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Why The X-Box Network Will Fail

Posted by Hemos on from the battle-of-the-giants dept.

angkor wrote to us an article from The Register that looks at what Microsoft is planning for the X-Box Network. The factual information is educating on it's own - and the analysis of why they think it will fail is interesting as well.

10 of 442 comments (clear)

  1. lock you in by Jucius+Maximus · · Score: 5, Interesting
    It seems that this is conceptually similar to what they are trying with Windows Product Activation and the .NET subscription.

    They want you to get on the service and pay a fee per month. This way you are subscribed and you don't own the product. You are only "licensed to use it."

    The thing is that this is a proven profitable model. Look at Ultima online. It's pulling in a cool US$million every month with no signs of stopping. And Everquest is delivering on similar dreams of avarice.

    It seems to me like MSFT is trying to cash in in the same manner with using a proven business model.

    1. Re:lock you in by sheldon · · Score: 5, Insightful

      the question just remains that if sony can do it for free, how much better does M$'s have to be in order to convince people to pay for it

      But Sony isn't going to do it for free. Sony is just not going to do it. That is, all Sony is going to sell you on your PS2 is a modem/network adapter to allow you to connect to your pre-existing ISP.

      From then on, whether you play a game online or not is entirely dependent upon your relationship with the software publisher of the particular game. So in the case of playing Everquest, you will pay $10/month to Sony. If you want to play some other game from Sega, you will pay $10/month to Sega and so forth. Now some games may sell so well that the publisher includes online play in the price of the box, like Blizzard does with Diablo, but I suspect most won't be like that. There will either be a charge to get to the Sega network, or per individual title.

      So the Sony model is actually going to be far more expensive per month in order to get access to the same number of games as the Microsoft model. I think this makes the Microsoft model far more compelling from a consumer aspect.

  2. Potential Reason by briggsb · · Score: 5, Funny
    It could fail if the user base dwindles to 0 because of this accessory.


    Seriously, why are we so fascinated with failure. It's like some gossip rag that's so excited by some movie star getting busted for drugs.

  3. "Sony...has more sense and fewer scruples. " by wiredog · · Score: 5, Funny

    Fewer scruples? Than Microsoft? <Bill_And_Ted>Whoa</Bill_And_Ted>

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  4. Re:man.... by quantaman · · Score: 5, Insightful

    The reason we want it so fail is because we fear it. We fear it is because if it becomes the dominant consol you KNOW Microsoft is going to use it as a lever to force themselves more and more into the home, that's why MS cancelled WebTV, this is a stronger candidate for getting MS into the living room. Also consider that so far Sony and Nintendo have played relatively nicely in the consol market (from a consumer rights point of view), just look at MS's track record and decide wether you want that company controlling the consol industry too.

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  5. We don't need no steenkin internet by rot26 · · Score: 5, Interesting

    This looks to me more like an end-run around the internet itself. It will essentially run in a tunnel through the existing infrastructure, but at some point in the future, there's no reason that they couldn't migrate on to something else, say a wireless network that had its own protocols, address scheme, etc. Bill Gates has been kicking himself in the ass for the last 10 years because he didn't discover the internet soon enough to dominate it, and he's got to be salivating at the idea of an essentially private user space that he controls lock stock and barrel. If he pursued this for all it was worth, he could do it with his other $39 billion... I wonder what kind of return on his investment he would eventually get?

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  6. Observe the trends by Rupert · · Score: 5, Insightful

    While El Reg does love to bash Microsoft (one of the reasons I read it!) they also have a point here about the various companies different strategies for online gaming.

    MS is building a theme park, and will charge a toll for players and (probably) for game companies too. Sony is staying out of the expensive business of physically connecting game players to game servers, and instead letting the game developers provide the servers. If the history of the Internet so far is any guide, Sony's approach is more likely to succeed.

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    1. Re:Observe the trends by sheldon · · Score: 5, Interesting

      Setting up the online gaming infrastructure can be expensive. In the PC world there have been only a handful of success stories. Quake relied mostly on volunteers setting up servers. Blizzard is relying on sheer popularity of their boxed game sales to cover the cost. But others like UO, Everquest, and dozens of others charge $10/month to play.

      So Sony is leaving it up to the developers. Which means some games may be free to play online, and others will cost money.

