Digital Spy

Search Digital Spy
 

DS Forums

 
 
 

Used Games -- Microsoft's big risk.... or best weapon?


Reply
Thread Tools Search this Thread
Old 13-06-2013, 21:45
ExoPaul
Forum Member
 
Join Date: May 2012
Posts: 39

Microsoft have clearly taken a huge risk by bringing in a used-games policy. It is one of the bigger reasons why people are angry because used-game sales are clearly going to be restricted and this (along with higher price and other small issues) could lead to PlayStation 4 pushing ahead with sales in the first 12 months. Microsoft are going to struggle a bit if this issue is as big an issue to the consumer as many predict......

However......

They could, if they manage to hold on (and there is a chance with their resources and brand) turn it around into one of the biggest weapons in their arsenal..... not to begin with for sure, but in the 2nd or 3rd year of the console life.

Why?

Because they know deep down that gamers want to play the best games available. And that the whole "best experience" means a lot to gamers. It is the reason why Xbox360 and Xbox Live has been a huge success, so quickly for them.
Ok, so PS4 is technically more powerful out of the box and it is cheaper with its own branch of exclusives, so to begin with PS4 may have a clear edge..... but further down the line and provided they have a huge amount of unit sales, Microsoft can start putting leverage on the gamer and pressuring them into owning an Xbox One..... all because of the used games policy.

How?

Because once you have enough units sold, and a lot of people playing on the Xbox One, you start to put pressure on the game developers. You turn to the bigger companies like Activision and EA, and you show them how many games are being bought full price on the Xbox One (to which the developer/publisher takes a percentage of each sale) and then you show them how many game sales were through pre-owned methods (which because of DRM will show how many games are played second-hand.). You also point out that not only are pre-owned sales down and first-hand game sales are up (unlike with the PS4) but also point out that the publisher/developer are making a small % of revenue from each pre-owned sale too..... again, something that is unlikely to occur via a PS4 pre-owned game sale.

What will this do?

It will make the developers/publishers look at their own sales figures and targets and then compare them to the Playstation 4 and PC. And what will happen is something that has already happened in the current generation..... publishers will start to slowly shun the systems with the poorest overall sales.
In this generation it was the PC that has lost out due to the sheer amount of piracy that has occurred. Developers are not keen on working, only to see 4 in every 5 copies be played for free and because the PS3/Xbox 360 offered a more secure and harder to pirate system they were guaranteed of getting more money from these systems, and as such they spent more time, money and in some cases exclusivity on these systems than on the PC.

Roll on to the next generation and they will do the same, and they will see how the Xbox One is forcibly increasing full game sales and heavily limiting the $0 revenue of pre-owned sales (or indeed allowing them to profit from them), and they will compare them to the PS4 and see how Sony favours the gamer (a person who wants the best, by paying them the least) and not the developer.

So what will they do?

They will not abandon the PS4 entirely, that would be ridiculous considering the system will be in the hands of millions of people. But what it will do is make the publisher's shareholders want the bigger slice of the profits. They will push for more DLC content come out on the Xbox One, either time-limited exclusive or completely exclusive. They will dedicate staff to the Xbox One version over the PS4 version as they need to make sure its polished enough to sell heavily on that system because of the high profit margins. Eventually they may actually get the odd indie developer looking at the two consoles and decide that if the sales stats are heavily in favour of the Xbox One making significantly more first-hand sales compared to the PS4's pre-owned market, they may consider the PS4 not worth their limited resources to develop a multi-platform for..... why allow the PS4 to give away their game for free (via eBay/pre-owned sales) and therefore people choose to not buy it on the Xbox One where the profits lay?
Once publishers see $$$'s they will know which direction to head in, and Xbox One will get more and more content, while developers will be pushed into finding more and more devious ways of hampering PS4 pre-owned sales via whatever method completely ruins the experience of owning a pre-owned game on that platform.

What about the fact Microsoft is allowing pre-owned sales through official outlets? Doesn't that negate the theory?

