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Microsoft: Your DRM Policy Wasn’t Entirely ‘Bad’

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The media frenzy with Microsoft and the Xbox One continues. In a surprising turnabout, Microsoft has decided to reverse their Xbox One DRM policy. It turns out that vocal minority of whiny gamers wasn’t so minor after all. However, the cynic in me believes that pre-order numbers must’ve dropped at such an unbelievable rate that Microsoft felt compelled to respond in order to stay competitive against Sony’s PS4. But quite frankly, this was NOT the right move to make.

There’s no doubt Microsoft needed to respond to Sony after E3. But conceding on what was essentially the linchpin to their long term strategy was too reactionary. In some ways it reflects a lack of confidence they may have had in their original plan. If Microsoft was truly dedicated to moving gaming into a new digital age that benefited everyone, then they should have stuck to their guns despite the mountain of bad press. Instead, Microsoft backslides into the safer, short term bet of retaining their current customer base instead of betting the farm on the longer term rewards and learnings. All of this just smacks of weakness.

If anything, I was assuming if Microsoft scaled back on the mandatory functionality of the Kinect 2; if not stripping it out completely to cut back the price. This would have easily made it more competitive with the PS4. To date, I have yet to find any information on why the Kinect 2 is critical to gaming on the Xbox One. If any of you do, please share it with me. Removing the Kinect 2 would’ve been a more sensible strategy given the reservations many still have about it.  But this was a head-scratcher from day one. If they were going to make the Kinect 2 mandatory, why not just build into the system in the first place? This most likely would have greatly increased the manufacturing costs. But that’s a cost Microsoft can eat. And it would have easily justified the $500 price point. However, Microsoft is set and locked with Kinect 2 still being mandatory despite removing DRM.

The real culprit throughout this whole Xbox One debacle can be boiled down to one issue: Microsoft’s Ineffective Communication!

From day one, information from Microsoft has been a whirlwind of conflicting sources and vague half-truths. The message about Xbox One has failed to be consistent. Not only that, they’ve failed to really be entirely forthcoming about how the new DRM policy would help benefit consumers and studios.  Admittedly, there are sources outlining some of these details, but not many that clearly painted a picture of the how it translated to users in a practical manner. It wasn’t until I found this obscure article referencing an Xbox One engineer that the whole DRM really made sense. But when the head of Xbox is making flippant comments about disadvantaged consumers combined with everything else, how do you expect consumers to react? And lets face it, they knew enforcing DRM was never going to be a popular decision. But they should have done a hell of a much better job helping consumers embrace the changes and conveying the benefits that could follow.

PR 101: Don't make exaggerated comments.

PR 101: Don’t make exaggerated comments.

Losing DRM eliminates many of the planned services Microsoft had in mind such as digital access to games, family sharing, lower game price points and more. These were all great ideas building on what Steam is already doing. And honestly, it would have been worth the risk. But Steam also has an OFFLINE mode.  Why couldn’t Microsoft offer a similar option for Xbox One? They could have avoided a mountain of resistance around the required internet connection and the 24 hour check.

Seriously? What an empathetic and tactful message.

Seriously? What an empathetic and tactful message.

Many outlets view the reversal as a major win for consumers. And in some ways, it is (despite my cynical inference). But there’s no denying, games are transitioning more to the digital space. And Microsoft tried to embrace that change. Whether or not it was the ‘right‘ approach is neither here or there. The true winner here is Gamestop and other used retail outlets, not consumers. But this still put smaller studios in more danger of layoffs and closures as game production continue to increase. But as I mentioned in previous posts, the ballooning cost of game development really needs to be re-evaluated.  But more importantly, publishers and developers need to crack down on Gamestop and other used retailers for lost revenue. There’s no sound reasons publishers and studios should not be getting a cut from used games sales. That dynamic should have been resolved by now. There is a solution in that relationship, and it’s not by passing the cost down to the consumer.

The DRM reversal also raises a few new questions such as: what does this mean for indie developers? Will the XBLIA space operate under the same manner or is it it still closed off? What does this mean for digital downloads, especially new titles? What about cloud gaming? Sony is already ahead of the curve in this regard. For quite a while, the Ps3 has been offering day one digital downloads for new titles. Sony is poised to stab the knife further into Micosoft’s back if they can offer day one downloads at discounted prices, say $49. And if the rumors of cloud gaming for PS3 titles on the ps4 is true, Microsoft has a lot of catching up to do.

Sadly, even with DRM removed, the Xbox One just doesn’t come off as a more appealing option over the PS4. Bottom line: Microsoft still has a more expensive console with minor issues lingering around Kinect 2. It would have been really interesting to see what Microsoft had in the works and how it played out. One thing is for certain: this console war just got a whole lot more boring. Now we have two similar systems that weren’t event that revolutionary to begin with. Congratulations gamers, your voices (and complaints) were heard loud and clear.  Now lets see if you’ll be happy with the fallout of what’s to come.

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XBox Done!? Is Microsoft Losing Focus or Over-Reaching?

