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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?"

22 of 385 comments (clear)

  1. Just Imagine by denissmith · · Score: 5, Funny

    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.

    --
    I have nothing to hide. So, why are you spying on me?
    1. Re:Just Imagine by LordPhantom · · Score: 5, Funny

      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*

    2. Re:Just Imagine by Total_Wimp · · Score: 4, Funny

      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

    3. Re:Just Imagine by zxnos · · Score: 5, Funny

      umm, just buy a macintosh... :P

      --
      always mosh clockwise
    4. Re:Just Imagine by B747SP · · Score: 4, Funny
      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!)

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  2. I'll take hidden answer #4 by ZakuSage · · Score: 4, Insightful

    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.

    1. Re:I'll take hidden answer #4 by Skim123 · · Score: 4, Insightful

      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).

      --

      I could not justify my existence if I were a turkey farmer. Would I terminate myself? Undoubtably, yes.

    2. Re:I'll take hidden answer #4 by Skim123 · · Score: 4, Insightful
      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.
      --

      I could not justify my existence if I were a turkey farmer. Would I terminate myself? Undoubtably, yes.

    3. Re:I'll take hidden answer #4 by Mr.+Flibble · · Score: 4, Insightful

      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.

      --
      Try to hack my 31337 firewall!
  3. Hopefully including some sort of quality control.. by briankoenig · · Score: 4, Interesting

    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.

  4. Companies will pay by UMhydrogen · · Score: 5, Interesting

    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.

  5. Missing an option... by ivan256 · · Score: 4, Interesting

    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.

  6. I don't understand by defile · · Score: 4, Insightful

    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.

  7. Re:Hopefully including some sort of quality contro by Samari711 · · Score: 4, Insightful
    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.

    --

    I never said I was smart, I just said I was smarter than you

  8. Nintendo had something similar by The+Hobo · · Score: 5, Informative

    The NES "lockout chip"

    Patent 1

    Patent 2
    Disabling the chip

    --
    There is another kind of evil which we must fear most, and that is the indifference of good men. -- Boondock Saints
  9. Re:Making the PC world a better place... by Saeed+al-Sahaf · · Score: 4, Insightful
    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.

    --
    "Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
  10. It's just supply and demand by RealityProphet · · Score: 4, Insightful

    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.

  11. Given Sony's History... by pr0t0 · · Score: 5, Informative

    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.

    --
    I'm sorry, but your opinion seems to be wrong.
  12. Just. Don't. Buy. One. (or, do) by ScentCone · · Score: 4, Interesting

    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.

    --
    Don't disappoint your bird dog. Go to the range.
  13. Tune in next week! by Geek+of+Tech · · Score: 4, Funny
    >> 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.

    --
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  14. Re:Bad idea by TheGavster · · Score: 4, Insightful

    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.

    --
    "Because Science" is one step from "Because old book". Try "Because of my experiment testing my falsifiable assertion".
  15. Quality Control or Absolute Control? by kubevubin · · Score: 4, Interesting

    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.