Xbox One, PS4: Welcome to the Draconian Age Part 2

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Microsoft finally pulled the cover off the next iteration of the Xbox — the Xbox One — and rumors that have been swirling about a more restrictive attitude toward players having the ease and choice of using pre-owned, second-hand software were solidifed.

Sony made similar, but much more vague, statements concerning the PS4, although without quite the ‘oh, it’s no big deal’ arrogance MS took in their unveiling. (You can check out the first half of this discussion in Part 1.)

What makes Microsoft feel like they’re going to be able to push across-the-board DRM on Xbox gamers?

Simple: HaloCall of DutyGears of War.  And the fact that so many Xbox gamers are addicted to Achievements and Gamerscore.

With the unholy trinity of Halo / CoD / Gears, MS is betting that the audience they’ve accumulated for the multiplayer components for those games alone, in which the average player probably spends dozens if not hundreds of hours playing just that game connected to the internet, means this segment of the audience isn’t going to give a damn about additional rules and conditions that apply to other games.

This is the audience who runs out every time these games are offered and buys them brand new at $60 a pop (or more for collectors’ editions) in record-setting numbers year in and year out, is willing to part with additional money for DLC and additional features, and are they really going to switch brands at this point, have to repopulate their Friends lists and reorganize their clans?  (Which is an option that’s only available to COD players, since Halo and Gears are both platform exclusives.)

And are the gamers who have spent the last seven years chasing Achievements and building up their Gamerscore going to jump ship to Sony and give all that up for starting over at zero with nondescript knock-off Trophies and trust that Sony will be able to make the PlayStation 4 online experience run as smoothly and dependably as Xbox Live?

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MS will make this work, at least to some extent.

I’m not saying the folks who play these particular multiplayer games, or are ‘achievement hunters’, are mindless zombies, but they’re going to weigh the pros and cons and they may very well come to the conclusion that a cheap pre-owned copy of GTA V isn’t worth the hassle.  The $60 a year they’re getting from each one of these players for Live membership will go a long way to offset loss of revenue from angry ‘turncoats’ who flock to the PS4 instead of the Xbox One.  The infrastructure for Xbox Live was paid off years ago, now it’s all profit.

Especially if Sony institutes the same DRM conditions for PS4 titles, which at this point, seems likely.

(Although if ANYONE  who is a major decision maker at Sony has a single properly functioning neuron between the entire executive suite, they should really be salivating at the opportunity to drop their DRM plans, be more consumer friendly and bury serrated blades in Microsoft’s face, Kratos-style, on day one.  If there was ever a time for Sony to drop a figurative nuke on Redmond, this is it, and do it before Bungie gets Destiny out, if you really want to funnel ‘Xbots’ into PSN.)

Oh, and MS’ plans to watch over gamers, and make sure they’re playing the proper admission fees, extends beyond games.  MS has applied for a patent that will allow the Kinect sensor — which is now a required feature of the hardware that must be plugged in and recognized by the console for it to function — to monitor how many individual people are in the room during video playback.

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Other than getting off on a Big Brother fetish, what application does that have?

Simple: when you’re using VOD, your purchase or rental price may depend on how many people are sitting in your living room.  Start watching, say Iron Man 3, with just you and your significant other, then a couple friends or family members happen to drop by?

Kinect will be able to detect their presence, and can force the playback to stop, prompting you to pay an additional fee to continue because the size of the audience watching the film has increased, or you’ll just have to wait until your guests leave to finish the flick.

Will MS implement that feature?

Sure — if they feel they can get away with it.  And you better believe they’ll be using that as a selling point to folks in Hollywood in order to arrange for exclusive sweetheart deals with content providers.

As far as Sony goes, they don’t have the safety net of tens of millions of paid online subscriptions, so dabbling in DRM is even more of a risk for them, but it also makes a little more sense — they publish far more first-party software than MS does.  Other than Forza, Fable, Halo and Gears of War, MS has completely sunk their development interests into Kinect-only games.  To me, Sony wanting to protect that investment seems a more sound reason than MS’ motivation, which is just to get their fingers into every single Xbox-related transaction that involves anyone they do business with as a game publisher.

