Quote Originally Posted by Bojay1997 View Post
The speculation seems to be that Microsoft really doesn't care about the small percentage of the market that doesn't have reliable broadband Internet. While I am personally troubled by that position given that my brother was at sea with the US Navy and said that his Xbox 360 was the only thing that kept him from going stir crazy (they had no way of accessing the Internet other than at a few e-mail terminals), I understand the financial reasons for why that might not be their target market. Essentially Microsoft makes an overwhelming amount of revenue from a very specific kind of user with the highest attach rate for games and peripherals, who buy annual subs to XBL Gold and regularly buy DLC and digital only titles. Frankly, I suspect that people with poor quality Internet tend to be people with less economic stability who also tend overwhelmingly to buy less software and/or primarily used software or people who simply can't use the Internet because of their job or other factors. In a world where even this late in the cycle hardware only produces a very slim profit margin if any, those gamers are not of much financial value as used game sales and Silver XBL accounts provide little or no revenue to Microsoft.
The part that MS should be concerned with, though, is console attach rate. It's a lot easier to attract publishers when you can say "20 million sold" or "50 million sold." The more you pigeonhole your product, the more chances for the competition to become market leader as consumers are put off by the extra layers of complexity, even ones that may fit your requirements. And we know what happens when there's a clear market leader. There's usually a kind of unstable equilibrium at play once the console race determines a "winner." The more a console pulls ahead, the more likely it is for it to pull even further ahead as publishers start migrating toward the larger install base and consumers start migrating toward the larger library. And with the economy of 2013 vastly different from that of 2005, console sales will probably be slower as a whole compared to last gen which only compounds the problem. Microsoft is taking a gamble that the One will, if not "win," at least perform well enough to function as proof of concept so that the subsequent generation can essentially eliminate retail completely without any serious drama.