To begin with yes, but in the long run no, because allowing Microsoft to dictate which outlets may sell Xbox One pre-owned sales, it effectively makes them the puppet-master of pre-owned games. Game retailers will soon understand (through the promise of bulk discounts, stock levels and even the threat of cancelling the official pre-owned retailer contract) that they have to follow what Microsoft tell them. And what Microsoft will tell them is to take it easy at first, sell pre-owned games fairly cheap and hassle free for gamers so they soon forget the hysteria and hype of the policy and get on board to owning the console.
Then later on they will start to dictate pricing structures for pre-owned games so that first, pre-owned sales are only 25% cheaper than full-price, and that the licence rights to sell pre-owned games force the retailer to distribute a 30% share of the pre-owned sale to be split between Microsoft/Developer. This will make sure that not only are they limiting pre-owned sales, but they are also allowing the publisher/developer a share of the pre-owned profits, something that Sony are not willing to offer with their policy.

So will gamers accept this?

No.... they will make a fuss and argue and say that PS4 is the way to go. But over time, if Microsoft's plan to lure and woo developers with this increase in profits works for them, slowly and surely gamers will head towards the Xbox One to find the best games, the extra DLC, the exclusive content and so on. In an ideal Microsoft world, 4 years down the line the latest Call Of Duty, Grand Theft Auto and Fifa games will ONLY appear on Xbox One simply because no matter if it sells first-hand or pre-owned, the publisher/developer will profit highly off the back of it, and the PS4 will be neglected due to poor first-hand sales and far too high loss-making pre-owned sales.

Will it be a quick turnaround?

No.... if they play the card perfect it could be done in 12-18 months of launch, but it is more than likely they need to build a gaming audience and some serious sales figures to really persuade the bigger publishing houses to lend primary support to the Xbox One, and that could take a good 2-3 years or more before they can consider the strategy a success. It may even take a couple more years on top of that to really push the biggest franchises to completely give up development for the rival. It would all come down to the development costs compared to the sales earnings from the platform.

Is it guaranteed to succeed for Microsoft?

No.... they could find the opposite happens and that this policy pushes far too many gamers towards the PS4. Add to it the fact both machines are out at a similar time this generation and a massive deficit in the two system's prices when people do not have the money for these types of expensive luxuries, and people may literally do a Wii-U and abandon the new console in such high numbers developers see 10 million PS4 owners (even with high pre-owned sales earnings at $0) as a much better business opportunity than 2 million Xbox One owners (even with higher full game sales)..... and they may end up go in the opposite direction concentrating on PS4 instead. There is every chance that no matter how hard they push it, people still keep buying PS4 and developers still see huge $$$'s in the PS4 regardless.

Can Sony defend against it?

Yes.... they can bring in their own policy for pre-owned games, and already they have changed their official line from E3, changing it from "No DRM/pre-owned policy" to a noticeable "DRM/Pre-Owned is in the hands of the individual developers!". With several more months and analysing what Microsoft are doing they may even drop the policy completely and introduce a similar strategy to Microsoft, believing that it has plenty to gain and little to lose by following Microsoft's stance. The only issue they have is that Microsoft appear to have developed their policy into the machine from the off, whereas PS4 will have to implement it post-release which may throw up complications.
But if Sony do bring in their own policy it may annoy gamers who felt they were lied to, or it may defeat Microsoft's plans of dominating the pre-owned market and manipulating publishers.

So will it work or not?

At the end of the day it IS a hugely risky strategy designed to control the pre-owned markets to flatter and profit the publishers and developers. If they can weather the initial 12 month storm and statistics prove that their control of the pre-owned market is working and game sale profits are really high then it will definitely influence developers in such the same way they proved console sales (and lack of piracy) was a better option than PC sales and the developers will jump into bed with them bringing fanatical gamers to tag along.
But if they make mistakes, control the pre-owned pricing structure too heavily, artificially inflate pre-owned prices too quickly, encounter a Sony changing tact and using a similar strategy or they fail to do what the ultimate goal is and sway the publishers/developers into flying the Xbox flag........ it could be the demise of the successful Xbox brand!
ExoPaul is offline   Reply With Quote
Please sign in or register to remove this advertisement.
Old 13-06-2013, 22:01
Fio Montoya
Forum Member
 