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Courtesy of Stevivor.com

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Video Game Budgets: What’s Going On?

A few weeks back, I read an article with EA head honcho, Frank Gibeau. And one statement especially jumped out to me:

“In general we’re thinking about how we make this a more broadly appealing franchise, because ultimately you need to get to audience sizes of around five million to really continue to invest in an IP like Dead Space. Anything less than that and it becomes quite difficult financially given how expensive it is to make games and market them. We feel good about that growth but we have to be very paranoid about making sure we don’t change the experience so much that we lose the fanbase.”

This strikes me as odd and flat out preposterous.  I’ve always been curious about video game budgets.  They just keep growing and growing.   I’ve tried poking around for a few detailed breakdowns with no avail.  But something is not adding up.  These budgets run more than many Hollywood movies.  That alone is crazy.  Once all the costs for licensing, royalty fees, art, QA, post release support and all that is factored in, you’re already looking at pretty chunk of change.  And don’t forget marketing / PR, that alone is sometimes more than the cost of the game itself.  Talk about outrageous, but we’ll save that topic for another time.  In the end, the budget for a standard console/PC game shouldn’t run more than a few million.  So where are they coming up with these inane figures like $25-$100 million?  And what kind of metrics ans analysis are they doing that indicates the need for so many buyers to justify a franchise.  In fact, I’d really like to see a case study detailing video game production costs & sales in contrast to other industries particularly movies and other technologies (laptop, mobiles, etc.).   I realize that sometimes there is a price to be paid for quality; but worth 500 million users?  I highly doubt that.   Again, something is NOT adding up.

The sad but current state of video game budgets

And is it really necessary?  The need to appeal to a broader audience is just a systemic of business in general.  But many franchises, and games in general, are starting to suffer with dwindling sales month over month.  Typically these days, a standard AAA game starts out as a first person shooter (FPS) built on an Unreal Engine with a tacked on gimmicky multiplayer mode.  And now it seems, they’ll be more co-op.  I, personally, love co-op mode; but it seems that co-op today translate more into action shooter.   That aside, including all these features quickly add up to a pretty penny.  But do these companies even considered if it’s germane to the business or the final product itself ?  Why does a game such as Dead Space and Assassin’s Creed need MP modes?  TellTale is already making a phenomenal Walking Dead game, is it really necessary for Activision to make one as well (which, surprise surprise, will be a FPS)?  To me, it seems like a massive waste time and resources  when they would be better off capitalizing on different markets. Do they really think they’re gonna capture that many more gamers with such a such a commonplace format?  I’m not saying they should ignore these kind of opportunities.  You never know what could happen.  Case in point, I thought adding MP to Mass Effect 3 would be a colossal failure.  But it turned out to be a massive success.  So I’m all for trying new ideas, just maybe in a different manner.  In fact, I’d love to see the numbers around these figures.  It may be worth holding off some new features as optional DLC only to be included in future installments based on a scale of their popularity.

But even if that were the case, it still doesn’t account for the absorbent budgets.  Countless indie developers have found marginal to great success producing games on a shoestring budget.  Why don’t major publishers release smaller titles in a similar manner more often?  Everyone wants to produce the next biggest hit, but wouldn’t it be more prudent to release a string of lower budget titles to help back bigger releases?  Movie studios release generic romcoms (romantic comedies) and other low budget clunkers all the time.  That’s possible because studios know there’s a market out there willing watch them.  Even though movies and games are two different monsters, studios should know there’s a similar (huge) contingent of gamers that’d like low budget title.  Low budget titles doesn’t mean low quality.  If you need proof of that, look no further than the countless indie developers and other standard titles that have found great success with not even a 1% of the budget.  Just like mindless popcorn flicks, sometimes all a gamer wants is just a regular game, not an over-produced blockbuster.  But game studios are very risk adverse.  The common excuse is that the physical production and release costs is not worth it, especially if it flops.  That and they’re pushing gaming more to the digital front.  Regardless of the chosen avenue, companies are missing out on a sizable potential market.  They already have a dedicated segment of gamers on lock (and potentially more).  Gamers like me aren’t going anywhere.  This is no excuse for developers to become complacent and produce cookie cutter crap.  But it could allow studios and developers more opportunities to take new risks.

All said and done, something needs to happen with the heavy imbalance between budgets and the decreasing sales.  I sure as hell don’t have all the answers but based on declining sales, the business aren’t just as clueless in some ways.  Right now, there are more than a few lucrative opportunities and markets the game industry capitalize on they’re just ignoring or frankly how no clue how to.  But I just hate seeing the traditional console market suffer from their inability to stick to basics and not take advantage of an already, dedicated fan base.  Like the saying goes: if it ain’t broke, don’t fix it.   And right now, there’s too much fixing going on.

What do you think people?

