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

Just Imagine

[denissmith]

Imagine the possibilities! Sony, and Samsung and RCA and Toshiba and (everyone else) can charge Hollywood studios to be able to play their Movies on my TV, DVD and VCR. DRM we can truly love! But the irony would be sweet.

Re:Just Imagine

[LordPhantom]

But why stop there? I think it would be great if -everything- had DRM equivalents. For example: *Gasoline Nanobots - If you want your car to work with OUR gas, you must pay us HOMAGE or our nano-bots will tear apart your precious engines! muwaa haaa haa *Life Presevers - Pay us our monthly "life fee" or your preservers, rafts and other saftey gear will cease to function, courtesy of our "Rights Protection Satelite" *Toilet Paper - Your rear will know fear if you don't pay our fees - talk about an UNSIGHTLY rash. *gah*

Re:Just Imagine

[Total_Wimp]

I hope they do it with the PC too! I want to use only Microsoft licensed keyboards, mice and hard drives. I want the CPUs to be hand-picked by MS and I only want to use MS-approved HD-DVD instead of that yucky Blue-Ray.

In fact, I don't know what I ever saw in the ability to choose products based on their merits. Having a big brother to help me make these choices will really enhance my life. It's double-plus good.

TW

Re:Just Imagine

[zxnos]

umm, just buy a macintosh... :P

Re:Just Imagine

[aichpvee]

Not if he wants that "Microsoft Quality" that Just Works(TM).

Re:Just Imagine

[corngrower]

And I'm going to do something similar with my house. Microsoft will have to pay me to run their XBox. Sony will have to pay me if they want to run their playstation in my house. Dell will have to pay me if they want to run their computer in my home.

Re:Just Imagine

[B747SP]

umm, just buy a macintosh... :P

No no, you don't understand. It's OK for Apple to behave this way because OSX is BSD, and (despite that its dying!) BSD is free and open source and full of wholesome goodness.

(It's only evil if Micro$oft does it!)

I'll take hidden answer #4

[ZakuSage]

It'll probably be more reason for cash straped people will opt for the Nintendo Revolution rather then the more expensive options that are PS3 and X360.

Re:I'll take hidden answer #4

[Skim123]

Yeah, I don't think most businesses wanting to make an assload of money really are targetting the 'cash strapped' demographic. Rather, they are aiming for the pudgy middleclass, those will money to burn (or at least willing to go seriously into consumer debt to have their toys).

Re:I'll take hidden answer #4

[Fussen]

I talked to an employee of a software company that has been around the Revolution's development crew, and I am starting to understand why Nintendo didn't release their controller's specs.

The phrase "tactile feedback" made my mind go crazy. And here I thought it was going to be some sort of successor to the Power Glove.

THIS will be Nintendo's contribution to the gaming industry. As microsoft just prevents wang-chung-foo from making ad-hock pieces with security dongles inside their parts, Nintendo actually raises the bar.

Whether "tactile feedback" or "inspired by the DS" actually is what I imagine, it sure ain't gonna be some sort of banana boomerang.

Re:I'll take hidden answer #4

[Total_Wimp]

You are very wrong. Companies that target the poor make big bucks. Wal-Mart is an excellent example. There's even a saying to go along with it: "If you want to be rich, sell to the poor. If you want to be poor, sell to the rich."

The fact is, there are way more poor people than rich. World-wide, there are way more poor people than middle class. Most of those poor people are buying soap, clothes and food. Many of them are buying entertainment too.

Cash strapped people can and do buy gaming consoles and will pick the lower priced ones when the cost comes down low enough. Sony still makes money off the PS1. It's still making tons of money off the PS2 as well. You can be sure the rich and middle class bought their PS1 or PS2 years ago, meaning a whold lot of that profit is coming from... you got it, cash strapped people that can only just now afford it.

TW

Re:I'll take hidden answer #4

[dnoyeb]

It just means their accessories and games, etc. will all cost more. MS is stupid if they think this cost wont be passed to the customer, directly.

Yes MS makes more, but its paid by the customer. And when the customer sees the expense of the whole system its just going to put a sour taste in their mouth.

I find it always odd why companies don't seem to realize other companies do the same things they do.