Join Date: Jun 2006
Posts: 7,021
They will lose a massive share of the market, it really is that simple. All the kids now, won't be kids forever. Lose them now and its gonna cost ya. Parents supply the consoles, and parents supply most of the games, until said kids start earning. So, kids will share games with their friends, swap them, or trade them in to put towards the cost of new games, in order to have more of them. Parents on finding out the news about Xbone will switch to the PS4 which is not placing these restrictions on them or their kids, because it's cheaper. The kids grow up as PS customers and, because we all know that brand loyalty counts for a lot, won't see any reason to switch to MS. Both Sony and MS have seen the massive reaction now, and Sony are by far in the better position because they haven't placed any restricions on the customer right now, and can think ahead and hopefully decide not to try doing that in the future. It is MS who will have to backtrack, but the damage has already been done.
Fio Montoya is offline   Reply With Quote
Old 13-06-2013, 22:03
Hotbird
Forum Member
 
Join Date: Sep 2004
Posts: 8,799
They will not abandon the PS4 entirely, that would be ridiculous considering the system will be in the hands of millions of people. But what it will do is make the publisher's shareholders want the bigger slice of the profits. They will push for more DLC content come out on the Xbox One, either time-limited exclusive or completely exclusive.
So publishers who are angry about PS4 gamers buying used games and not giving them any money are going to take the one revenue stream from used games they do have on that console away from them .
Hotbird is offline   Reply With Quote
Old 13-06-2013, 23:51
brangdon
Forum Member
 
Join Date: Apr 2005
Location: Nottingham, UK
Posts: 10,601
It will make the developers/publishers look at their own sales figures and targets and then compare them to the Playstation 4 and PC. And what will happen is something that has already happened in the current generation..... publishers will start to slowly shun the systems with the poorest overall sales.
Yes. But it's not at all clear that will be the PS4. Second-hand games bring more money into the gaming industry, which finds its way to developers eventually. Gamers who sell games use the money to buy other games. Gamers are more willing to risk buying a game when they know they can sell it easily if it turns out not to be to their taste. Even if PS4 and XBox One consoles sell in equal numbers, the PS4 may generate more revenue for developers.

Currently it looks like the PS4 is going to sell massively more, which tilts the field even more in its favour. The effect you mention will likely work in the opposite direction to the one you expect.
brangdon is offline   Reply With Quote
Old 14-06-2013, 02:15
munta
Forum Member
 
Join Date: Oct 2003
Location: The United Kingdom
Posts: 14,903
The used game market is tiny as this article shows.

http://www.mcvuk.com/news/read/npd-u...was-90m/097024

So in Q4 2011 the used game market in th uk was 90m compared to the boxed retail
market of 780m.

Let's assume for a moment that Xbox 360 and PS3 took 33% of the market each or 260m a piece. So that means that they lose 30m to pre owned sales (roughly 10% of total sales)

All it would take is for Microsoft to lose 10% of console sales on the Xbox one over PS4 and they have lost money for their developers. The way that the industry is talking at the moment, I would be surprised if Microsoft manage to sell half as many consoles as Sony do. I think even that may be generous. And if so then the figures above would look more like this.

Sony total market - 380
New market - 340
Lost to secondhand - 40

Microsoft total market - 190
New market - 190
Lost to secondhand - 0

(I hope my figures are correct. But I think they will definitely be in the right ball park)

So based upon those figures it is imposible for Microsoft to make more money for the developers. The second hand market just isn't big enough. Now, if Xbox one and PS4 sold about the same quantity of consoles then the developers would be better off with Microsoft but not a single person believes that will ever happen the way things stand at the moment.

Infact the break even point for Microsoft (based on the assumptions above) would be PS4 35 % of the market. Xbox one 31% of the market.