      But the way game consoles work, a consumer buys many games and then might wish to play any given game at any time. This means that unless you are entirely committed to one game, you face the possibility of paying $10/month for half a dozen games, which is a signifigant cost. That means you probably only choose one game to play online, sort of a survival of the fittest. Everquest has become this way on the PC, whereas others like Subspace died from lack of subscribers.

      On the other hand Microsoft is taking a different tactic. They'll provide the infrastructure for all games. The developer of the game sells their box, and then turns over the server code to MS to maintain. MS in turn charges one price to the consumer(this might be $50/year, maybe it's $10/month, not sure yet) to access all games online.

      This means that popular games will drive XBox sales and sales of the online subscription. But less popular games will be able to share these infrastructure costs and as a result not disappear totally because they only have say 200 users instead of 200,000.

      I see Microsoft's model as clearly superior from the customer perspective. The only question is how much, if anything, they charge the game producers. If it's little to nothing, MS will clearly be in a better partnership position.

      BTW, Sony's model has been criticized by others a bit more knowledgeable and certainly less biased than the Register:
      http://news.com.com/2100-1040-855039.ht ml

  7. microsoft != microsoft by sluggie · · Score: 5, Insightful

    Yes, it's true.
    Just because they developed a kinda unfriendly OS there is no reason to hate the whole company and predict failings and spread bad mood.

    The gaming sector of Microsoft has nothing in common with the part of the company that produces the OS, except the name.
    Take a look at Microsoft hardware, the controllers, the joysticks, the mice. They deliver rock steady quality for a fair price.

    And I think it's the same thing with gaming here. The guys responsible for that DO have the balls and the money to pull this thing off.

    Why do we always have to bitch about EVERYTHING that MS does? Why can't we just be grateful that they give us more freedom in choosing our online/gaming console?

    More drivers just improve the quality of the race.

    So, let's see how they do, and hey, if it's cool don't be ashamed to use it.

  8. Why is everyone missing the point? by donnacha · · Score: 5, Insightful

    I'm amazed that I have yet to read a single article that draws together the most obvious strands of Microsoft's Xbox strategy.

    1. It has nothing to do with the old razors/blades chestnut, whereby companies exclusively focused on gaming subsidized the hardware in order to make money on the software. Most commentators are so dazzled at their own brilliance in understanding that rather simple business strategy that they've failed to notice that the market has moved on, increased it's complexity and now has substantially expanded ambitions.

    2. MS might be saying that their only focus is gaming but you'd have to be retarded to believe it. Their major international investments in cable companies make it obvious that some sort of Personal Video Recorder and possibly also basic decoder capability will work it's way into the next Xbox.

    3. The current iteration of the Xbox is all about establishing it's credibility as a consumer device. They will achieve this because they have to and that sort of acceptance absolutely CAN be bought. I'm not saying that MS would madly throw money at this regardless of eventual profit but you have to realize that the eventual market they're aiming for is FAR larger than gaming.

    4. Apart from PVR, Gaming, DVD and cable TV decoding, there's also the fact that the Xbox will be the hardware incarnation of MSN Messenger and THAT'S the biggest game in town. An often overlooked part of their upcoming online gaming package is the headset communicator that they're bundling with it. Stated purpose of this device: to allow gamers to lambast eachother while playing. Actual purpose: to allow millions of people to chat. THAT's why they're building data-centres with such massive capability. Think about it, they become the world's defacto IM service with no Yahoo or AOL to compete with them.

    Let me just make this clear: the Xbox is going to be the world's telephone/watercooler/flirtation device. Your sister will buy one.

    The proof: MS aren't going to reduce the Xbox's retail price any further but, by Xmas, they WILL add the headset communicator and a years subscription to the bundle. Seriously, this will happen.

    Next, expect to see the introduction of a non-gaming based chat service by next summer.

    5. MS don't have to keep lowering the Xbox price. In fact, a major sales channel that Sony and Nintendo don't have is the cable companies. Expect to see the Xbox offered as a rental item, for about $15 per month along with Xbox Live subscription and stripped-down broadband Internet Connectivity (i.e. Xbox only).

    I'm not for or against MS, I'm just calling it as I see it. Personally, I might buy a GameCube when Pikmin is released. I might also buy an Xbox when it's functionality stretches, as I've predicted, beyond just gaming.