Re:I'll take hidden answer #4

[Skim123]

I should have been more specific. Sure, you can make an assload of money selling to the poor, but only if what you're selling can be obtained cheaply (i.e., food, soap, clothes, etc.). Clearly there's a certain cost that Microsoft or Sony (or Nintendo) incur to develop the console, produce it, ship it, market it, etc. That, along with projected sales, tells them what the minimum they could sell it for and break even. And that dollar figure is quite a bit higher than the break even point for buying tomatos and selling them to folks. Sorry, but they can't afford to sell an XBOX for $25, no matter how many 'cash strapped' folks would buy it.

In any event, why is anyone surprised at the 'high' prices of 'next generation' consoles? For electronics companies the formula is pretty well-established:

1. Invest serious $$$ into R&D and make a 'next generation' product
2. Spend big on marketing/advertising
3. Give it a price tag that may be a bit high, but one that early adopters will happily swallow
4. Over time lower prices to capture a larger market share

That's what you see with virtually every electronic toy out there.

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:I'll take hidden answer #4

[Mr. Flibble]

You are very wrong. Companies that target the poor make big bucks. Wal-Mart is an excellent example. There's even a saying to go along with it: "If you want to be rich, sell to the poor. If you want to be poor, sell to the rich."

This is a good point, but it is slightly off base. Note, I am not saying that your point is not valid, only that it plays out a little differently than the saying.

This Excellent Book goes into great detail as to who the rich actually are, and what they actually wear, and what they really buy. I would actually be surprised to find a rich person shopping at high end stores after having read that book. In fact, I would guess you would more likely find them at Wal-Mart doing their shopping. High income earners such as Doctors, Laywers and Accountants generally shop at the "luxury" shops and buy the Ferrari's and Handmade Gucci's. The rich got to be rich by shopping at places like Wal-Mart.

Now, as to your point, you are entirely correct on the selling... Selling to the masses rather. The economics of scale will benifit you. If you can sell millions of products that retail for $2.50 you are going to make more money than selling a few items that retail for $10,000. Provided you can survive Wal-Marts "supplier squeezing techniqes" you can make a good deal of money selling volumes to them.

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

[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.

Bad idea

[kidfob]

Bad idea for MS. Don't 3rd party accessory companies have a hart time turning a profit as it is? How would paying royalties look like an attractive option. They'll likely just develop for the PS3 or Revolution.

Re:Bad idea

[ReverendHoss]

I'm not sure Microsoft would be overly upset if they were the only supplier of controllers, memory cards, etc.

I really can't think of any accessories that have ever influenced anyone's decision whether or not to buy a console. GBA attaching to a Gamecube, maybe? Gameshark? Eh.

Re:Bad idea

[prockcore]

oh no! What will I do? I won't be able to buy a crappy MadCatz controller for the xbox360!

I don't think it's a bad move on MS's part. 3rd party accessories have always been awful. It's especially frustrating when you want to go buy an xbox live headset and all the 1st party versions are sold out and the only thing left is a really horrible speakerphone made by Bob's Bargain XBox Stuff.

Crappy 3rd party accessories reflect badly on the console as a whole. A little bit of quality assurance is a good thing.

Re:Bad idea

[TheGavster]

There's always been QA in the form of 'official' accessories. Forcing *everyone* to use the official accessory licensing program just means that those of us willing to accept a crappy headset at a reduced price are out of luck. Preventing a transaction that would otherwise generate a surplus is just bad economics.

Re:Bad idea

[Guspaz]

Very unfortunate if they did (try to charge $200 for a keyboard).

I am considering buying an xbox 360. The decision hinges on the ability to use it with my unused 19" CRT monitor. It's in excellent condition, but a laptop means I don't use it anymore.

The 360 is supposed to have VGA out, so that's that.

But of course, I'm a PC gamer. I was hoping that I'd be able to use a mouse and keyboard to control FPS games on the 360. After all, the 360 has USB ports, so it's theoretically possible if there are standard keyboard/mouse drivers.

But if devices need to be licensed to work, I can forget about this, because the mouse and keyboard are obviously not licensed.