Anything less and they will lose income for themselves and for the developers.
Game over!
munta is offline   Reply With Quote
Old 14-06-2013, 09:17
Gilbertoo
Forum Member
 
Join Date: Nov 2006
Posts: 16,953
Sony hold all the cards at the moment. The PS4 will probably outsell the Xbox One by quite a bit. Developers simply won't be able to ignore that.
Gilbertoo is offline   Reply With Quote
Old 14-06-2013, 09:35
Tobias.
Forum Member
 
Join Date: Apr 2006
Location: Here
Posts: 854
I think it's feasible, however I doubt there will ever be enough units sold to counteract the lost money from gimping the used market. Therefore, no way to persuade developers to jump ship. Given the state of chat at the moment on social media, I can honestly see this doing worse than the Wii U and that in itself is a challenge! But, these ex-box fans will end up going somewhere. Some will go pc, some Sony, but there are a few I imagine would take up the wii U for the simple reason, they hate Sony. Sounds mad but some people really will not "go to the otherside" so to speak. Even if their beloved brand is doing something stupid and they themselves admit it. I have a brother has always bee x box and has no plans of buying the x box one. I said I look forward to playing with him on the ps4 then. But.oh no, it was like I'd asked him to join a cult or something!

Anyway time will tell how well HAL...i mean the xboxone will do, but I would not like to be in the Ms camp at the moment. It's gonna take a miracle for them to pull this around. The only way it could have worked IMO, is to have severely reduced the cost of the console itself. Or via company tie-ups such as BT, talk talk. Giving you the Xbox one and free live when you take out unlimited BB. Peeps would not then object too much to the game expense as they paid nothing for the console itself.
Tobias. is offline   Reply With Quote
Old 14-06-2013, 10:44
cat666
Forum Member
 
Join Date: Aug 2008
Posts: 1,919
I believe Microsoft will come out of it OK, if not on top.

All they need to do is show just how much money the consumer will save by buying DRM. A hard copy of the game would be 45 instore, but if it was downloadable they could get away with knocking at least 5 if not 10 off the price, straight away. Then do weekend sales when sales start to drop and you tap into a whole other market. It works for Steam on PC, check this out ripped from Wiki

"Valve does not release any sales figures on its Steam service, instead it only provides the data to companies with games on Steam, which they cannot release without permission due to signing a non-disclosure agreement with Valve. However, Stardock, the previous owner of competing platform Impulse, estimated that, as of 2009, Steam had a 70% share of the digital distribution market for video games. In early 2011, Forbes reported that Steam sales constituted 5070% of the $4 billion market for downloaded PC games and that Steam offered game producers gross margins of 70% of purchase price, compared with 30% at retail."

The figures speak for themselves. Developers get only 30% of the sale price from shops like GAME, but take them out of the mix and go to downloads and it over doubles to 70%. Therefore they can afford to sell at a lower cost initially, and then slash prices soon after release or do regular flash sales.

The PC digital download market is worth 4 billion dollars. Thats a lot, of which all of it is DRM. Move that market to console and you get so much more customers so it is no wonder why Microsoft want a piece of the action. The good thing is, the consumer gets better deals too!
cat666 is offline   Reply With Quote
Old 14-06-2013, 11:01
munta
Forum Member
 
Join Date: Oct 2003
Location: The United Kingdom
Posts: 14,903
I believe Microsoft will come out of it OK, if not on top.

All they need to do is show just how much money the consumer will save by buying DRM. A hard copy of the game would be 45 instore, but if it was downloadable they could get away with knocking at least 5 if not 10 off the price, straight away. Then do weekend sales when sales start to drop and you tap into a whole other market. It works for Steam on PC, check this out ripped from Wiki

"Valve does not release any sales figures on its Steam service, instead it only provides the data to companies with games on Steam, which they cannot release without permission due to signing a non-disclosure agreement with Valve. However, Stardock, the previous owner of competing platform Impulse, estimated that, as of 2009, Steam had a 70% share of the digital distribution market for video games. In early 2011, Forbes reported that Steam sales constituted 5070% of the $4 billion market for downloaded PC games and that Steam offered game producers gross margins of 70% of purchase price, compared with 30% at retail."

The figures speak for themselves. Developers get only 30% of the sale price from shops like GAME, but take them out of the mix and go to downloads and it over doubles to 70%. Therefore they can afford to sell at a lower cost initially, and then slash prices soon after release or do regular flash sales.

