Well, that was fast.
Microsoft’s biggest mistake wasn’t them instigating convoluted and unpopular used game and online policies, and it wasn’t them reversing said policy when it proved a public relations nightmare. No, their true guilt is their utter lack salesmanship—their lack of skill in selling this idea as a benefit to the consumer.
Was there any? Apparently there was. Analysts looking back out now claim you would’ve been able to lend or trade your digital games, which you could never do before, and that all this was meant to smooth out the transition to a fully digital future where users could trade and lend digital games online. Would this have happened?
The other point is that with limiting used games, allowing publishers to earn revenue from used games, and with curtailing piracy, new games would cost less. I keep reading or hearing this as an excuse from both company executives and media analysts, and it makes me laugh. It would never lead to cheaper games. The prices of games are not set by supply and demand; they are not set my calculating lost revenue from used games or piracy. Psychoanalysts and economists have calculated the perfect price point we’re willing to pay for a new release game and it will remain at that price for a long time, proven recently with both PS4 and Xbox One announcing the prices of their games being–shockingly–the same prices as games are now. I’ve read that some people are actually surprised by this. When the PS1 was mainstream, piracy was virtually nonexistent on that console and yet new release games cost, at least in Canada, about $79. $79. I don’t know where some people are claiming old games were cheaper. Later, they were. I bought Xenogears for $39, I thought that was pretty good. It was used. For $39. The $59 price point fits a lot of budgets. Companies are also putting out limited editions costing more for those with more coin in their pocket, so they’re trying to justify selling items for more, but like disc-based movies which almost always sell for 24.95 unless it’s a Disney direct movie or an independent flick like Moon or Monsters, prices seldom change in this industry.
And I also want to stifle another rumor that it’s GameStop that’s forcing digital retailers to sell their online games for the same price of physical games. That’s totally not true. Publishers don’t want to kill GameStop…yet. Digital downloading needs to become more mainstream. The moment the ratio reaches the level of penetration equal to or greater than the digital downloads in the PC market, you’ll start to see more and more mainstream games being released exclusively to digital.
Let’s talk widescreen movies…and no, I’m on topic. For decades, the format of choice was the abhorrent pan n’ scan, with widescreen being reserved to laserdisc. I remember manning the Titanic video release release–yes I’m old–and having each ten-row displayer only having two rows of widescreen. As DVDs came to dominance, the ratio of pan n’ scan to Widescreen started to sway in the favor of the best format. Studios began tracking the quotient of movies returned to vendor, compared that with the increasing injection of widescreen TVs into the market and began a systematic elimination of pan n’ scan. This choice was made by retailers about the same time. I can tell you exactly when it happened. The Pirates of the Caribbean: Dead Man’s Chest. It was the first major DVD release without a pan n’ scan option. We’re approaching that same threshold with digital games. When Call of Duty’s digital download percentage passes 90%, physical distribution can wave its flippers goodbye. And if you think we’re already heading in that direction, there’s yet another tactic game publishers are pulling: limited distribution. The quantity of physical copies made of a certain game is dropping. Fast. Already, game publishers have aped a tactic used by certain PC companies, where the box you purchase off the shelf only contains a website and a unlock code to download the product off the net. Valve did that with Left for Dead. And, shockingly enough, Sony’s pulling it now with Last of Us. They knew they had a hit; they lifted the review embargo a week early (though part of that was because of E3). They were confident of stellar reviews…yet there is a massive shortage of the physical game, forcing EB games and Gamestop (technically the same company) to sell cards with digital unlock codes. Oddly, consumers aren’t too impressed. Why bother driving to GameStop to purchase a piece of cardboard. You think the retailers want to sell a piece of card. Can’t resell that, now can you?
So this turnaround from Microsoft is them realizing the public was not yet ready to adopt a totally digital future. Surely once the market shifts and the next consoles come out with massive hard disks and no optical drives, Microsoft may once again return to a business model which they believe suffered only from bad timing and bad public relations. They probably feel they didn’t screw up the Xbox One; they only couldn’t spin it well enough.
Final words on this…companies have a tendency to respond more to competition rather than consumer demand. So to those thinking Microsoft is legitimately answering consumer outcry in their policy change, like with what EA did with Mass Effect 3 (still bitter) then I’m sorry to disappoint you. More likely this is in response to Sony, not the consumer. If Sony had matched Microsoft point by point, there would have been no reversal.