Exactly one week ago, amidst a furious blizzard of consumer backlash, Microsoft announced that they’d made a mistake. Despite fervent, opinionated statements that cloud-based content and digital games were innovating pieces of the medium’s future, the company relented. Just days after E3, they announced the sharpest reversal in the industry’s history. Not only would used games be making a triumphant return, but all those totalitarian, always-online DRM rumors were finally put to rest. Maybe it was Sony’s competitive goading that finally pushed them over the edge, or perhaps it was the Amazon poll that showed the PS4 outvoted the Xbox One by a ratio of twenty to one. Either way, thousands of voices were heard, and the tech giant made a decision.
As you’ve likely already heard, a patch is coming for the Xbox One. It’s going to let users play disc-based games freely, sans install, and it’s going to let them do it offline. For probably ninety percent of Microsoft’s user base, this is tremendous news. For the company, however, this amounts to one of the clumsiest blunders in recent memory. Even worse, it wasn’t particularly necessary.
Right off the bat, many will argue that this was a crucial caveat, a mea culpa that allowed that console to stay competitive. Used and shared games, they might contend, are an essential piece of the ecosystem, and allow gamers a cheaper alternative to retail. That might currently be the case, but it’s certainly not essential to the healthy functioning of the industry. Don’t’ believe it? Let’s take a step back.
Imagine a world without a resell market. Even game sharing isn’t possible. Sounds terrible, I know. Games are only available from authorized retailers, who are permitted to price their content however they see fit. Most outlets stick with MSRP, which means titles cost $60 at launch. Thus far, practically nothing is different from our current system. Today, you might borrow a game from a friend, but it won’t be until they’re done with it, probably a few weeks in. One of you still had to buy it for $59.99. Alternatively, you buy a used, newly released game from GameStop, and it saves you five bucks. It’s hardly a dramatic shift, but surely you can see where people are coming from. No one wants to spend an extra five dollars.
Here’s where things start to even out. Moving forward in time, games gradually lose value. Suddenly people don’t want the sci-fi shooter that came out four months ago, they want the sci-fi shooter that released yesterday. If consumers won’t pay full retail, outlets lower their pricing. Even more common, they’ll put titles on sale to lure buyers into the store. GameStop, despite featuring some of the most rigid pricing in the industry, holds yearly ‘Buy 2, Get 1 Free’ sales. For the arithmetically-challenged, that’s 33% off, and it’s in addition to any price cuts that might’ve occurred over the course of a game’s shelf life. I would never argue that this, in itself, is enough to counteract the removal of used games. Yet, this is how the market works in conjunction with the current ecosystem, and it’s not awful.
Reverting back to our dystopian used-games-less future, let’s imagine how retailers would have to adapt to keep up their sales. Without the profits of the second-hand market, a store like GameStop is going to have to sell a disproportionately large number of shrink-wrapped titles. The thing is, gamers already have a set idea of what games are worth, and most aren’t likely to readjust that notion in the face of a new system. To compensate, retailers would have to sell games for much cheaper, and analogously, increase the frequency of their sales and promotions. It’s still not a perfect solution, but at this point, you’ll start to see how similar these two divergent paths are becoming.
So here we are. The year is 2013. Y’know that terribly oppressive future we’ve been envisioning over the past few paragraphs? Well, not only is it real, it’s alive and functioning. Even worse, people love it. It’s called Steam. For the uninitiated, it’s a platform for digital distribution that services users on PC, Mac, and even Linux. The software has 500 million users, and unbelievably, no sharing and reselling. So, how exactly do all these gamers manage without either saving a few bucks or playing a friend’s copy of Dishonored? It’s simple, really: sales and promotions. Valve, the company behind the service, understands consumer motivation. No one wants to pay full price if they can help it. More importantly, when a credit card is synced and something’s on sale, impulse purchases go through the roof. Steam’s user base is in love with the platform, and it’s because Valve provides a simple, convenient, and affordable way to build a game collection.
In essence, this is what Microsoft has attempted to do with the Xbox One. Their proposed ecosystem would be chiefly the same, but they botched the opportunity to present their creation in a positive light. The way the company handled the policy announcements, it seems, is what set them up for failure. Rather than leaking the details through vague, conflicting statements, the tech giant could have managed to highlight the benefits of such a model. Ever heard of the Steam Summer Sale? Consumers would’ve been remarkably more accepting. Instead, they positioned the policy change as something to be swept under the rug, a rights violation to be quietly ignored. You can’t blame Sony for trying to capitalize on this, despite the fact that the company continues to devote fistfuls of capital to their parallel ecosystem, the PlayStation Network. Funny how that works, huh?
As for the constant Internet connection—If they’re now planning a forced patch for everyone, couldn’t they just give us a few options? DRM is tricky territory, but there are plenty of ways to enforce it that don’t require 24-hour check-ins. A few possibilities: two versions of the console at launch, authentication through a mobile device, offline modes, and of course, the simple prospect of allowing the user to decide whether or not to take advantage of the console’s innovative cloud features. It’s a trade-off, a compromise. Yet, in the scheme of things, a truce is almost always better than surrender. Microsoft failed to find a middle ground, and instead opted for a complete reversal. The 180 puns were ubiquitous, and it proved that a little insight could’ve gone a long way.
Ultimately, the devil was in the details. Microsoft planned for the inevitable future, the kind that we’ll see come around in the next six or eight years. The problem, then, was how to ease the transition. People don’t seem to like change, and us gamers are a particularly savage breed. We find the smallest molehills, and then use the Internet as a platform to balloon them to gargantuan, mountainous size. Microsoft made plenty of mistakes this quarter, but forecasting the impending media landscape wasn’t one of them.