck in rural Nebraska. 80% of the US population is urbanized. Most of the ones that aren't still have access to DSL, cable modems, or fixed wireless of at least a few megabits. Of the remaining population, a lot of them don't want to play video games or can't afford them anyway. Some (probably large) portion of those that are viable gaming customers will simply make do with satellite connections. The "poor schmuck in rural Nebraska with 25kb/s" market segment is just too small to economically justify catering to.
- shock-value 13y ago
  That isn't actually the reality. For example, if nothing else, it's clear that Sony does care about the poor schmuck in rural Nebraska. But more generally, why are you only talking about the United States? What you are saying might be true of the US, but plenty of places across the wider world are home to people who play video games but don't have an internet connection. Or have a spotty internet connection. Or have a connection with restrictive data caps (meaning digital download only would be impossible).
  - nknighthb 13y ago
    Much of the first world is better connected than the US. If you're talking about gamers with both money and poor connections, they're far more likely to be in the US than anywhere else.
    - smutticus 13y ago
      South Africa and many countries in Latin America can afford to pay $400 for the console. But they certainly can't count on a >1.5mb/s reliable internet connection. So yeah, MS screwed the pooch on this one and that will now all be Sony territory.
      - nknighthb 13y ago
        I'm not going to canvass all Latin American countries, but the median per-capita income for South Africa is about US$500. Are you unwittingly basing your comment on the standards of the still-privileged White minority, comprising less than 9% of a country of just 53 million?
scld 13y ago
Did you read the link? The point is that they AREN'T really worth that much. My brother buys his xbox games (I stick with PC/Steam mostly) from gamestop and trades them in within a week or two if the multiplayer isn't exciting. So, to him, a game is NOT worth 60 bucks. The 60 dollar price point has nothing to do with him. He pays between 30 and 40 max, usually only playing B rated single player games years after the fact. Adding DRM isn't going to magically increase the value of a game to the customer. That's not how a market works. The market currently has decided that a video game is worth something per person, on average. Let's call that $40 per game (just an example). So, with the DRM, you sell two $60 games for every three $40 games. Still the same $120 except it all goes to you instead of the first sale to you and the next two to Gamestop. If MS can assume (or predict, or hope, or whatever) that more of their sales will go directly to them, then they have an incentive to drop the price of their copies of the game because they know that a gamer probably has a fixed budget for gaming and they want to maximize their value. I don't have numbers but I would be interested in seeing what the average price per console game actually paid by a customer is. My hunch is that the DRM isn't expected to increase the overall sales, in fact they might decrease BY DESIGN. But MS doesn't care about overall game sales. They care about 1st sales. So they might get a bigger piece of a smaller pie and still make out in the end. Sidenote, Steam's success came from no legit competition, better prices (allowable, in part, by their DRM) and great marketing but I agree that Microsoft's strategy is more likely long term. ....all in all, though, it just feels shitty to have something physical in my hand that I can't really sell to someone if I want.
- sirclueless 13y ago
  This is price discrimination at work. It's basic economics 101 that monopolists or duopolists (such as Steam in PC games, or Microsoft and Sony in consoles) in a market will price their goods above the actual marginal cost of their goods, thus undersupplying the market. They would like to charge lower prices to some customers -- they are happy to sell to your brother for $30 because it's certainly well above their marginal costs. Unfortunately, it takes an awful lot of market power to be able to charge different prices to different consumers. Otherwise you will just have people arbitraging away all your profits (case in point, the folks who do a thriving business buying Steam games in the US region and trading them to folks in Australia and Germany). Anyways, long story short, it's really hard to price discriminate in typical markets, because it's both really hard to figure out which of your customers will pay full price, and it's really hard to stop the people who get discounts from reselling to the full price folks. But, if your market is digital, flash-in-the-pan pop culture items, then you have a market that's pretty much tailor-made for price discrimination. Who will pay $60 for a game? Well, the ones who buy it on launch, or pre-order for nominal bonuses. How do you stop the the people who buy at a discount from selling to those who pay full price? Two ways -- you attach the game via DRM to an account that is inconvenient to transfer, and you only sell the discounted copies 2 years later. Sales are also a good way to do this -- many people who buy games in sales either were waiting for a sale because the price was too expensive, or heard about the game because of the sale and wouldn't have bought the game otherwise. The current status quo is that all the profit from the $30 customers is going to GameStop. Microsoft would rather it go to themselves and their developers, so they would rather have digital downloads. Not so they can stop games from being sold at $30, just so that they can sell games themselves at that price without killing their market.