And so the situation you describe could very well happen, although we might end up in an even more rediculous situation; we made need an adapter to hook up a keyboard and mouse to the 360, like we do for the current xbox and PS2. This time around, though, the adapters and the keyboards plugged into them will have the same type of connector. So stupid!

Hopefully including some sort of quality control..

[briankoenig]

Hopefully along with the fee comes a Microsoft quality screening similar to the process that the games go through. Every gamer knows that first party controllers, memory cards, etc hold up better than most third party, and that there is a huge gap in quality between a Logitech controller and some no-name piece of garbage.
Since Logitech is more likely to pay the fee than a get-rich-quick company making "2x the MEMORY!!" memory cards, hopefully the market will see a big step forwards in the average quality of third party peripherals.

Companies will pay

[UMhydrogen]

I think with the success of the original XBox and the way that things are looking for the XBox 360 companies will fork up the money to do it. Just look at Apple's strategy. It keeps only high quality products being created. This will ensure that the XBox stays a hot product and will also ensure that people aren't exploiting the XBox. I think it's a good move.

Re:Companies will pay

[Blakey Rat]

"People on Slashdot" are not the same as "people." Perhaps 0.5% of the people who buy an Xbox are even aware that it *can* be run Linux (and I'm sure less than 5% even know what Linux is.)

If it increases the quality of peripherals, I'm all for it. My only question is: When can I pre-order a Xbox 360?

Four words...

[Black.Shuck]

...Nintendo Seal Of Approval.

How is Microsoft doing things differently?

Re:Four words...

[bhtooefr]

There's a difference.

The Nintendo Seal Of Approval means that that part is tested to work. However, I can buy a noname Gamecube/N64/SNES/NES controller without the NSoA, and it'll probably work.

However, this will mean that if it isn't an MS certified device (and the DRM isn't cracked), it simply won't work.

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.

Bad move, MS

[Cerdic]

This kind of arrogance is often attributed to the downfall of Nintendo (though more so on a software basis). As N came to the top, they got greedy with their control on who could release hardware and also had ridiculous fees for being a developer.

With this in effect, suddenly hardware is going to be more expensive with less competition. With the PS3 and Xbox having basically the same game lineup, this could be part of keeps Sony at the top (assuming they don't do anything stupid like this).

Manufacturing costs

[volvis]

This would seem like a fair way to cover some of the huge manufacturing costs of these next-gen consoles. Don't know if that's the case in practice though.

Wow, and?

[pantherace]

Microsoft is legally able to do this. However, as with all known technical system protections, given enough time and effort, someone will break it.

I'm suspecting that after it's broken, either by Xbox-Linux people or by someone else, a company will create a peripheral that uses it. Then I suspect there will be a demand to stop based on the DMCA or similar. A nice long court fight, with either the status quo, or more money for Microsoft via the erosion of the idea that you actually own property. (and continuing with the idea that you can do what you want with your property. They do have court decisions about modchips in their favor.)

It'll end up like SCO. Endlessly debated, (Label A) then a court will rule, it'll be debated more, goto Label A.

Yes, they will pay the crack dealer...

[Saeed al-Sahaf]

Is Microsoft shooting itself in the foot by making traditional 'approved product' licensing mandatory for 3rd-party developers?

No, because the potential pay-off to the 3rd party people is just way to big. They will pay up. But I suspect whatever scheme MS comes up with will be cracked within 72 hours anyway...

Missing an option...

[ivan256]

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?

More likely... Manufacturers will circumvent the protections and make compatible items anyway like with the original NES. There's even prior case law from the original NES days, and even the Lexmark case that will help them get away with it.

Re:Missing an option...

[glesga_kiss]

More likely... Manufacturers will circumvent the protections and make compatible items anyway like with the original NES.

That was pre-DMCA however; laws have changed now. If the new xbox was some sort of "trusted computing" device, they could argue that the entire system used the same protection and this was breaking it. Might not be a credible case legally or technically, but the threat can be enough to make some manufacturers back out of the market. It's all risk assesment.

If they were to sue for some of these more recent laws, it may backfire and have some of the laws repealed/modified when everyone realises how sneaky it is. Which would be nice.