The PC digital download market is worth 4 billion dollars. Thats a lot, of which all of it is DRM. Move that market to console and you get so much more customers so it is no wonder why Microsoft want a piece of the action. The good thing is, the consumer gets better deals too!
What you ignore is that a large proportion of games sales are presents. That requires a physical copy and that must be bought from a shop/internet retailer. Add to that that there has never been a larger resale market for PC games so PC gamers are a different beast. But even if you are correct that people will move to a digital download only delivery, then based on my figures on the post above, the xbox one will have to sell 30% of console sales compared to PS4s 70% and that assumes that every single game will be sold as digital download.

I still think its not going to happen
munta is offline   Reply With Quote
Old 14-06-2013, 11:18
Brass Drag0n
Forum Member
 
Join Date: Nov 2007
Location: On the sofa ♂
Posts: 3,879
Except Microsoft already sell digital downloads of old games on the 360 at damn near full price.

A boxed game from Amazon can cost 15 new while the DL version will be 40 from Microsoft.

Currently they want their cake and eat it - Steam style digital DL gaming WITH console game pricing.
Brass Drag0n is offline   Reply With Quote
Old 14-06-2013, 11:33
Tobias.
Forum Member
 
Join Date: Apr 2006
Location: Here
Posts: 854
I believe Microsoft will come out of it OK, if not on top.

All they need to do is show just how much money the consumer will save by buying DRM. A hard copy of the game would be 45 instore, but if it was downloadable they could get away with knocking at least 5 if not 10 off the price, straight away. Then do weekend sales when sales start to drop and you tap into a whole other market. It works for Steam on PC, check this out ripped from Wiki

"Valve does not release any sales figures on its Steam service, instead it only provides the data to companies with games on Steam, which they cannot release without permission due to signing a non-disclosure agreement with Valve. However, Stardock, the previous owner of competing platform Impulse, estimated that, as of 2009, Steam had a 70% share of the digital distribution market for video games. In early 2011, Forbes reported that Steam sales constituted 5070% of the $4 billion market for downloaded PC games and that Steam offered game producers gross margins of 70% of purchase price, compared with 30% at retail."

The figures speak for themselves. Developers get only 30% of the sale price from shops like GAME, but take them out of the mix and go to downloads and it over doubles to 70%. Therefore they can afford to sell at a lower cost initially, and then slash prices soon after release or do regular flash sales.

The PC digital download market is worth 4 billion dollars. Thats a lot, of which all of it is DRM. Move that market to console and you get so much more customers so it is no wonder why Microsoft want a piece of the action. The good thing is, the consumer gets better deals too!
In an ideal world yes but this is a MS world, well that's what they want you to think lol, where digital downloads are stupidly expensive to the physical counter part - the same on Sony aswell. If it turns out that all new games to download are 20 or very near abouts, then I would defo reconsider the Xbox one as a viable beast. But the fact, based on past history, is they won't be.
Tobias. is offline   Reply With Quote
Old 14-06-2013, 11:42
Hotbird
Forum Member
 
Join Date: Sep 2004
Posts: 8,799
I believe Microsoft will come out of it OK, if not on top.

All they need to do is show just how much money the consumer will save by buying DRM. A hard copy of the game would be 45 instore, but if it was downloadable they could get away with knocking at least 5 if not 10 off the price, straight away. Then do weekend sales when sales start to drop and you tap into a whole other market. It works for Steam on PC, check this out ripped from Wiki

"Valve does not release any sales figures on its Steam service, instead it only provides the data to companies with games on Steam, which they cannot release without permission due to signing a non-disclosure agreement with Valve. However, Stardock, the previous owner of competing platform Impulse, estimated that, as of 2009, Steam had a 70% share of the digital distribution market for video games. In early 2011, Forbes reported that Steam sales constituted 5070% of the $4 billion market for downloaded PC games and that Steam offered game producers gross margins of 70% of purchase price, compared with 30% at retail."