ensignavenger 13y ago

The poor schmuck in rural Nebraska with 25kb service won't be able to play the Xbox One period- MS has already proposed a min speed of 1.5mbps. And if you are in an area (like pretty much most of the US and the majority of the rest of the world) where your service goes down periodically for more than 24 hours, you will be locked out of playing any games while it is offline. Or if MS gets hacked like Sony and their network goes down for an extended period (at least PS3 owners could still play offline!). Or when MS decides to abandon the platform ad turn off the servers... no pulling out your old Xbox One to play some classic games (I still have an old Atari I like to play occasionally!). Or if you have to cancel your Internet for a few months to catch up on the bills or while moving you have to wait a few days to get you Internet turned on- there are so many points of failure in this fiasco. As a (former) Xbox fan and advocate, I won't be going anywhere near this one.

rsync 13y ago
You have elegantly and succinctly described "defective by design".
sigkill 13y ago
>of 1.5mbps. Wow. There's this whole rest of the world that would kill to get that speeds. I'm confused as to why MS would try to alienate basically everyone not in NA, EU with that kind of a minimum requirement. People in Asia and Africa can pay up that kind of money for the console, but there aren't infrastructure to get you that kind of internet speeds in a budget.
- gtirloni 13y ago
  There are PS1's being sold until today for people who can't afford the other version. My point is: I doubt XBOX360 will disappear. Got fast internet, crazy TV and can afford it? Get XBOX1. Your internet is really bad, XBOX360 just like always.
  - dragontamer 13y ago
    AKA: Microsoft does not have a competitive next-gen product for those without good internet connections. Like Soldiers, 35% of America... and even then, the larger part of Europe won't have servers for the XBox One launch. So even if you do have a good connection in say... Poland or Japan... you can't play XBox One at all.
Zakharov 13y ago
Are you sure that min. speed isn't just for multiplayer? I don't see why the call-home would know or care how fast your internet is.
- jordanwallwork 13y ago
  You can use a mobile connection to check in, so clearly speed isn't an issue, I'm pretty sure that the 1.5mb min is just for multiplayer gaming

shock-value 13y ago

The thing is I really don't see Sony as being on the "wrong side of history" though since they are still having day-one downloads of all titles. They are just fully supporting both models (traditional discs and one-copy-per-user digital downloads) rather than forcing everyone into one. They are literally doing everything that MS is doing with digital, yet still having discs (and therefore offline play) as an option.

benbeltran 13y ago
Not only that, they went a step forward and made downloads even more appealing by allowing you to download the minimum possible to play the game, and just do the rest while you play.

gverri 13y ago

Sony will have digital sales too. But that doesn't mean they will neet to put restrictions on Disc Based transactions. If steam selled Disc Based games I very much doubt they would adopt the same model.

daeken 13y ago
> If steam selled Disc Based games I very much doubt they would adopt the same model. Valve does sell discs for their games, and they're just ways of delivering bits for Steam. The DRM is 100% identical in every way.
- anoncow 13y ago
  So the PS4 is Steam for consoles with offline support. Best of both worlds.

nknighthb 13y ago

The reality is that nobody cares about the poor schmuck in rural Nebraska. 80% of the US population is urbanized. Most of the ones that aren't still have access to DSL, cable modems, or fixed wireless of at least a few megabits. Of the remaining population, a lot of them don't want to play video games or can't afford them anyway. Some (probably large) portion of those that are viable gaming customers will simply make do with satellite connections. The "poor schmuck in rural Nebraska with 25kb/s" market segment is just too small to economically justify catering to.