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:Think Tengen

[The Lynxpro]

"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?"

Tengen - aka the home gaming division of arcade maker Atari Games Corporation (now the intellectual property owned by Midway) and not to be confused with Atari Corporation (now back to Atari Inc. and a brand of Infogrames) - sued and lost to Nintendo over that whole incident as well. Tengen manipulated the Patent Office into revealing the digital signature of the NES lockout chip. When Tengen lost, they stopped making games on the NES and switched over to supporting the Sega Genesis. And once Time Warner regained full ownership of the Company, they were also made to cooperate with Atari Corp. and license their title library over for the Atari Lynx. Time Warner at that point owned 100% of Atari Games Corp. (this was around 1991) and 25% of Atari Corp. and they also started distributing EGM as well if memory serves me correctly.

Atari Games Corp. really despised Nintendo and its lock on "Atari's" market. They were given the go-ahead by their parent company at the time - Namco - to proceed. That was the main motivation. The fact that Nintendo controlled the manufacturing process on third party game cartridges on the NES (in response to Atari Inc.'s failure to control third party quality on the 2600 causing the industry crash) and shorted Tengen lots of cartridges fueled the flames.

Nintendo one-upped Atari Games by aiding other parties in officially acquiring the rights to Tetris which Atari Games did not officially owned because of Robert Maxwell's bogus rights ownership of the property. Unfortunately, that meant Atari Games could no longer offer its version of Tetris (which was superior) on any platform and handed Nintendo a victory in being able to ship their Tetris with every Gameboy (much to the detriment of the Lynx, the superior handheld). The Tengen NES version of Tetris became quite a collector's item, and saavy stores were selling it for $90 thereafter.

The better companies to cite (especially legally) in terms of beating the licensing game was...uhm...whoever marketed the Game Genie.
Galoob? Camerica?

I don't understand

[defile]

If console manufacturers could legally lock out third party accessories, wouldn't they have done it long ago? Nintendo sued Game Genie over patent violations but still couldn't keep them out of the market.

How is this any different from Lexmark's ink cartridge fiasco (a case they lost)? "We'll keep doing it in the face of all of this legal precedent that says we can't" doesn't seem like a sound long-term legal strategy.

Re:I don't understand

[nick_davison]

"We'll keep doing it in the face of all of this legal precedent that says we can't" doesn't seem like a sound long-term legal strategy.

You've not come across this Microsoft company of which you speak before, have you.

The same company that sucks up $1m/day fines for monopolistic practices, loses its case in the U.S. and just buys the Bush administration in order to have the government decide, "Pursuing any damages isn't worthwhile, even though we've already won."

Microsoft knows that with a five year generation per console, they can bury this one in court time for way longer than that, for a fraction of what they can make if they make $5/accessory sold to 30m users, and then meekly promise the courts, "Oh, OK, we see your point - but we stopped selling that console two years ago and our new one uses something different."

Long Term Effect

[Blindman]

Ultimately, this will raise the price of peripherals, and discourage their purchase. As I understand the model, they should try everything possible to get the hardware in your hands so that you will buy more games. Especially for those people that buy accessories at the time of the system purchase, it will give them a lot of reasons to consider whether to buy it at all.

All depends on the success of the Xbox360

[ThinkFr33ly]

As far as MS is concerned, it's a win-win.

It's very unlikely that the accessories for a system will significantly change the sales of that system. With the exception of some fairly serious add-ons (like the Powerglove, Robie, etc), most accessories are just "nice to haves".

If the Xbox 360 does well then companies will flock to MS and gladly pay the license fee. MS makes lots of money off this program, and most of the companies who would have made accessories to begin with will continue to do so because it will still result in a profit.

If the Xbox 360 does poorly, then there wouldn't have been very many 3rd party accessories to begin with.

The only people who lose out in this scenario is small accessories companies who might not be able to afford the cut into their profits, and potentially consumers if these license fees are large enough to cause the accesories to be priced significantly higher.

Re:Hopefully including some sort of quality contro

[Samari711]

Yes, rather than have the free market determine which brand X controllers stay on the market and at what price point, lets have one company control it and keep prices exorbitant!

