Xbox One in trouble.

[mouks]

R699-R799 for a new title not expensive?

 

[Garson007]

R699-R799 for a new title not expensive?

How much does MTG, Warhammer, horse riding or other small-time hobbies cost? Then you get **** like bikes, cars, travelling - all much more expensive. I'll admit that it is more expensive for South Africans, because of our low cost of living.

If the games themselves are pricing you (and this means a significant part of the market) out of the market and the publishers see that, then they will drop their prices for sales or permanently. As again there are no production costs and a sale is a sale.

 

[Ancalagon]

Everything. You can't sell, lend or exchange your digital copies. It also gives publishers the opportunity to adjust prices so that they can maximise profits.

Yes, true, and yes, Steam has grown the PC market. But if anything, the sales have reduced margins. Average selling price has decreased, not increased, while profits may have increased. Remember, this is about publishers trying to recoop some value on sales - I imagine to a publisher, its the same to them whether they are forced to accept lower margins via sales, or forced to have a used market they cannot control. They wont like either, they want high average selling prices.

Publishers have to sign off on sales, not Valve. They will not have sales if there exists a competing second hand market and the retail prices cannot be adjusted. Again, it's about maximising profit.

Wouldnt you agree that healthy sales would destroy used game sales by giving them no reason to exist? Why would I go spend all of the effort trying to find a used game is Steam will sell it to me for $10 anyway? Second hand markets only destroy new game sales if the price of new games is too high.

Trust me, the suits know how profitable sales are.

Do they really? Tell me then, why neither Sony nor MS seem to like them? In fact, tell me why nobody but Steam does? And while you are thinking about that, read what EA had to say about Steam's sales model.

The execs HATE Steam, with a passion.

 

[Mouse]

Their target market is the one that owns a HDTV and has an internet connection.

I have a friend who made the same assumption (in particular he thought that he cant use a new console on his old CRT TV)

He's typically been a console gamer most of his life but was going to build a PC with money he had saved because he assumed that he can't get a console due to the hardware cost being too high (both a new tv and the assumption that the console will be over R4000)
After I explained the situation to him, he went out and bought a PS3, some games and PS+

My point is, console manufacturers know that not everyone has decent internet and new TV's, so they plan accordingly (obviously have to exclude MS from this point now since they decided to screw gamers over)

 

[Garson007]

Yes, true, and yes, Steam has grown the PC market. But if anything, the sales have reduced margins. Average selling price has decreased, not increased, while profits may have increased. Remember, this is about publishers trying to recoop some value on sales - I imagine to a publisher, its the same to them whether they are forced to accept lower margins via sales, or forced to have a used market they cannot control. They wont like either, they want high average selling prices.

Repeat after me: No production costs. The margin is already the sale price. Two copies sold at $40 is better than one copy at $60. They know this. It is not like other markets. It's not about average selling price - it's about maximising income.

Wouldnt you agree that healthy sales would destroy used game sales by giving them no reason to exist? Why would I go spend all of the effort trying to find a used game is Steam will sell it to me for $10 anyway? Second hand markets only destroy new game sales if the price of new games is too high.

It complicated the market outside of the influence of the publishers. It also complicates the mentality of the consumers because they might feel they should be able to resell a digital copy because they can resell a physical copy.

Do they really? Tell me then, why neither Sony nor MS seem to like them? In fact, tell me why nobody but Steam does? And while you are thinking about that, read what EA had to say about Steam's sales model.

The execs HATE Steam, with a passion.

Again, steam only provides the platform for sales - the publishers actually have to sign off on it. Secondly this guy might be using a projection model that says 50% off gives better revenues than 75% off. I wouldn't read too much into it. However the fact that he says it cheapens the IP is just facepalm worthy.

I can however understand his outburst. EA is probably grilling him as to why Steam is doing so much better than Origin.

 

[Ancalagon]

Repeat after me: No production costs. The margin is already the sale price. Two copies sold at $40 is better than one copy at $60. They know this. It is not like other markets. It's not about average selling price - it's about maximising income.

Ah, but there is a production cost, there always will be. That production cost is fixed - its the distribution cost that is lower in the case of Steam. But even then, it isnt zero - Steam will take 20-30%.

If you thought you could sell 1 million games at $50 or 2 million at $20, which would you pick? Yes, I know that we all know that profits are generally higher with Steam sales. And most of the publishers (except for EA) seem convinced too, given how they join in on the bandwagon when Steam has big sales. But look at the XBL marketplace and Sony's store - do you see many sales happening there?

It complicated the market outside of the influence of the publishers. It also complicates the mentality of the consumers because they might feel they should be able to resell a digital copy because they can resell a physical copy.

I think consumers should be able to resell digital copies. Why not? They are already trialling a model that allows for the reselling of music, and I believe that EU made a landmark ruling related to enterprise software that said licenses could be transferred. Saying that licenses cannot be transferred is simply a convenience for them, a fiction. There is no rational reason for it to be true. Yes, Steam's prices are low enough that I dont care too much, but thats another debate. Anyway.

Again, steam only provides the platform for sales - the publishers actually have to sign off on it. Secondly this guy might be using a projection model that says 50% off gives better revenues than 75% off. I wouldn't read too much into it. However the fact that he says it cheapens the IP is just facepalm worthy.

I can however understand his outburst. EA is probably grilling him as to why Steam is doing so much better than Origin.

To this day, Origin simply do not have the same specials that Steam does. Can you think of any other retailer that does? EA did not retract his statement.