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The Psychic Costs of Today’s Gamer

As much as I love gaming, I’ve noticed my buying habits have taken somewhat of a gradual decline.  I’ve become extremely more sensitive to what I’ll spend my money on.  Up until a few years ago, I had a massive collection of video games.  Seriously, I had a closet packed with boxes full of gaming nostalgia.  Each box dedicated to specific system followed by genre sitting in pristine condition.  But today?  Looking at my collection, I estimate about 30 games across all three major platforms.  That’s still a sizable amount or more than your average casual gamer. But it’s nowhere near the pack rat status I had before.  One day I’m sitting on a quintessential library of video games throughout the generations.  But now I’ve scaled back to the bare minimum.  So what the hell happened?  Despite brief stints of unemployment, social / relationship issues, age, and whatnot; that still doesn’t account for the drop-off in my purchasing habits when life is on the up and up.  

A few months back, renowned author, Malcolm Gladwell, wrote a piece regarding the NBA lockout: the psychic benefits of owning a sports team. Basically, the gist is that most (NBA) owners derive a greater value / pleasure from owning items (in this case, teams) more than what they’re actually worth from a market valuation standpoint.  The whole notion of psychic benefits is to evaluate the level of stress involved when considering a transaction or facing a dilemma.  It’s the reason why stores offer rebates or attractive discounts on extra accessories when you’re contemplating buying that pricey, new laptop.  It’s the reason companies and recruiters offer lucrative signing (or referral) bonuses when scouting new talent.  All of this is to help alleviate the psychic cost (i.e. stress) of the situation.  Naturally, I began to wonder how this would relate to the gaming industry.  And it seems to apply just as well.

Same cost, Diminishing Value
Video game MSRP’s (Manufacturer’s Suggested Retail Price) have remained relatively steady throughout the generations.  However, I do believe that the majority of today’s releases are grossly overpriced given the quality of their content, especially for single player games. Granted, the criteria for what qualifies as a $60 game is debatable in itself. What can’t be disputed is the production quality of a game. Case in point, there’s no way in hell a titles such as Hunted: The Demon Forge, Spider-Man: Edge of Time, or even Thor contain the same level of attention and detail as say, Uncharted 3: Drake’s Fortune or even a lesser known gem, El Shaddai.  But I would be more inclined to buying games if they were released at a more reasonable price point.  The problem I face buying games today is twofold:

  1. I feel like I’m overpaying for a half-baked product (see Homefront)
  2. If there’s a generic multiplayer (MP) mode is tacked on, I feel like I’d only get half the value since I’m not a fan MP modes. This is the main reason why I skipped out on the latest released Call of Duty: MW3 & BattleField 3.

This is where the industry is failing.  So much energy and money is dedicated to hyping up AAA titlesm most of which are similar to each other where many of them fall into familiar territory too easily.  It’s no wonder they turn into massive flops (anyone still even playing Brink or Rage).  To me, it’s not worth wasting money on cookie cutter games I’ve already played for the past decade.  My buying influence is furthered weakened when a generic multiplayer mode is needlessly shoehorned in (see Dead Space, Assassin’s Creed, etc).  I’d rather play something that’s a bit more fresh (or shorter). As such, the psychic benefits I used to gain from most games has gradually diminished as a result of all of this.

Lately I’ve come to enjoy bargain bin titles more than many mainstream hits.  They’re short (5-10 hours), relatively simple to pickup and play, and they’re just as fun.  There’s this flawed conception that “cheap” games are bad games.  This is an area where the industry could really make a bigger impact.  These smaller, single player games could yield a larger return with a few tweaks the current model.  Think about it: cheaper production costs would allow developers to explore new ideas / gimmicks in smaller samplings instead of hedging their bets on expensive blockbusters.  Furthermore, it’d free up more capital to actually to market these “standard” titles. Plus, marketing a base of “standard” titles would allow people to move on to other games faster.  It would be even more awesome if these games were initially released digitally, not 3-6 months later when they’re well forgotten. Not to mention, more resources could be delegated to promoting commercially viable games from independent developers. This is another area that the industry continues to fail capitalizing on.  This year alone I’ve spent a fair amount of money and time playing indie titles that could make a commercial impact had the right parties taken notice. I’m not saying the large, AAA hits need to go away.  We still need those; I love those!  But we also need to broaden our focus and recognize what the community outside the majors have to offer.

Peter Pan No More…
Yep, I’m getting older.  The allure of having a mountain of games, midnight game releases, and trumped-up special edition releases just aren’t worth the hassle (or money) as I get older.  I’ll always be a nerdy gamer and I’m glad to help the culture evolve.  But as mentioned above, my priorities are shifting as I slowly become an adult.  There’s a silver lining to be found here in that gaming has transformed from being a mere “kid’s hobby” to a hobby people of all ages enjoy (whether they want to admit it or not) or even productivity applications (see Gamifcation).

I’m pretty confident I’m not alone in sentiments. But the gaming landscape is changing and expanding at an incredible rate.  Casual & mobile games are taking off and console gaming is starting to shrink sales wise.  If the industry wants to stay competitive and retain & grow market demographics, it will need to adjust their brand offerings & pricing model accordingly.  Soon enough you’ll find more gamers such as myself skipping out on even more games and transitioning to more suitable options.

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