I'm not too concerned though, it's going to be the same type of situation as it was with the chips in pinter ink cartridges.
1)DRM-like scheme locks out competitor
2)competitor reverse engineers said scheme
3)???
4)Profit!!

MS would be best off not suing under the DMCA, seeing as the SCOTUS was pretty firm in the Lexmark case about the DMCA not extending to interaction between components.

Nintendo had something similar

[The Hobo]

The NES "lockout chip"

Patent 1

Patent 2
Disabling the chip

Re:Nintendo had something similar

[MaxCreamer]

The big difference here that you have to mod the Xbox360 to accept non approved controllers which is easy, but which manufacturer would build a controller just to sell to the 1% of the market that would be modding their xboxes.

M$ have created a classic chicken and egg situation here.

Re:Making the PC world a better place...

[Saeed al-Sahaf]

It's steps like this (by Microsoft and previously Nintendo) that may lead developers to return to the PC development environment.

You're kidding, right? This is nonsense. Third party makers will pay up, and proliferate. There is no shortage of people willing to pay, and they aren't interested in PC games, they want consoles. If you can't afford one you're probably not the market MS is targeting anyway, and will have to wait for second hand equipment on eBay.

Oh yeah, that's a great idea.

[stungod]

I guess it's to be expected - let other companies spend years building a business making 3rd-party accessories for consoles, then squeeze them for licensing fees in order to stay in the business.

I wonder how much it will be? $2? $10? The problem with this kind of deal is that it almost always hurts the little guy more. Logitech isn't going to have to pay nearly as much per-unit as one of the smaller players, so we end up with fewer choices. I would be one thing if we could somehow be guaranteed that MS will make the best controllers out there, but it's not like their track record has been that good.

So if a developer wants to sell a driving game with a wheel or we want to get the HD version of Dance Dance Revolution (yay) then it's going to cost even more than before.

Really though, I doubt this is about controllers. More likely it concerns other types of accessories...like mod chips. If they can prove that "unlicensed" mod chip makers are avoiding a standard license fee, they can sue them for those fees to either put them out of business or make it too expensive to make a product. If it's not illegal yet, I'm sure there's a lobbyist somewhere working on it.

Grey market adaptors

[tacarat]

"The Mad Catz license agreement also puts limits on the type of controllers that third parties can make. Most notably, the add-on products can only be of the corded variety, while Microsoft itself is supporting wireless controllers.
In addition to the restrictions on wireless products, the Mad Catz contract excludes light guns, memory units, hard drives and cheat cards. Licensed peripherals include game pads, steering wheels, arcade sticks, flight sticks and dance pads.

So,can we expect DMCA action "Cheat cards"? I'm guessing there will also be adaptors for unlicensed xbox360 controllers at some point. Get them while they're grey market!

It's just supply and demand

[RealityProphet]

Moves like these are based solely on the expected demand from consumers for these consoles. If consumers are frothing at the mouth to get their hands on the new xbox 360, then peripheral manufacturers are going to be frothing at the mouth to supply them with whiz-bang accessories. MS wins: a good business decision.

However, the opposite was true of Nintendo after their fatal decision to stick with cartriges for N64. For years, Nintendo dominated the console market, and for that, they required that all games were authorized by them and I believe even manufactured at one of their own sites. They could do this solely because there was incredible demand for their consoles. When Sony entered the market and support for Nintendo waned, all of a sudden they needed to offer game producers incentives to keep making games for Nintendo consoles.

The only thing that this sort of decision by Microsoft is saying is that they believe very strongly that their next gaming platform is going to be massively successful. And to me, that isn't really such a bad thing.

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.

Just. Don't. Buy. One. (or, do)

[ScentCone]

If some extremely cool 3rd-party controller/widget maker just doesn't want to get into the MS zone, then they can just focus their ultra-cool talents, superior pricing, and fantastic wonderfulness somewhere else. And then no one will want the walled-off fancy ivory tower product, and that will be that.

Or not. But the point is, it's a wildly competitive product space. It they can't attract the right 3rd party stuff at a good price, and assure their users that 3rd party stuff is going to be something other than a rip-off, then they'll lose. Let them, or support them. It's a choice - and the choice is X or not X. S or not. N or not.

