And away I go…

In my opinion, that’s a total fail.

It also means the games cannot be played at all if you are offline, and that’s a giant lose. There should be some # of times you can play between verifications to make up for the shortfall.

While I haven’t gotten into it yet, digital distribution looks like a win for me too. I constantly hear how good the sales are on Steam, I just haven’t checked it out yet. Microsoft is soon going to be allowing purchase of full 360 games(not arcade games, the same stuff you’d buy off the shelf at EBgames) over Xbox Live. Apparently, the prices are going to be around 20-30 dollars American. That sounds like a really good deal, though I don’t think they’ll be putting new releases in there right away.

It also means some people who would NEVER buy their games at least buy them used.

There are three general price categories for people who buy console games:

1) The person willing to spend $60 for a game buys it retail and never gives it another thought.

2) The person willing to spend $40 for a game, buys it new for $60 with the knowledge they can get $20 back if they sell it used.

3) The person willing to spend $20 for a game waits for it to be used, subsidizing the people from #2.

This has accomplished a really amazing thing. You are now selling the exact same product for $60, $40, and $20, and as a result you are getting customers in all three of those price points. Producers of goods are ALWAYS trying to figure out ways how to sell the same product to different people for different prices. It is extremely hard.

Console game companies should be excited that they have backed into this, and just reap the rewards. Instead, they look at people in groups #2 and #3 as freeloaders. The truth is, they will never convert a high percentage of those people to group #1 no matter what they do. But they sure as heck can drive those people out of the console market entirely if they start cracking down on used games.

You’ll never see an aimbot or a wallhack on xbox live. Probably won’t see it on PSN either, though the playstation systems have shown some weakness in the hacking area(there’s some drama about Modern Warfare for ps3 being hacked recently). Even if somebody does manage to hack on xbox live, once they get banned, they’ve lost some cash and will have to spend more cash to get back into it. That acts as a deterrent, I think.

Microsoft is trying to create a business model where people are able to keep spending on games after they buy them. When games put out major content for free, that undermines the model. The paying for dlc model is actually a really good idea for gaming companies, as it makes them more money. It’s particularly good for console game companies, due to the used game market. There’s alot of drama about game developers not making any money when a used game is sold. If they actually charge for their dlc though, they might actually make some money off of that used copy of the game.

I buy nearly all of my 360 games used. It’s drastically cheaper than buying new games. I’ve actually bought dlc for a few of them. It still winds up being cheaper than buying the pc game and getting free content.

For hard core gamers, however, the used game aspect of console games is ENORMOUS. GINORMOUS. FRIGGIN HUGE. I believe that the ability to buy/sell used console games, along with rental options (video stores, gamefly, etc.) have played the biggest role in curtailing console game piracy. Ok, I’m getting off topic.

So what’s up with Microsoft forcing Valve to charge? Are they doing this because they don’t want there to be a “race to the bottom” between developers, where they constantly slash prices on DLCs, to the extent that then charging for DLCs becomes “lame”? Are they doing this to protect the payed DLC market?

I really don’t see mods ever hitting it big on the console. They go against the culture of the platform (reliable, consistent, always-works-the-same). Furthermore, while mods are a lot of fun, they require quite a bit of legwork on the part of the user. You have to browse sites for them, read descriptions, download, try some out, install, uninstall, tweak ini or config options, etc. This process will be pretty unwieldy on a console without desk + mouse + keyboard. While a few of the big, super popular mods might make it onto the console, that is going to be pretty limited.

I think it is important to note that while retail box PC game sales are lower than console sales, overall PC game revenue crushes console. Sales stats that always get reported only include retail sales, and not digital downloads or online subscriptions.

Total video game sales in 2008 was approximately $22 billion. Of that, $12 billion was from online PC games, and another $1 billion from offline PC Games. So $13 billion of the total $22 billion market is on the PC (approximately 60% of the market).

Obviously, I’d rather have the update for free, but if the content is compelling then I will shell out the $7.00. If it’s not, then I won’t worry about it – certainly, I won’t rush out to buy the PC version.

Sentinel