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Taking Gaming To the Next Billion Players
Hugh Pickens writes "June marks the launch across Brazil of Zeebo, a console that aims to tap an enormous new market for videogaming for the billion-strong, emerging middle classes of such countries as Brazil, India, Mexico, Russia and China. Zeebo uses the same Qualcomm chipsets contained in high-end smartphones, together with 1GB of flash memory, three USB slots and a proprietary dual analogue gamepad. It plugs into a TV and outputs at a 640 x 480 pixel resolution. 'The key thing is we're using off-the-shelf components,' says Mike Yuen, director of the gaming group at Qualcomm. This approach means that, while Zeebo can be priced appropriately for its markets — it will launch at US $199 in Brazil compared to around US $250 (plus another US $50 for a mod chip to play pirated games) for a PlayStation 2 in the region — and next year the company plans to drop the price of the console to $149. But the most important part of the Zeebo ecosystem is its wireless digital distribution that gets around the low penetration of wired broadband in many of these countries, negates the cost of dealing with packaged retail goods, and removes the risk of piracy, with the games priced at about $10 locked to the consoles they're downloaded to. Zeebo is not meant to directly compete with powerful devices like Sony's PlayStation 3, Microsoft's Xbox 360, or the Wii. 'In Latin America, where there's a strong gaming culture, that's what we'll be, but in India and China we can be more educational or lifestyle-oriented,' says Yuen. One Indian gaming blog predicts Zeebo will struggle, in part due to the cultural reluctance toward digital distribution and also the lack of piratable games."
Maybe the "pirating" is just a symptom of a failing business model, don't you think?
Why do PS2 games cost up to $100 there? Zeebo doesn't need to have this kind of margin to operate in if PS2s cost $125 and the games were $30-60.
If you look at the console market, you can see a distinct connection between console sales and the appearance of modchips (or softmods, where possible). It may sound odd, but the ability to copy a game actually increases your chances to sell a game.
How do you decide which console to get? Well, ok, not you. Take Jonny Averageplayer. He is in school and he wants a console. Which one will he want? Most likely the one his friends have. Why? Well, first of all of course to be part of the crowd and not the odd guy out with the "wrong" hardware, but also to be able to swap games with them. So being able to trade games around and to copy them is a key feature for this demographic. Now, which console will his friends have? More often than not, the one where copying is possible or at least easy.
Then there's the hardcore gamer crowd that want that latest sequel for their favorite game series. But usually, they come out in Japan and you're not, and with vendor lock in and distribution protection, you have to wait for months or sometimes even years. Will you wait? Nope. You will want a console where you can crowbar that location protection lock out.
This all leads to one ultimate problem of selling game copies: To make someone buy a copy of your game, he first of all has to have the matching console. You can have the best console in the world and the games can look a hundred times better on your hardware, and you can have the best copy protection (which is, as detailed above, actually keeping people from buying the console in the first place), if nobody has the hardware you should've made games for the inferior console instead if you wanted to sell.
So, in conclusion, the project won't take off. Nobody will want the console. 200 bucks can easily buy a used PS2 with mod chip and a load of other crap. And the ability to play copies.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Let's see - an XBox Arcade costs $200
Plus $300 sales tax. Seriously, Brazil has a roughly 150 percent tax on imported consumer electronics from the combined effect of the import duty, the value added tax, and the interstate commerce tax.
Here in Brazil we don't have official PlayStations (PS2, PS3 or PSP), or official XBox 306 or Wii. And this is why the black market is so strong, since is the only market.
The taxes to import an original PS, or any video game, are too high, some times more than 100% of taxes. And this is why Sony, Nintendo or MS won't create an official distribution of video games here, unless they assemble the consoles here, what will reduce taxes, but won't be cheap as it is in China.
So, the numbers for Zeebo actually are:
- A PS2 in black market is R$ 400,00 (US$ 180,00), and it will play any illegal copy of any PS2 game.
- A PS2 game is much more rich, even PSP has more quality than Zeebo.
- You can download a PS2 game from internet and burn a CD and play it on a cracked PS2.
- A illegal copy of a game in the black market is R$ 10,00 (US$ 4,54).
Note that the black market here is called "camelo", and is not something hidden in the "undeground" of the city. The "camelo" market is a normal place, sometimes looks like a shopping mall, and any one buys there, from a poor kid to a rich man, since is where we find this stuffs, and is not illegal to buy there, what is illegal is to sell imported stuffs without pay the taxes, what some stores at "camelo" does.
On the white market a basic PS2 is R$ 449,00 (US$ 204,00), and PS2 is a product better than Zeebo. But it won't play illegal copies, and a legal copy of a PS2 game is from R$ 100,00 to R$300,00 (US$ 45,00 to US$ 136,00).
You can buy a PSP in US starting from US$ 120,00, and it will be much better than Zeebo, and is portable.
The question is, a kid in Brazil will want to buy a Zeebo or a PS2? Well, starting at US$ 199,00 no one will want a Zeebo, and a PS2 will be less expensive in any point (console or games).
And just to do a checkmate, we can't forget the PS1, since Zeebo is almost a PS1 in quality, and the price is half of a PS2, a price that Zeebo will never have.
Anyone look at the specs of this thing? They mention its not ment to compete with the PS3 and 360 but in reality it can barely compete with the original playstation. Its basically a vastly overpriced cell phone game player for your tv...I sense an epic failure in the making.