If it was my product, I suppose I'd probably also have an interest in not seeing its reputation tainted by someone's experience with a cheesy, ill-behaved, flaky third-party add-on. Because some 10 year old is going to come back from his friend's house talking Dad into buying him a Sony box since the Xbox kept hanging up when they were using the Acme Kick Boxing Motion Sensor Gloves that only cost $10 on eBay.

No hobbyists?

[argent]

So, hobbyists won't be able to connect custom stuff to the XBox 360?

I think I'll sit that one out. Not because I want to do it but because amateur hackers thinking up new uses for stuff is a great source of new ideas and gadgets... the more Microsoft locks up their systems, the less they'll have a part in the next generation of inventors.

Re:No hobbyists?

[Gogo0]

Really, did you ever truly believe that MS embraced the hobbyist with the original xbox?

This tactic not only provides them with more money, but it has a neat side-effect where it creates another hurdle for hobbyists and pirates to have to jump over (or perhaps its the other way around).

They do not want anyone hacking their console for any reason.

Re:This is a good thing.

[vsprintf]

This will force MadCatz to start putting out quality accessories, and not crappy controllers that break 2 weeks after you buy them.

It won't force MadCatz to do anything except pay money to Microsoft and charge more for their products. If you know their stuff is crap, don't buy it in any case. A MS hologram isn't going to make it any better. If you think otherwise, I suggest you go look at all the dead Compaqs and Emachines with a MS sticker on them.

Tune in next week!

[Geek of Tech]

>> 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?

For some reason this brought Batman to mind. "Will the Caped Crusader be able to free himself or will he be fried, roasted and "bat"tered? Why has the joker broken in to jail? Who is this new stranger? Can Batman's utility belt run Linux?
Tune in next week, same bat-time, same bat-channel.

Either pwnage or I watch too much Batman.

Re:Nintendo wouldn't do something like this

[Saige]

Anyways, we all know that Xenon and Cell suck - Anandtech had an article on it but that article was mysteriously removed from the website, no doubt because of Sony or MS putting (legal?) pressure on them. Luckily, you can read it here.

Actually, the article was pulled from the site because it was full of inaccuracies, and was just, in general, crap. I've seen the parts about the article regarding the 360 torn apart completely, internally, by people who actually know about and helped create the thing. People who were very upset to see something they've worked on get blasted with repeated falsehoods.

Should be a warning to game devs.

[incom]

This should be a warning to any game developers and publishers of the type of control MS plans to enduce if they get significant control over the console market. If you thought the restriction and high liscensing fees of the snes were bad, imagine what a console monopoly by MS would yeild.

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:Hopefully including some sort of quality contro

[earnest murderer]

Their "Windows Certification" program has certainly shown that a barrier to entry rarely produces a "better" product. Just a product with a logo on it's box. I've owned a lot of Logitech gear and their high end stuff is certainly decent enough. Their low end however, is as craptacular as any other.

Re:I bought it i own it

[KillShill]

welcome to the console business.

where the big monied 'holes can do anything they want at the expense of the customers.

what? you had a foolish notion that you owned the hardware you paid money for?

silly capitalist, ownership is for corporations.

Re:Lexmark Did This

[lowrydr310]

Lexmark? I believe they lost that case.

yes, they did!

Quality Control or Absolute Control?

[kubevubin]

You know, I feel as though this is more of a quality control issue than what many people are considering it. The number of peripherals released for anything that garners even a decent amount of popularity is nothing short of disgusting. For instance, I work at CompUSA, and I must say that I cringe every single time I have to stock a new iPod accessory. Some of the iPod accessories that I've seen lately are nothing short of pathetic. Example: Today, I came across an accessory that turns a car's cup holder into an iPod holder. Lame. Seriously, I hope that this works in Microsoft's favor. Maybe these developers will think twice before releasing several variations of what is, essentially, the same damn controller. Now, if there's no sense of quality control, though, I think this will ultimately only lead to more expensive throw-away peripherals, rather than dirt-cheap ones. Let's hope for the best. I really hope that Pelican (one of my favorite third party peripheral developers) brings their quality products to the 360.

