Just how badly does Microsoft want the Xbox One to fail

[TinCow]

I completely reject the "think of the poor developers" argument. Can anyone think of a game that hasn't been pirated? Usually what happens is honest purchasers get saddled with obtrusive DRM and days later, the pirated version comes out without any DRM. The result is that often times, paying customers get an inferior product than the pirates do...

Well, that's you. I personally know developers, so I do think of it. Game devs are just as heavily abused by their industry as musicians. These people are devoting their lives, often upwards of 60-80 hours a week, to creating our entertainment, but they get paid crap and have horrible job security. Certainly the publishers themselves are partially responsible for this, just as in the music industry, but piracy sure doesn't help the situation.

Publishers waste time and money adding DRM to games that only serve to annoy paying customers. In what world does that make sense?

In a world where they make more money by adding it than by not adding it. I don't understand why gamers have this mental block on the idea that a capitalist economic system doesn't apply to the games industry. It's just one of many options in the entertainment sector. The time you spend playing games is time you cannot spend in other areas of the entertainment sector, such as television, cinema, sporting events, etc. Industry profits depending on being competitive internally amongst other game companies, and also externally against other forms of entertainment. If their profits are rising, then the consumers are saying that they are providing a competitive service. If their profits are falling, then the consumers are saying that they are not providing a competitive service. Why do you expect the games industry to be altruistic in a manner that no other industry is?

In any case, the idea that the DRM "only serve[s] to annoy paying customers" is fundamentally false. There are many great things about a good DRM system that actively add things to the gaming experience. Look at all the extra stuff you get by using Steam as an example. I personally stopped pirating ALL games about 5-6 years ago because I felt that the benefits I got out of using digital distribution outweighed the costs. I actively prefer to pay for a game on Steam than to pirate one, even when you take my game-dev friends out of the picture. I am not the only person who feels this way, so clearly not all of us are annoyed by all DRM. There are plenty of DRM methods that truly DO annoy me. I've actively avoided EA, Ubisoft, and Microsoft products because of their DRM systems before, but the fact that some companies have created crappy DRM systems doesn't prove that all DRM is annoying everyone.

[drone]

What Super Meat Boy dude said.

Valve has done the rare thing and added value to their DRM system, this is why it's the best one out there. Again this is because Valve is an anomoly. Most large companies use their DRM to extract value, through egregious activation limits, planned obsolecense, forced ads, etc. If/when Valve gets bought out/goes public/Gabe dies, digital distribution is going to become a nightmare.

[TinCow]

What Super Meat Boy dude said.

Valve has done the rare thing and added value to their DRM system, this is why it's the best one out there. Again this is because Valve is an anomoly. Most large companies use their DRM to extract value, through egregious activation limits, planned obsolecense, forced ads, etc. If/when Valve gets bought out/goes public/Gabe dies, digital distribution is going to become a nightmare.

His statement is very good and I agree with what he says as well, particularly this bit:

I do believe people are less likely to pirate your software if the software is easy to buy, easy to run, and does what is advertised. You can’t force a person to buy your software no more than you can prevent a person from stealing it. People have to WANT to buy your software, people have to WANT to support you. People need to care about your employees and your company’s well being. There is no better way to achieve that than making sure what you put out there is the best you can do and you treat your customers with respect.

Valve provides a service at a level where I actively want to support them, and the developers whose games they distribute. If in some future day Valve turns to the dark side and becomes crap, then perhaps I shall no longer feel that way and perhaps I shall return to pirating games. However, that's kind of beyond the point. This is not like with a government where once power has been gained, it becomes very difficult to take it away. You're talking about a business that relies on income. If the business model becomes poor and the services they provide are poor, then the business model will change or the company will collapse. SimCity itself demonstrates what happens to a company when they provide a poor quality product. You really don't need to fear the amorphous Evil Valve future because if that time comes, there will be other options, legal or illegal, to get what the consumer wants in a way that is pleasing to them.

At the end of the day, Valve has proven that DRM can be done in a positive and constructive way. The problem isn't DRM itself, it's bad DRM. Bad DRM does exactly what Mr. Refenes says. Valve's DRM works because the actual DRM aspect of it is incidental to the service. Valve created a system that added massive amount of customer convenience in many areas. The fact that it also operates as DRM is a side-benefit for them. That wasn't its intention when it was created, it was only designed to address inconsistent patching issues for Valve's own games to improve multiplayer connectivity and to resolve bugs. Over time that turned into a general digital distribution system. That's why we love Steam: DRM wasn't the purpose, even if it's part of the result. This discussion is about the XBone and whether their connectivity system is rage-quit worthy or not. For some reason people are getting a bit hysterical because it has DRM features, and they're largely skipping over the conversation about whether the online connectivity system that Microsoft has added is good as a whole. I'm not saying that MS has done it right; quite the opposite, I think that the 24 hour check-in thing is extreme and likely a very poor decision. However, I feel like I'm one of the few people actually analyzing the system as a whole instead of just going OMG DRM ALT F4.