The figures speak for themselves. Developers get only 30% of the sale price from shops like GAME, but take them out of the mix and go to downloads and it over doubles to 70%. Therefore they can afford to sell at a lower cost initially, and then slash prices soon after release or do regular flash sales.

The PC digital download market is worth 4 billion dollars. Thats a lot, of which all of it is DRM. Move that market to console and you get so much more customers so it is no wonder why Microsoft want a piece of the action. The good thing is, the consumer gets better deals too!
That's all good in theory and if that truly is the plan MS have then this sort of pricing policy should have been in place 2months ago on 360. We should already have been shown the benefits of this system, shown how quickly things will go on sale and show what sort of prices we would be expecting. The trouble is we have seen digital price regularly above physical prices, sales are poor and so we have to trust that a large corporation is going to do what is right for the consumer in a world were we see most large corporations thinking about how they can make more money for themselves at the expense of the consumer.
Hotbird is offline   Reply With Quote
Old 14-06-2013, 12:05
Danger Close
Forum Member
 
Join Date: Jul 2011
Location: Manchester
Posts: 2,029
No.... they will make a fuss and argue and say that PS4 is the way to go. But over time, if Microsoft's plan to lure and woo developers with this increase in profits works for them, slowly and surely gamers will head towards the Xbox One to find the best games, the extra DLC, the exclusive content and so on. In an ideal Microsoft world, 4 years down the line the latest Call Of Duty, Grand Theft Auto and Fifa games will ONLY appear on Xbox One simply because no matter if it sells first-hand or pre-owned, the publisher/developer will profit highly off the back of it, and the PS4 will be neglected due to poor first-hand sales and far too high loss-making pre-owned sales.
Because the makers of the biggest selling games in the world are stupid enough to alienate half of the people buying them?

The reason this gen was pretty even was because Sony improved their online service and dropped the price of the console. Despite launching later.

MS really will have to pull their finger out to have an even split this time.
Danger Close is offline   Reply With Quote
Old 14-06-2013, 12:09
Ladyxxmacbeth
Forum Member
 
Join Date: Mar 2011
Posts: 1,036
I wonder whether the parents that buy the Xone for their kids will look at it in the light of having more features for the family. I'd buy the all singing all dancing console over one that only played games.
PS4 plays games

Xone plays games and has TV on it. links with windows phones and computers.

I think that although gamers don't like all the new features the general public will. Microsoft must have done their research and I think actually it wont be as big a flop as we all think.

Personally for my gaming needs I'm thinking I'd rather upgrade my PC and the likelyhood would be that I would be giving money to Microsoft.

I think that Xone is a bad gaming console and can no longer be called a s such. it is an entertainment system. I think personally the Xone will fly and fail, and my gut says it will fly with the general public and fail with hardcore gamers. I dont think the used games market matters much to the general public
Ladyxxmacbeth is offline   Reply With Quote
Old 14-06-2013, 12:13
Hotbird
Forum Member
 
Join Date: Sep 2004
Posts: 8,799
I wonder whether the parents that buy the Xone for their kids will look at it in the light of having more features for the family. I'd buy the all singing all dancing console over one that only played games.
PS4 plays games

Xone plays games and has TV on it. links with windows phones and computers.
When PS3 and 360 went on sale last generation, one been the all signing all dancing console with a high price and the other been a cheaper console that was perceived to only play games. Which one did parents buy?
Hotbird is offline   Reply With Quote
Old 14-06-2013, 12:17
gavo360
Forum Member
 
Join Date: Jan 2009
Location: Sheffield
Posts: 1,455
In an ideal world yes but this is a MS world, well that's what they want you to think lol, where digital downloads are stupidly expensive to the physical counter part - the same on Sony aswell. If it turns out that all new games to download are 20 or very near abouts, then I would defo reconsider the Xbox one as a viable beast. But the fact, based on past history, is they won't be.
We definitely need digital games to be much cheaper then what we are used to in order for many people to not care about resale value. The only saving grace Xbox has is that Microsoft and all publishers come out and say digital games will be 40-50% cheaper then physical discs. If such an announcement is going to happen then it needs to happen very soon.