Re:Quality Control or Absolute Control?

[Moofie]

Yeah, we can't have the market deciding which products should win and which ones should lose. Let's just have Microsoft do all the hard thinking for us!

If you don't want an accessory that turns a cup holder into an iPod holder, don't buy one. (Me, I think it would have been a very handy thing to have in my Miata...would have worked beautifully...)

Re:Quality Control or Absolute Control?

[benbean]

if it was a quality control issue they wouldn't allow third-parties to release crappy bug-ridden games either.

Re:Quality Control or Absolute Control?

[benbean]

I bought a couple of Logitech Precision Xbox controllers to replace my broken original Microsoft ones, and you know, I think they're better designed and better built, and were less than half the price. IMHO of course.

Third-party products aren't always going to be cheap tat. It'd still be nice for the consumer to have the choice.

looks like they found another way to lose money

[Locutus]

all this is going to do is reduce the number of hardware options for the product, raise the price of the accessories, and reduce sales. Add this to the added( +$10 ) per game MSFT is requiring and it all adds up to a win for Sony.

It's kinda strange that they are doing this considering for the life of Windows CE, they've been willing to lose ~$1 billion per year and haven't resorted to this kind of extortion from its WinCE cohorts. Then again, WinCE is a software product and Xbox 180 is hardware. And expensive hardware at that.

I just loved how they are not only requiring accessory vendors to pay MSFT, but they also must sign an agreement to NOT develope certain accessories. For instance, nobody but MSFT can build wireless accessories. Good luck with that.

LoB

Re:Hopefully including some sort of quality contro

[Belial6]

I'm thinking that this will hand a "legitimate use" excuse to the mod chip makers.

Re:Hopefully including some sort of quality contro

[quarkscat]

"MS would be best off not suing under the DMCA, seeing as the SCOTUS was pretty firm in the Lexmark case about the DMCA not extending to interaction between components."

Interesting thought, but wrong IMHO. The DMCA is protected not only by DRM these days, but also by the US PAtriot Act. Microsoft doesn't need to sue someone who sets up a website that publishes DRM cracks any more. The same C&D letter to the website administrator can now be CCed to the DoJ, who will use criminal "conspiracy to commit" charges (or worse). The current regime in power is in lockstep with the **AA in regarding copyright violators to be (practically speaking) "terrorists".

Microsoft is Desperate for Control and Revenue

[Anonymous Coward]

I disagree that it's about quality control.

Ever since the beginning of the nineties, Microsoft has been working to change the commodity PC into a Windows-only platform. What used to be commodity PC hardware interfaces, have gradually been replaced by complex, undocumented protocols requiring proprietary, vendor-specific drivers.

And Microsoft was succeeding in their decommoditization scheme... until Linux came along.

Now, Linux has an even wider range of hardware support than Windows. The only place where Windows still has a lead is in the latest hardware releases from a shrinking number of companies still willing to partner with Microsoft. Those companies include NVidia and ATI, who, case in point, were convinced to stop supporting Linux Open Source drivers when Microsoft offered to make them partners in the XBox.

It's not only Linux. Apple and Sun have also released PC-based versions of their operating systems. As a result, commodity PC hardware is back in vogue, and Microsoft is losing control.

Microsoft is desperate to get that control back. Otherwise, without the means to sabotage and block their competition, Microsoft might actually have to start to compete. That prospect scares Bill Gates, who knows that Microsoft has lost every fair competition it has faced, and has always found it necessary to resort to unethical, and even illegal means in order to prevail.

The XBox was one of Microsoft's strategies for regaining that control. But it hasn't given them enough control, apparently, so they're making it even tighter.

The other purpose of this step is to increase revenue. It's not that Microsoft is going broke, however, again thanks to competition from Linux and other Open Source software (Apache, OpenOffice, etc.), Microsoft's revenue has been shrinking, or at least growing more slowly. It is getting harder and harder for Microsoft to hide this trend, and, once the markets notice, Microsoft's stock price could take a huge hit.

Hence, this move comes as no surprise to me, and I expect to see more schemes from Microsoft aimed at gaining income, and raising the barriers to compatibility.