XboxOne and the First Sale Doctrine

[Cornelius]

Is this (potential) scenario with 2 competing models exactly what the big publishers want to see? So looking at it from the publishers' perspective, they get a real world test to see which route makes them more money. I believe that Microsoft has enough customer loyalty that they can go as severe as they want with DRM and no-used-sales and still remain in the market. Sony can proceed with the same situation on the PS4 that they have with the PS3. Then with some guessticorrection for lost customers/potential sales the publishers can see if their increased revenues on the XboxOne from their cut of the used sales is worth the overall fewer customers. And the reverse with the PS4, plus have it as sort of a backup in case consumers really do just wholly reject draconian used sale policies in favor of PC gaming, mobile platforms, Nintendo, etc.

I dunno, I guess that is kinda dumb since the publishers really just want it all to go digitial (and it will at some point). Maybe I'm just cynical and believe that the big publishers work closely with Sony and MS and 'they' have this all worked out together.

[TonyTheTiger]

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.

[Cornelius]

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.

That's well-put. I guess I don't see MS sales ever being low enough that the big publishers are going to pull games. In other words, EA is going to make Madden for both systems no matter what. Smaller publishers and bad porting are a different story and could be enough to lead to what you describe.

I dunno, I've avoided any of this speculation until today because we don't really know anything final, just getting sucked in.

[Buyatari]

Ok for the sake of argument perhaps the "used market" is safe.....

What of the classic market? After Xbox one is no longer supported none of these games will play. You have to log on once a day so even the games you yourself purchased on day one will no longer work on the system?

[TonyTheTiger]

I'm convinced that preservation will be possible through some form of circumvention (or "piracy" if you want to go there). Take the Satellaview as an example. While not perfect by any stretch, it is still pretty well preserved when you factor in the time period and the strange nature of the software. And there are still discoveries being made and emulation progress to follow. With modern technology and more people today not only playing games but actually being concerned about their preservation, I have a hard time believing that stuff like DLC, digitally distributed software, and the Xbox One will ever be "lost." It'll be a bigger pain in the ass but I don't think we're in for some bleak future with entire console libraries vanishing into the ether.