shock-value 13y ago
That isn't actually the reality. For example, if nothing else, it's clear that Sony does care about the poor schmuck in rural Nebraska. But more generally, why are you only talking about the United States? What you are saying might be true of the US, but plenty of places across the wider world are home to people who play video games but don't have an internet connection. Or have a spotty internet connection. Or have a connection with restrictive data caps (meaning digital download only would be impossible).
- nknighthb 13y ago
  Much of the first world is better connected than the US. If you're talking about gamers with both money and poor connections, they're far more likely to be in the US than anywhere else.
  - smutticus 13y ago
    South Africa and many countries in Latin America can afford to pay $400 for the console. But they certainly can't count on a >1.5mb/s reliable internet connection. So yeah, MS screwed the pooch on this one and that will now all be Sony territory.
    - nknighthb 13y ago
      I'm not going to canvass all Latin American countries, but the median per-capita income for South Africa is about US$500. Are you unwittingly basing your comment on the standards of the still-privileged White minority, comprising less than 9% of a country of just 53 million?

scld 13y ago

Did you read the link? The point is that they AREN'T really worth that much. My brother buys his xbox games (I stick with PC/Steam mostly) from gamestop and trades them in within a week or two if the multiplayer isn't exciting. So, to him, a game is NOT worth 60 bucks. The 60 dollar price point has nothing to do with him. He pays between 30 and 40 max, usually only playing B rated single player games years after the fact. Adding DRM isn't going to magically increase the value of a game to the customer. That's not how a market works. The market currently has decided that a video game is worth something per person, on average. Let's call that $40 per game (just an example). So, with the DRM, you sell two $60 games for every three $40 games. Still the same $120 except it all goes to you instead of the first sale to you and the next two to Gamestop. If MS can assume (or predict, or hope, or whatever) that more of their sales will go directly to them, then they have an incentive to drop the price of their copies of the game because they know that a gamer probably has a fixed budget for gaming and they want to maximize their value. I don't have numbers but I would be interested in seeing what the average price per console game actually paid by a customer is. My hunch is that the DRM isn't expected to increase the overall sales, in fact they might decrease BY DESIGN. But MS doesn't care about overall game sales. They care about 1st sales. So they might get a bigger piece of a smaller pie and still make out in the end. Sidenote, Steam's success came from no legit competition, better prices (allowable, in part, by their DRM) and great marketing but I agree that Microsoft's strategy is more likely long term. ....all in all, though, it just feels shitty to have something physical in my hand that I can't really sell to someone if I want.

sirclueless 13y ago
This is price discrimination at work. It's basic economics 101 that monopolists or duopolists (such as Steam in PC games, or Microsoft and Sony in consoles) in a market will price their goods above the actual marginal cost of their goods, thus undersupplying the market. They would like to charge lower prices to some customers -- they are happy to sell to your brother for $30 because it's certainly well above their marginal costs. Unfortunately, it takes an awful lot of market power to be able to charge different prices to different consumers. Otherwise you will just have people arbitraging away all your profits (case in point, the folks who do a thriving business buying Steam games in the US region and trading them to folks in Australia and Germany). Anyways, long story short, it's really hard to price discriminate in typical markets, because it's both really hard to figure out which of your customers will pay full price, and it's really hard to stop the people who get discounts from reselling to the full price folks. But, if your market is digital, flash-in-the-pan pop culture items, then you have a market that's pretty much tailor-made for price discrimination. Who will pay $60 for a game? Well, the ones who buy it on launch, or pre-order for nominal bonuses. How do you stop the the people who buy at a discount from selling to those who pay full price? Two ways -- you attach the game via DRM to an account that is inconvenient to transfer, and you only sell the discounted copies 2 years later. Sales are also a good way to do this -- many people who buy games in sales either were waiting for a sale because the price was too expensive, or heard about the game because of the sale and wouldn't have bought the game otherwise. The current status quo is that all the profit from the $30 customers is going to GameStop. Microsoft would rather it go to themselves and their developers, so they would rather have digital downloads. Not so they can stop games from being sold at $30, just so that they can sell games themselves at that price without killing their market.