[Xiahou]

At the end of the day, Valve has proven that DRM can be done in a positive and constructive way. The problem isn't DRM itself, it's bad DRM. Bad DRM does exactly what Mr. Refenes says. Valve's DRM works because the actual DRM aspect of it is incidental to the service. Valve created a system that added massive amount of customer convenience in many areas. The fact that it also operates as DRM is a side-benefit for them.

Bingo. Your last post sounded like you were saying you buy from Steam because of DRM. But, you're really buying from Steam because it's a convenient distribution method that includes other useful features. If it didn't have DRM- if you could play single-player games without having to launch Steam first -I don't think you'd find any gamers boycotting Steam. It's not the DRM you want- it's the features and convenience that Steam offers. I don't know of anyone who would refuse to buy a game because it didn't have DRM. But I know of lots of people who refuse to buy certain games because they do have DRM.

That's the point Refenes was making. DRM itself is always going to be a bad investment. You (the publisher) are spending money on something that will bring you no tangible returns and will likely alienate customers. Don't worry about the DRM and instead worry about taking care of your customers and making them want to buy from you.

[TinCow]

DRM itself is always going to be a bad investment.

This is wrong. Refenes is correct that it is, at least right now, impossible to quantify the amount of money lost due to piracy. However, that does not mean that money is not lost. Some certainly is, and he admits as much. The problem is that, since the amount lost cannot be known, companies take a risk when they pay to add DRM to a game. That risk is that the amount they are paying to add the DRM will be greater than the amount they will gain from fighting piracy. While it may be risky though, there's still a dollar value on both sides of it, and thus it's entirely possible for a DRM to be less expansive than the amount of money it recoups. I'd accept the argument that DRM is usually a bad investment, particularly the massive glossy UI overlay, constantly server-managed types like Origin and Windows Live. However, usually is not always. I'd point to Minecraft as an example of DRM that is likely profit-positive. Its DRM is very minimal, amounts to nothing more than a single login check, and basically does not get noticed beyond the rare situation when the login server is down for a short period. There are, of course, no ways for us to estimate the amount of money that Mojang has saved with that method, but due to the relatively low cost of the system and their massive sales, I'd be willing to bet that they're in a net positive. So, no, DRM is not ALWAYS a bad investment.

[drone]

This discussion is about the XBone and whether their connectivity system is rage-quit worthy or not. For some reason people are getting a bit hysterical because it has DRM features, and they're largely skipping over the conversation about whether the online connectivity system that Microsoft has added is good as a whole. I'm not saying that MS has done it right; quite the opposite, I think that the 24 hour check-in thing is extreme and likely a very poor decision. However, I feel like I'm one of the few people actually analyzing the system as a whole instead of just going OMG DRM ALT F4.

From a business standpoint, Microsoft is trying to do the following things with the XBone and the necessary internet connectivity:

• Place DRM control on games to prevent casual piracy.
• Sell games through their marketplace.
• Sell more games through reselling and sharing restrictions, as well as planned obsolecense.
• Push ads to the consumers (probably by uploading to MS your habits and then downloading targeted ads back).
• Boil frogs. Eventually connectivity will be required fulltime, and no sharing allowed.

The plan all along has been to control the living room by being the set top box. DVD/Blueray player, DVR, streaming movies, games, internet, just one central entertainment device. Most of that requires internet access for proper usability, if they can attempt to solve content-related control problems with fulltime connectivity they will. The built-in survellience tool is just an added bonus.

[TinCow]

The plan all along has been to control the living room by being the set top box. DVD/Blueray player, DVR, streaming movies, games, internet, just one central entertainment device. Most of that requires internet access for proper usability, if they can attempt to solve content-related control problems with fulltime connectivity they will. The built-in survellience tool is just an added bonus.

Quite right and, from a business standpoint, quite sensible. The 360/PS3 battle was fought as much for the media center as it was for the gaming console. When it came out, the PS3 was the cheapest Blu-ray player on the market, and many, many people use their 360/PS3 as their main media interface boxes. That's a increasingly significant market these days, and it's only going to grow more so. Cable and satellite companies provide basic boxes, but the reality is that they are pretty crappy. None of us want to have 3-4 different boxes sitting under our televisions. It's 2013 FFS, we want convergence in all electronics, and our entertainment centers are no exception. The only console I've owned since the NES is a Wii, and the Wii purchase was exclusively because of my wife. That said, I probably would have picked up a 360/PS3 to use as a media center if I hadn't become a TiVo addict years ago. My main TiVo is a very, very heavily used device. I would go bonkers if I didn't have a set top box that could stream Netflix, Amazon, Pandora, and music/video off my home network. If I somehow lost my TiVo and couldn't get another one, I would very seriously consider a console to fill that role.

