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Xbox One pulls a 180: The Good and the Bad.

by on June 20, 2013
 

Fans’ anger, and the heavy amount of criticism aimed at Microsoft for the past weeks, has officially cracked the giant, into reconsidering its policies and strategies of its upcoming flagship console: The Xbox One.

Initially, as a short recap, the Redmond based group announced back at E3, that the market for used games would be severely limited and controlled, and in the same vein, lending games with friends would be particularly restricted. Xbox One also created this mandatory 24-hour internet connection check.

A wave of negative feedback from the specialized press and fans of the Xbox has finally changed new resolutions. In a recent Xbox blog post, the president of the interactive entertainment business at Microsoft, Don Mattrick clearly stated that these changes came “as a result of feedback from the Xbox community.”

Don Mattrick: Microsoft Studios

As gamers, where do we win in this change? The first step back is on the need for a permanent connection to the Internet. As stated on the official blog: “An internet connection will not be required to play offline Xbox One games – After a one-time system set-up with a new Xbox One, you can play any disc based game without ever connecting online again. There is no 24 hour connection requirement and you can take your Xbox One anywhere you want and play your games, just like on Xbox 360.”

Microsoft also reversed its redesigned policy on second-hand game, and sharing games with friends and families. “Trade-in, lend, resell, gift, and rent disc based games just like you do today – There will be no limitations to using and sharing games, it will work just as it does today on Xbox 360.” however digital games bought directly from Xbox Live cannot be resold.

So within one press release and statement, after a shower of hate messages, and pressure from the competition, Microsoft put itself back into the fight. But as an industry professional, especially someone who works in the distribution sector as well as in Middle East, we lose a lot.

Xbox E3 2013 Media Briefing

Originally all these changes that were to be implemented were in the good of the industry, and could’ve been the only way to survive the downfall of what the Music and Movies industry has been going through. You see the current business model of selling games at $60 doesn’t suffice for development studios to make enough money to sustain, as it was proved with Tomb Raider’s sales, which was according to Square Enix’s performance assessment, not enough.

Look at the credits of videogame nowadays; they are longer than movies. round up each of these mentioned employee’s paycheck, then you will notice that the numbers don’t work anymore.

Games nowadays need a lot of money to be produced, developed and then distributed. Some titles required the work of over two to even six different studios, as it was the case of Assassin’s Creed III, powered by different regional offices’ marketing and PR teams, as well as other key employees playing part in the production value. I mean look at the credits of videogame nowadays; they are longer than movies. So if we quickly do the math, round up each of these mentioned employee’s paycheck over the duration of development, production, and post production (additional content and such), then you will notice that the numbers don’t work anymore.

With Microsoft’s past Xbox One Used Games policies, would’ve sustained the cost of these developers for a longer time, as well as their publishers investing in them. Why do you think we are losing studios every year? Or we are getting more DLCs and micro-transactions? Or even too many sequels and reboots? Because publishers can’t take the risk of creating new games or concept anymore with the current industry model.

During an investor meeting at E3 this, EA’s Peter Moore explained that they are “aggressively getting out of the pre-order business. We’re looking at the customer more from an [Average Revenue Per User] perspective than a $60 perspective. We see a great opportunity to get $80 or $90 from that customer, but up-front it’s just $60.” Yes, if you read between the business terms, that mainly means more paid content and micro-transactions shoved in your face, to make extra money and sustain gain on a longer run.

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On another perspective, as distribution, these changes affect us. You see, I work in a region – Middle East – where we lose a lot of shares and money not because of the Used Market, or even the high ratio of piracy, but because of parallel importing. This means that retailers bypass a product’s official region distributor (in our case the Middle East) by buying the goods overseas, importing them, and selling them here. For that reason, a region locked Xbox One and its games would’ve been controlled by Microsoft, and its RRP prices instead of inflated ones, protecting the local customer and helping distributors grow.

A distributor’s growth is key to the region as whole, as it will invest more in key matters such as regional marketing activities such as the Middle East GAMES show, greater holiday value bundles, as well as fighting more for thing matters for the local customers including localizations of games.

A region locked Xbox One and its games would’ve been controlled by Microsoft, and its RRP prices instead of inflated ones, protecting the local customer and helping distributors grow.

The thing that most of people seems to have forgotten is that the full switch to digital is going to happen, and it’s inevitable. The Steam-like model will eventually be introduced to consoles, because it helps publishers as well as the developers to cut on cost that should be inexistent in our digital era. The Xbox team was clearly hoping that we as gamers were ready for the new digital age, and the competition did not jump on the boat, nor the consumer did.

Xbox Showcase Event

The PlayStation 4’s future vision is the same as the Xbox One when it comes to distribution, but Sony played the game well and strategically, winning the compassion of consumers by looking like the good guy with their PR slogans, and – immature, even though stating they didn’t target the competition – viral videos.

As a closing line to this, we realize that the internet has a voice, and that we should be proud of ourselves for making a change, as well as recognizing Microsoft for making the change, and thanking you for the feedback. Nevertheless, the end of the gaming industry as we know it is coming, but the plug has now been put back for just a couple more years.

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  • Ahmad Suliman
    June 20, 2013 at 4:10 PM

    You have a point in that, but in the older times when cars got invented people didn’t accept the idea of leaving their horses for a machine!
    Microsoft raised the bar and went to the next level with all things they proposed, showed and spoken about, so they had to stick to whatever they did till the end and just commit to it.

    The real battle is not the physical disks or anything else, it’s all about the online and downloadable content and updates, which even Sony restricted it and Microsoft as well!

    From what I see, the whole issue shouldn’t got addressed in the opening for something new and just focus on new things in terms of technology but not something that you can add in FAQs!

    Hopefully this will turn fine for them although they got the hit already.


    • Patrick Quinn
      June 21, 2013 at 8:09 PM

      I understand what your saying but to come out forcing you to download only was failed to begin with instead of offering both ways of doing business. The 24 hour all the time was doomed as well you have a lot of people who are off line for example the military they take there console to deployments and are a big consumer with cash flow that preorder. To them that was a slap in the face for their loyalty


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