You know, I can almost get behind the idea of coming up with a better and more fair system for pre-owned games so that developers and publishers can get a cut of those sales, even if that makes the games cost a little more.  Which is why I didn’t have a problem with the Online Pass system — if we’re using the servers to play the game, which is an ongoing cost for the publisher, we should put a little extra into the jar.

I could also get behind the same developers and publishers streamlining their development and publishing process and figuring out a way to cut costs so they can bring the price of a new game down from $60 to a more attractive price point, too, which would take a lot of steam out of rentals and pre-owned sales by making purchasing a new copy of a game a better value.

Oh, and for console manufacturers to do away with the business model of planned obsolescence and plan for a console to have a much longer lifespan than five or six years to help developers and publishers find a new economic model that allows them to be more profitable in making games and not forcing them to upgrade their tech, buy new development kits that run $20,000 and plus a pop, and eliminate costly R & D in how to make games for new hardware.

I haven’t been playing many games recently because I’ve been so busy having my fingers in a lot of different creative pies and there’s barely time in my daily schedule for sleep, let alone much in the way of R & R.  The most recent console releases I’ve played are Halo 4, Borderlands 2, Tekken Tag Tournament 2, and Dead or Alive 5, and frankly, those games look fantastic.

To me, there’s no need for more powerful game hardware.

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Instead, we’ve got plans to try to electronically modify our behavior in order to make more profits.  If someone had written out the Xbox One unveiling as a prose parody, without changing a single word of it to make it more untrue or outlandish just for laughs, I’d have still thought it was the smartest satire I’ve read in years.

This whole DRM scheme, if adopted by both Sony and MS, could have some seriously detrimental effects to the industry as a whole, because it’s wholesale intentional manipulation of an already fragile economic system.

You can’t just change the concept of supply and demand as they apply to pre-owned games overnight — whether you like it or not, pre-owned games and the ability to lend and borrow games is part of the way we consume this particular content, and while there are probably enough hardcore gamers who would buy in with severe restrictions and grumble, there are entire ‘classes’ of gamers who do depend on the cycle of buying or selling games to allow them to participate in this sector.

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While both Sony and MS have clearly stated they’re not going to take away pre-owned games, they are going to strongarm their way into not only Gamestop’s turf, but also the individual consumer who might choose to unload a game by selling it directly to a friend or to a stranger on eBay.  They are going to essentially dictate what a game is re-sold for by determining what the price of a ‘license’ for a secondhand copy will be, and how much you, as the consumer, will get for your sale.

If, for instance, the license fee on a copy of, say, Street Fighter V is $20, that means anyone who is planning on selling or trading in this game or purchasing a pre-owned copy is going to have to work around this non-negotiable number that has absolutely nothing to do with natural, consumer-driven curves of supply or demand.  Capcom, as the publisher, will get a cut of this money, the development team might get some of it, and MS or Sony will get the rest.

So let’s say you buy SFV and you decide you just don’t like it.  Maybe you’d rather unload it and use that money toward buying the new Mortal Kombat instead.  Well, a new copy of SFV is going for $60, so with a mandatory $20 license fee tacked on that the new owner will have to pay to play the game, you won’t get more than $40 for it.  Gamestop can’t sell it for more than $40, because the consumer is going to have to buy a $20 license to play the game, so that will affect the value of your trade-in.

And here’s an interesting thought — if you buy a pre-owned game, how are you going to verify that the previous owner did actually sign off on transferring their license?  So you buy that copy of SFV from eBay, and maybe you get it for $25 — a steal — and you pop it in your Xbox One and find out that the license still belongs to another Gamertag.  If you want to play it, you’ll need to pay $60 — not $20, because the console and the servers behind it doesn’t know that you didn’t just borrow this game from someone and that they actually want to sell their license.

Sure, you can complain to eBay or report the seller to MS (or Sony, assuming they go along with this on the PS4), but how many hoops are people going to jump through before they just swear off trying out new games they’re unsure of  . . . which publishers and developers already complain about the fact of how hard it is to launch new IP because it’s an untested quantity.

How many ‘new’ games do you think we’re going to get if people get burnt once or twice and just decide it’s not worth it to give something they’ve never seen before a chance?