Has anyone seen any games 'journalists' ask about digital games rrp during E3?
gavo360 is offline   Reply With Quote
Old 14-06-2013, 12:18
Fio Montoya
Forum Member
 
Join Date: Jun 2006
Posts: 7,021
That's the thing. How many of us really want all singing all dancing, or a console that just plays games. For me it's the latter and always will be, but I am interested to know how many people want a console that can do everything.
Fio Montoya is offline   Reply With Quote
Old 14-06-2013, 12:20
munta
Forum Member
 
Join Date: Oct 2003
Location: The United Kingdom
Posts: 14,903
We definitely need digital games to be much cheaper then what we are used to in order for many people to not care about resale value. The only saving grace Xbox has is that Microsoft and all publishers come out and say digital games will be 40-50% cheaper then physical discs. If such an announcement is going to happen then it needs to happen very soon.

Has anyone seen any games 'journalists' ask about digital games rrp during E3?
That might rescue MS from this disaster. But given the arrogance that MS officials have shown show far I can only assume that XB1 titles will remain the same price as PS4 titles on both physical and DD.
munta is offline   Reply With Quote
Old 14-06-2013, 12:21
jim_uk
Forum Member
 
Join Date: Jan 2007
Location: Watford
Posts: 12,959
I believe Microsoft will come out of it OK, if not on top.

All they need to do is show just how much money the consumer will save by buying DRM. A hard copy of the game would be 45 instore, but if it was downloadable they could get away with knocking at least 5 if not 10 off the price, straight away. Then do weekend sales when sales start to drop and you tap into a whole other market. It works for Steam on PC, check this out ripped from Wiki

"Valve does not release any sales figures on its Steam service, instead it only provides the data to companies with games on Steam, which they cannot release without permission due to signing a non-disclosure agreement with Valve. However, Stardock, the previous owner of competing platform Impulse, estimated that, as of 2009, Steam had a 70% share of the digital distribution market for video games. In early 2011, Forbes reported that Steam sales constituted 5070% of the $4 billion market for downloaded PC games and that Steam offered game producers gross margins of 70% of purchase price, compared with 30% at retail."

The figures speak for themselves. Developers get only 30% of the sale price from shops like GAME, but take them out of the mix and go to downloads and it over doubles to 70%. Therefore they can afford to sell at a lower cost initially, and then slash prices soon after release or do regular flash sales.

The PC digital download market is worth 4 billion dollars. Thats a lot, of which all of it is DRM. Move that market to console and you get so much more customers so it is no wonder why Microsoft want a piece of the action. The good thing is, the consumer gets better deals too!
You can't compare the two, PC games are cheaper, they come down in price faster and then you've got the Steam sale. There's also piracy, it's so easy on the PC that paying for games is basically optional, they have to offer value and engender loyalty or they won't get paid.

The PC makes a lot of money not because of DRM, it's because it's huge, there are an estimated 250 million core PC gamers, you can throw another 750 million casuals on top of that. http://techreport.com/news/24575/pc-...grew-8-in-2012
jim_uk is offline Follow this poster on Twitter   Reply With Quote
Old 14-06-2013, 12:34
Ladyxxmacbeth
Forum Member
 
Join Date: Mar 2011
Posts: 1,036
You can't compare the two, PC games are cheaper, they come down in price faster and then you've got the Steam sale. There's also piracy, it's so easy on the PC that paying for games is basically optional, they have to offer value and engender loyalty or they won't get paid.

The PC makes a lot of money not because of DRM, it's because it's huge, there are an estimated 250 million core PC gamers, you can throw another 750 million casuals on top of that. http://techreport.com/news/24575/pc-...grew-8-in-2012
Is it a possibility that console gaming subsidises PC gaming?
Ladyxxmacbeth is offline   Reply With Quote
Old 14-06-2013, 12:39
Danger Close
Forum Member
 