[TinCow]

I also never buy used games anymore, but I sure did when I was younger and I think its quite unfair to push them out of the market. If not for used games, i'd have never had any games at all as a kid.

This is true, but also deceptive. The reality is that consoles have been devices for adults for many years now. When I was a kid, I saved up my allowance and gift money for a year and bought the most basic NES set at $100, and that was shortly after release. Games were still expensive then ($40 per, IIRC), but I could get a couple a year if I saved my money. Basic console sets now are priced well out of the child/teenager market. These things are purchased by adults and their features are targeted at adults. If children have access to consoles now, it is because their parents buy them. MS and Sony are not aiming at the market of people who want to save $20 on a game, they're aiming at the market of people who can pay $500+ for an electronics device and then $50+ for games. Those aren't kids. A device that is aiming at the lower cost market is the Ouya.

In any case, the days when the console was something for children only is long gone. It's an adult/family device now:
http://www.theesa.com/facts/

1. Consumers spent $24.75 billion on video games, hardware and accessories in 2011.
2. Purchases of digital content accounted for 31 percent of game sales in 2011, generating $7.3 billion in revenue.
3. The average U.S. household owns at least one dedicated game console, PC or smartphone.
4. The average game player is 30 years old and has been playing games for 12 years.
5. The average age of the most frequent game purchaser is 35 years old.
6. Forty-seven percent of all game players are women. In fact, women over the age of 18 represent a significantly greater portion of the game-playing population (30 percent) than boys age 17 or younger (18 percent).
7. Sixty-two percent of gamers play games with others, either in-person or online.
8. Thirty-three percent of gamers play games on their smartphones, and 25 percent play games on their handheld device.
9. Seventy-three percent of all games sold in 2011 were rated "E" for Everyone, "T" for Teen, or "E10+" for Everyone 10+.
10. Parents are present when games are purchased or rented 90 percent of the time

[Beskar]

I support TinCow on a lot of this stuff, especially Steam. I love the name XBone which reads as X-Bone, though it gives mental images of bowchickachicka version of the Xmen.

One thing that does grind my gears though, is that DRM prevents old-school coop. If I have two PC's at home and I use the game for both of them (let's say Laptop for travel and PC at home), I should be able to play co-op if TinCow came around to my house with the game. Whilst this is fine for some games like EU3, other games purposefully prevent you from doing this. Really frustrating as I don't want to pay for two-copies of the game and I am sure TinCow doesn't want to buy a game to use on my computer.

[Gregoshi]

In any case, the days when the console was something for children only is long gone. It's an adult/family device now...

I've been working at Target in the electronics department for nearly three years and my personal experience, with no numbers to back me up, is contrary to some of the stats presented and TC's comment about adults and consoles. Most consoles sold at our store were parents buying them for their kids - school aged (5-6) and up for the Wii and pre-teen and up for Xbox/PS3. Similar experience with games - parents buying games for school-aged kids and most of the rest in the 18-25 year old range. Of course, I'm guessing ages, but in my particular situation (retail/department store), a 30 year old average gamer age seems high. Also, most parents are clueless about the consoles and are purchasing them under the direction of their teenager or with our (store employees) guidance for younger kids. As for female gamers, most of our games purchased by/for female gamers are fitness, dance or family oriented (to play with their young kids).

As for the XBone (like that name too) and the battle for the living room, I'm skeptical about the tactic. An all-in-one device for the living room isn't a bad idea, but this could lead to problems with family members competing for the TV. I have a PS3 hooked up to our TV in the family room, yet I rarely play with it (issue with using a controller aside) because the wife wants to watch TV or a DVD, my son, his girlfriend and her kid want to watch TV/DVD too and my son wants to play with his Xbox. Fortunately, my daughter has a TV in her room or things could be worse. Hence I rarely get TV time to watch/do what I want to unless it is very late at night after everyone else has gone to bed. I image the situation with the XBone will be similar - gaming dies or TV/video watching dies or everyone gets a small slice of time to do their thing on the shared device and no one is happy. And with an XBone in the living room, who is going to buy a second one for another room in the house if the price is too high? Perhaps Microsoft should be commended for their attempt to bring the family back together, but I'm not sure how that is going to fly in this day of everyone doing their own personal thing.