MS Seeks Entrance Fee to XBox Accessory Market

pwnage writes "According to CNET, Microsoft's newest licensing model for the next-generation XBox will effectively lock out 3rd-party accessory manufacturers who don't enroll in Microsoft's licensing and royalty program. The new console will employ hardware security mechanisms to ensure that only products created by developers willing to fork over cash to Microsoft can connect to and work with the console. Is Microsoft shooting itself in the foot by making traditional 'approved product' licensing mandatory for 3rd-party developers? Or will companies line up by the dozens to tithe to King Bill? Finally, will Sony follow a similar strategy to eke additional revenues out of its PlayStation 3?"

Comments

Think Tengen

[PhosterPharms]

So, for those of you old enough to remember, Nintendo charged exhorbitant licensing fees for anyone who wanted to make NES games. The way that they ensured that companies paid this fee was to build a lockout chip called 10NES into NES cartridges which only Nintendo could make. A few companies, most notably Tengen, reverse-engineered the chip, however, and made some unapproved games. Tengen actually cheated and used Nintendo documents to reverse-engineer the chips and ended up getting sued, but if this licensing fee is too high then what is going to stop accessory makers from reverse-engineering the chips and being done with it?

Re:Four words...

[ivan256]

I think you missed the point here,

The Seal of Approval was because the courts ruled that it was legal for third parties to make compatable NES cartridges for the original NES even though the third party cartridges circumvented the protections against such a thing. Afterwards Nintendo fought back with marketing claiming anything witout the seal was inferior. Really it just meant that the developer had paid the fees.

What he's saying is that the protections will be broken and MS will have wasted their effort.

Nintendo had something similar

[The Hobo]

The NES "lockout chip"

Patent 1

Patent 2
Disabling the chip

Re:Companies will pay

[Anonymous Coward]

"success of the original XBox"

You mean the GIANT PUBLIC ASS REAMING by Sony where MS lost five billion dollars just to land in last place?

Is that the 'success' you were referring to?

"way that things are looking for the XBox 360"

Let me guess...all the stuff you read on teamxbox.com says things are going smoothly for the Dreamcast 360.

The lack of backward compatibility.
The weak hardware - aka xbox 1.5
The nightmare to code for hardware - listen to all the developer complaints
The worse than "Star Wars Holiday Special" MTV unveiling for the Dreamcast 360
The humiliating E3 demos

Yeah, things are looking great for MS's Dreamcast 360.

Given Sony's History...

[pr0t0]

After paying $50+ for the Everquest2 game, then $15 a month for the privelege of actually using the game, then finding out that Sony wanted a piece of the action on items sold in Station Exchange auctions...I got an idea of how Sony treats its customers. I'm sure they are elated that MS took this step, now they can treat 3rd party vendors the same way.

Am I bitter? Oh, a tad.

I've since moved to Guildwars. It's possibly the best RPG game I've ever played.

Re:the "car" analogy

[geekoid]

"Seems perfectly legal"

it's not. Auto makers tried to this very thing, so did printer manufactures, and a hos of other companies.
All of which failed in court. So as soon as someone make an item that gets around the security(and they will) it won't matter any more.

Or someone will sue as anti competitive, and they will win.

Re:I'll take hidden answer #4

[amliebsch]

Never took an econ course, did you? In a competitive market, price is a function of two things: supply and demand. It is in no way a function of cost. (In a highly competitive market, price approaches actual cost.) Cost is merely a factor in determining whether the market will be entered at all. What Microsoft is doing is eating into the profits of accessory manufacturers, but the manufacturers can't pass that along unless they all collude to do so, because whichever one doesn't will capture most of the market.

Re:Lexmark Did This

[lowrydr310]

Lexmark? I believe they lost that case.

yes, they did!

Re:I'll take hidden answer #4

[letxa2000]

In a competitive market, price is a function of two things: supply and demand. It is in no way a function of cost. (In a highly competitive market, price approaches actual cost.)

Huh? First you say that price is a function of supply and demand and that is not a function of cost and then you turn around and say that price approaches actual cost--so obviously price is effected to some degree by cost.

You are right that the decision for an accessory manufacturer may very well be impacted by the increased cost, but those that do enter the market are not going to price their products below their cost regardless of competition. Most companies aren't like Microsoft where they can sell each unit at a loss. This new "Microsoft tax" is going to raise the prices of accessories as compared to similar accessories on other platforms.

This move by Microsoft will have two simultaneous effects: 1) Fewer third parties will enter the market. 2) Those that decide to enter the market will be charging a higher price than they otherwise would.

End result for the consumer: Fewer options and higher prices. Yeah, good idea Microsoft.