Join Date: Jul 2011
Location: Manchester
Posts: 2,029
When PS3 and 360 went on sale last generation, one been the all signing all dancing console with a high price and the other been a cheaper console that was perceived to only play games. Which one did parents buy?
That's the thing. How many of us really want all singing all dancing, or a console that just plays games. For me it's the latter and always will be, but I am interested to know how many people want a console that can do everything.
It's been said before. How many of us need an all in one machine? Most of us have a TV, set top/digi box, pc/mac/laptop. We have them for dedicated reasons and how long does it actually take to pick up your remote and change input/channel?
Danger Close is offline   Reply With Quote
Old 14-06-2013, 12:56
TommyNooka
Forum Member
 
Join Date: Oct 2008
Posts: 840
I wonder whether the parents that buy the Xone for their kids will look at it in the light of having more features for the family. I'd buy the all singing all dancing console over one that only played games.
PS4 plays games

Xone plays games and has TV on it. links with windows phones and computers.

I think that although gamers don't like all the new features the general public will. Microsoft must have done their research and I think actually it wont be as big a flop as we all think.

Personally for my gaming needs I'm thinking I'd rather upgrade my PC and the likelyhood would be that I would be giving money to Microsoft.

I think that Xone is a bad gaming console and can no longer be called a s such. it is an entertainment system. I think personally the Xone will fly and fail, and my gut says it will fly with the general public and fail with hardcore gamers. I dont think the used games market matters much to the general public
From what I've read this isn't true. It has pass-thru port(s) for your TV box but it doesn't 'have TV on it' unless you count iPlayer and 4OD etc. as TV.

I have a 4 year old PVR box that also has pass-thru ports....and they don't get used because I have a TV with more than one HDMI port as I imagine most people do now.
I really don't think the 'major problem' of having to press the AV button on your remote control was one that needed solving. It looks to me that people are being told they need this function when in reality it's pretty much the same as what we already have.
TommyNooka is offline   Reply With Quote
Old 14-06-2013, 13:17
munta
Forum Member
 
Join Date: Oct 2003
Location: The United Kingdom
Posts: 14,903
From what I've read this isn't true. It has pass-thru port(s) for your TV box but it doesn't 'have TV on it' unless you count iPlayer and 4OD etc. as TV.

I have a 4 year old PVR box that also has pass-thru ports....and they don't get used because I have a TV with more than one HDMI port as I imagine most people do now.
I really don't think the 'major problem' of having to press the AV button on your remote control was one that needed solving. It looks to me that people are being told they need this function when in reality it's pretty much the same as what we already have.
And this is one of the problems that MS face in the UK at least. UK TV providers are very reluctant to allow anyone else access to control their TV content. Take Virgins implementation of Tivo for example which is a cut down version of the functionality Tivo has in the USA. The TV capabilities that were shown on XB1 relied upon the XB1 having control of the set top box to change channel. Now it is possible that the XB1 can utilise the network capability of Tivo or Sky+ to change channel and access the EPG. But that would probably require licencing from the respective manufacturers since I don't believe there is a standard interface. So, people may buy the XB1 expecting to be able to change the channel on their TV but due to drawn out licences and contract issues they may find themselves unable to do so. In fact, its still possible that these functions will never be available in certain countries.
munta is offline   Reply With Quote
Old 14-06-2013, 13:28
odie8391
Forum Member
 
Join Date: Sep 2011
Location: North-East England
Posts: 780
It's been said before. How many of us need an all in one machine? Most of us have a TV, set top/digi box, pc/mac/laptop. We have them for dedicated reasons and how long does it actually take to pick up your remote and change input/channel?
Exactly, it's laziness. Microsoft really have aimed the Xbox One at the American market who can't be arsed to get off their backsides and grab the remote.
odie8391 is offline Follow this poster on Twitter   Reply With Quote
Old 14-06-2013, 13:55
munta
Forum Member
 
Join Date: Oct 2003
Location: The United Kingdom
Posts: 14,903
Exactly, it's laziness. Microsoft really have aimed the Xbox One at the American market who can't be arsed to get off their backsides and grab the remote.
And then sell the fat b'stards Kinect Sports of the back of it
munta is offline   Reply With Quote
 
Reply



Thread Tools Search this Thread
Search this Thread:

Advanced Search

 
Forum Jump


All times are GMT +1. The time now is 06:01.