Microsoft's Big Bet on Online Gaming

Carl Bialik from the WSJ writes "The Wall Street Journal Online analyzes the prospects of the Xbox's online-gaming component. Analysts say Microsoft has spent hundreds of millions on Xbox Live, with little guarantees of returns. 'It is not clear that companies like Microsoft and Sony will be able to lure large numbers of players -- each has attracted a small fraction of users to online play with their previous consoles,' WSJ Online writes. 'The companies also must be careful about new business models for distributing games -- such as games-on-demand -- so as not to alienate game publishers, who still rely heavily on in-store sales. And games designed for multiple players have a mixed record of attracting customers.' Says analyst Michael Pachter, 'At the end of the day, we don't play games for social interaction ... We play games to escape.' Microsoft's strategy is 'absolutely flawed,' he added.""

Comments

Re:Microsoft's real gamble

[Blakey Rat]

Something that isn't even mentioned in the article is this. We know that Microsoft sells the XBox for a big loss- I recall hearing that the number was around $75 per system, initially at launch. I have come to believe that the original plan was to make that money back on XBox Live subscriptions. Think about this- if every XBox user bought Live and paid for four years, Microsoft makes $200 per user just off Live. Heck, if less than half of XBox users paid for a Live subscription and kept it for four years it would pay off the losses incurred from the system. At the same time they could sell a more powerful system for the same price as some of the competition (PS2 and XBox are the same price to this day- interestingly, the GameCube is at a lower price yet is more powerful than the PS2 and sold at a profit).

Do you think that running servers is free?

Seriously, man, I bet Microsoft would give Live away for free if they could. The $50/year is just for server maintainence and bandwidth, and compared to other games that need server maintainence and bandwidth, it's dirt cheap. (World of Warcraft, for instance, charges $180 a year for the service, and World of Warcraft doesn't store voicemails for you.)

I know Slashdot is all about the anti-Microsoft conspiracy theories, but this one doesn't even really make sense.

Why buy into a closed proprietary system?

[Johannes Rexx]

Don't people learn from history? IBM tried to lock people into their computers. Now Microsoft is there with windows and trying the same shzt again with gaming?

Hello! Wake up people! Open is good. Closed and proprietary is bad.

In my case I don't want a lock-in solution that requires me to buy a proprietary gaming box with a proprietary online gaming solution behind it. I want it open. I want it to run on my Mac or on Linux, and I want choices in my online gaming solution provider.

And I sure as shzt won't buy any solution from Microsoft because of their business ethics, and it sure disappoints me that so many folks don't seem to care about that.

Wait! This is the same country that voted Dubya in for a second term. I see. Ethics does not matter. Got it!

Re:This guy missed the point of online gaming . .

[captaincucumber]

I met Richard Garriot at a science fair that year. I noted to him how Ultima just wasn't as fun despite all its content and graphics. That a (relatively) simple text game had trumped it due to one very important aspect - muti-player environment. And, by the way, wouldn't it be cool if Ultima could be like that? Richard seemed to like the idea and invited me to call him at a later time... but I never did manage to get ahold of him again. Years later, and more likely due to natural progression rather than anything I said, Ultima Online made its debut.

That reminds me of a conversation I had with Thomas Jefferson. Tom, I said, wouldn't it be cool if there was a country where people elected their leaders and had basic rights like no unreasonable search and seizure, right to face their accusors, right to own guns, etc?

Some years later I had an interesting conversation with Henry Ford. Henry, I said, it takes too long to build cars, maybe someone should build them the way meat is slaughtered, little bits cut off by each person in the line. Wouldn't that be an improvement?

Maybe later I'll tell you about conversations I had with Bill Gates and Steve Jobs.