Re:I'll take hidden answer #4

[Elranzer]

THIS will be Nintendo's contribution to the gaming industry.

As if Nintendo hasn't already done more for the gaming industry than anyone else already?...

• Revived the near-dead industry from Atari
• First 4-way directional pad
• First expandable system (Famicom + Disk System)
• First game not fixed on one static screen (Super Mario Bros)
• First battery-save catridge
• First portable gaming system (Game & Watch)
• First portable multi-title console (Gameboy)
• First 4-player games (NES Satellite)
• First game console gun (Zapper)
• Idea to include system upgrades right in the game cartridge (Super FX/Star Fox)
• First analog stick for games (N64)
• First rumble feature for games (Rumble Pak/Star Fox 64)
• First system to have 4 controller ports (N64)
• First backwards-compatible system (Gameboy Color, or Advance if you're picky)
• First attempt at 3D virtual reality in a console
• First time to use two sets of d-pads or analog sticks (Virtual Boy)
• First upgradable RAM for a system (N64/Jump Pak)
• First writable catridge/flash-memory based console (Gameboy Advance)
• First handheld-to-console connection
• First official RF wireless controllers
• First console with two screens

I'm sure I'm missing a few. People seem to think whatever new technology Nintendo is going to introduce with the Revolution will make them a niche system rather than "standardized" the way 360 and PS3 are going to be. No doubt it will be something along the lines of their many other firsts which others have adapted. Their track record speaks for themselves, especially since everyone from Sega to Sony has copied them.

Re:I'll take hidden answer #4

[Com2Kid]

Now I am a huge Nintendo fanboy, but, umm, not QUITE all of those are accurate:

First 4-way directional pad

Hey, look, it is a joystick with out the stick, and with only half the directions!

Not quite an innovation.

Nice controllers though. :)

First portable gaming system (Game & Watch)

First portable gaming system with LCDs AND a Microprocessor. The key here is those last two, I have seen numerous older systems that used LEDs instead.

Idea to include system upgrades right in the game cartridge (Super FX/Star Fox)

Someone correct me if I am wrong, but didn't Sega try this?

Though this wasn't really anything TOO special, as NES games had Mappers that ended up far far extending the power of the original system.

First analog stick for games (N64)

Hey now watch it, all the BBC Micro fans are going to get on you!

The Vectrex Joystick

Vectrex Joystick An analog joystick with four buttons.

http://www.gifford.co.uk/~coredump/gpad.htm

First system to have 4 controller ports (N64)

Actually early Atari 5200 SuperSystem modems had that, as did earlier 8bit computers.

First backwards-compatible system (Gameboy Color, or Advance if you're picky)

Once again Atari bites ya here.

First attempt at 3D virtual reality in a console

Which would that be? Almost EVERYONE has tried that at some point in time or another, if you refer to the Virtual Boy, than I would rather that you didn't. :) Besides, the Virtual Boy wasn't a console, didn't you hear? It was portable! ;)

Anyways, the main point here is not to insult Nintendo by any means (I own hundreds of Nintendo games, I love the company), but rather, just to note that what we do today is indeed built upon successes of the past.

That, and not to go and try and reinvent the wheel. If ya ever get hired by a game dev company, study up on your history first before you spend R&D money on something that was already invented. :)

Re:I'll take hidden answer #4

[ArcadeNut]

Although I am a fan of Nintendo, some of your list is wrong.

First game not fixed on one static screen (Super Mario Bros)

There were lots of games for the Atari 2600 that scrolled.

Grand Prix
Barnstroming
Stampede
Vanguard

just to name a few off the top of my head..

First portable multi-title console (Gameboy)

The Atari Lynx and the GameBoy were both out in 1989.

First 4-player games (NES Satellite)

The Atari 2600 supported 4 players long before that.

Warlords on the Atari 2600 was a 4 player game.

First game console gun (Zapper)

If you mean Light Gun, the Atari 2600 used the Atari XE Light Gun for two games (one un-released)

Idea to include system upgrades right in the game cartridge (Super FX/Star Fox)

Again, not the first... Atari 2600 Cartridges could contain upgrades and some did.

First system to have 4 controller ports (N64)

Atari 5200 came in two varieties... 2 port and 4 port.

First backwards-compatible system (Gameboy Color, or Advance if you're picky)

Atari 7800 could play Atari 2600 and Atari 7800 games.

First official RF wireless controllers
Maybe not official (as I don't think they hit the market due to the crash), but the Atari 2600 did have Wireless controllers.

I won't argue the fact that Nintendo has done a lot for the gaming market, but don't think they were the first in everything.