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MS Employees Debate Mod Chips
Via 1up, a post on Xbox strategy group member Andre Vrignaud's blog discusses the view of mod chips from inside Microsoft. Not surprisingly, he concludes that they're a barrier to a viable business model. Just the same, the post has some good consideration of the issue from both sides. Especially interesting is his comment that "a friend of mine at Microsoft once demonstrated a modded PSP to Bill Gates and showed off all of the interesting things that enabled. According to my friend Bill was intrigued and asked the audience what we might be able to do to encourage this sort of thing without damaging the business." Even if it's a sticky wicket, at least they're thinking along the right lines.
I'm glad that Microsoft is actually looking into this. From the business perspective, a lot of money could be made if Microsoft / Sony / Nintendo (are there modded Gamecubes?) would embrace the mod chips.
It's the equivalent of illegally downloaded songs several years ago. Apple was one of the first to "cash in" on it. They had managed to get people to pay for something they could get free.
If the big console manufacturers would do this, not only would it make their game systems more appealing, but it would put some more cash in their pockets...
He's shown an interest in modded XBoxes...
:rolleyes: He brought this box along to a meeting with Bill Gates. Bill saw a demo of this, was quite impressed, and asked something along the lines of "How can we engage this community?" - instead of saying something like "How can we squash this?" It's long been on the back of everyone's minds in the Xbox group - how can we get students and hobbyists involved without disrupting the console business model? The good news is that it's still on the radar, we'll see what happens in the future.
from Ars
A little over a year ago, one of the people in my group modded an Xbox, installed Avalaunch, and put all sorts of Xbox mod scene apps on the box, like XBMC, RSS readers, etc, along with some "backup" games.
The problem with mod-chips for the business model is that console makers are losing a lot of money on the hardware. This loss is then compensated for by increasing the prices of games.
This is fundamentally the same issue as in the mobile phone industry, where the phones are often sold at steep discounts - in exchange for being tied to a contract with increased costs of actually using the phone and/or a monthly charge.
At least here in Denmark, rules disallow many "deceptive" business practices, resulting in virtually all subsidized phones being sold with a contract that forces 6 months of payment (after which the monthly charge is typically reduced to zero (unless the plan includes free minutes / text messages or the like)). Additionally, stores are required to give the total (minimum) cost of the phone over the contract period. This allows consumers to easily compare prices.
Thus consumers are perfectly willing to pay for a mobile phone by laying down X dollars now and Y dollars a month for Z number of months. Maybe some are deluding themselves into thinking, that they're actually getting something for those Y dollars a month, but I'd wager most aren't.
Why shouldn't this exact same "solution" work for console makers? Especially now that consoles feature internet accounts.
Microsoft could then sell its console for the same price as before, but include a contract for 6 months of "Xbox Live Diamond" access at some monthly charge.