You think we see a lot of sequels now, just wait until gamers feel like they’re being punished for trying new games and publishers just throw their hands up and start putting out Assassin’s Creed and Call of Duty twice a year.

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Or, maybe that gamer would’ve bought the game if it was a little cheaper and now they’ll just rent it (and maybe pay $5 for that from a Redbox kiosk, because now MS and Sony have forced Redbox to up their prices in order to cover a surcharge to obtain temporary rental licenses for each user that tries to play that disc).

Because it’s $5 a day for a rental, the gamer doesn’t want to spend more than a couple hours trying it out before returning it, decides the game’s not worth it, and won’t buy it, period, pre-owned or new.

If people STOP BUYING NEW GAMES, CAN’T BUY AS MANY NEW GAMES BECAUSE YOU’VE MESSED WITH THEIR ABILITY TO TRADE GAMES IN, OR BECOME MORE HESITANT THAN THEY ALREADY ARE BECAUSE TRADE-INS FOR GAMES THEY DIDN’T LIKE ARE JUST A GIANT PAIN IN THE ASS, THIS IS NOT A SOLUTION TO LOSSES FROM PRE-OWNED SALES, corporate executards.

Driving consumers away or pricing your products to be out of reach to large swaths of your demographics is not really a fantastic, forward-looking business strategy, nor is arrogantly assuming that your product is so essential that your customer will do whatever it takes to keep using your products and services rather than go without.

I would think that most entry-level Gamestop sales associates with no more formal business education than a GED would be able to see that.

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I also think this is really dirty pool that seems almost completely focused toward putting Gamestop out of business and punishing them for helping popularize videogames.  If Sony and MS can mess with the pricing of used physical copies of games and steer consumers toward digital downloads of games instead of buying them on disc, they could set the pricing of the downloads to have an unfair competitive edge over Gamestop, as there’s only two parties that need to share the money from a digital sale — the platform holder, and the game publisher.  Removing the physical components of a disc, a plastic case and paper label, as well as shipping and storage of these items can also increase profitablity.

They could easily drop the prices of direct downloads of retail games over Xbox Live and PSN and still maintain profits because they don’t have a third-party to cut in to the point where Gamestop, as well as other retailers, have difficulty matching them.  With direct downloads they could even institute a rental system where you pay to play through a game in increments rather than an outright purchase, which takes money away from Gamefly and Redbox.

That might even be advantageous to the consumer — they can digitally track how much time total you’re playing a game rather than just dole it out into 24-hour increments, so a single rental period can be stretched across several days, if you only play an hour or two a day.

Sounds good, doesn’t it?  Until you factor in that without actual competition to determine prices, they can charge whatever they want.  They could manipulate prices to drive Gamefly and Redbox out of the rental business.  That’s the benefit of a monopoly.

Say what you want about Gamestop — it’s a fun pastime to bash them — but they’re staffed by people who live in your neighborhood, their wages and the sales at their brick and mortar locations help pay local taxes and goes back into your community: their employees may spend money they earn that helps you keep YOUR job.

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I’m not in the market for either the Xbox One or PS4, to be honest.  I can barely find time to engage in the huge backlogs of PS3 and 360 games I have, so I’m set for a good couple of years.  I was a huge Xbox fan from day one — although I will freely admit, the constant attempts to shove Kinect down my throat over the last two years have been grating — but from this point forward, I’m done with the brand.

I wish I hadn’t recently re-upped for Live for another year, but once that’s done, I’m out, and I’ll be using my PS3 for my Netflix and VOD.  I was really excited to try out the new zombiefest State of Decay XBLA title, but that’s off the table, and any further current gen games I buy will be on PS3 — even if Sony does turn around and end up doing the same thing, they’re still the lesser of two evils here.

In fact, when I do turn my 360 on and I don’t need to be online to play with a friend, I’m yanking the ethernet cable out of the back so that MS doesn’t get credit from the sponsors of the advertising they’ve vomited all over the dashboard menus.

I don’t know if that counts as an endorsement for the PS4, but for any of you planning on going next gen, you better think long and hard about who you support this fall when you pull out your wallet.

Because in a couple years when we’re all getting teabagged, it’ll be you early adopters’ fault, and I don’t want to say a muffled “I told you so” through armored Spartan crotch.

— mal

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