 

[madtza]

What does Steam have to do with used games?



When is the last time you bought a used console game? In fact, name me the shops in SA where you can get one - I can only think of one.

Like MS currently does with the XBL marketplace? yeah, they dont like sales very much. Steam is the only company forward thinking enough to do so, but remember the other thing that helps Steam is that their product catalogue is so huge.

Besides, you are thinking about this like a rational young gamer. Think about it from the point of view of a Microsoft exec - likely you came from a business, not gaming background, you dont know what Steam is but you think it drives turbines, you probably dont own an Xbox but maybe your grand kids do. They do not understand.



They arent trying to siphon off a stream of cash from used sales - they are hoping to prevent used sales entirely without acting like they are.

Why would piracy in the PC market be a good reason to not raise prices? You raise prices to cover your costs, and if piracy is driving your costs per unit higher by driving average sales lower, then you raise prices.

Over how many years has that increase happened?

I meant because of piracy they haven't been able to make higher margins and a reason why we haven't seen as much of growth in the PC space. Those increases have have actually been steady over the last 10yrs, just pointing out that they have gone up.

This isn't the answer I was looking for initially but I think the points you and Garson007 make have given a broader view of why they possibly decided to follow that route.

I can see the Steam model working to our favour in the long run, if they can get it right and try not screw us over.

All in all I don't think it's as clear cut as everyone thinks. There has to be a trade-off on Sony's side as well. Whether it's more expensive games(with 2 systems that are fairly identical this time around) or limited exclusives...or could be that Sony is not telling us the whole truth regarding it's agreements with publishers.

Edit: fix typos

 

[Maverick Jester]

Another question would be, are we going to see higher prices for games on the PS4? To me it looks like it's the Pubs(read EA) that are behind this with MS in bed with them and Sony out of favour(except with their in-house studios). All speculation but I'm just wondering how Sony were able to get out of this when they initially said "it was up to the publishers" when asked about 2nd hand games.

From what I have read, the DRM policy was Microsoft's idea, with the publishers just following suit. I've never been a fan of DRM- in my mind, if you treat consumers as criminals, then do not be surprised if they act as criminals.

This is the same stupid policy that is breaking the music industry- recording companies so intent on making money and ensuring that all proceeds of their work goes into their coffers, that consumers find piracy as an easier form of obtaining what they want.

 

[Ancalagon]

I meant because of piracy they haven't been able to make higher margins and a reason why we haven't seen as much of growth in the PC space. Those increases have have actually been steady over the last 10yrs, just pointing out that they have gone up.

What?

What does piracy have to do with margins? Please explain. Really not sure what you are saying here.

All in all I don't think it's as clear cut as everyone thinks. There has to be a trade-off on Sony's side as well. Whether it's more expensive games(with 2 systems that are fairly identical this time around) or limited exclusives...or could be that Sony is not telling us the whole truth regarding it's agreements with publishers.

Edit: fix typos

Sony has recently announced that it is up to third party publishers what DRM they want to implement. In other words, exactly as things are now. However, Sony first party titles will not have DRM.

I dont think there needs to be a trade off - most of the arguments about piracy and its impact on sales are completely bogus.

 

[Swa]

Well I guess this would mean more new games to be purchased and if you can't get more people to buy them current prices then you lower them enough to get more sales and whatever crumbs from the used market.

Another question would be, are we going to see higher prices for games on the PS4? To me it looks like it's the Pubs(read EA) that are behind this with MS in bed with them and Sony out of favour(except with their in-house studios). All speculation but I'm just wondering how Sony were able to get out of this when they initially said "it was up to the publishers" when asked about 2nd hand games.

What people don't get is that this is what publishers want. We might well see entire ranges of games exclusive to Xbox. It's a risk but if that happens it would have panned out for Microsoft. Sony is not officially supporting DRM but without the full details it may be up to publishers to implement their own.

Judging by the popularity of Steam it's really not going to make a big difference to sales even with a few vocal voices.

 

[AlphaJohn]

What people don't get is that this is what publishers want. We might well see entire ranges of games exclusive to Xbox. It's a risk but if that happens it would have panned out for Microsoft. Sony is not officially supporting DRM but without the full details it may be up to publishers to implement their own.

Judging by the popularity of Steam it's really not going to make a big difference to sales even with a few vocal voices.

Think most people are missing the "punchline"

Microsoft the console force Internet connection regardless of game type, or style.
Sony leave it up to the publishers.

What this means is that if a publisher want to make a PS4 game to phone home, Sony is not gonna stop them. So some PS4 games can still require internet to function. There are some E3 titles already forcing this ie: The Division and Destiny.

As for publishers support and exclusivity. Would you pick a console that only have a target market of say 1 million users or support both consoles and develop your own DRM to support the console that have 9 million users.

 

[Maverick Jester]

What people don't get is that this is what publishers want. We might well see entire ranges of games exclusive to Xbox. It's a risk but if that happens it would have panned out for Microsoft. Sony is not officially supporting DRM but without the full details it may be up to publishers to implement their own.

Judging by the popularity of Steam it's really not going to make a big difference to sales even with a few vocal voices.

Or, entire ranges of games will be exclusive to the PS4 because it is what consumers own. But yes- it is a risk, one that looks too great for Microsoft.

 

[Maverick Jester]

Think most people are missing the "punchline"

Microsoft the console force Internet connection regardless of game type, or style.
Sony leave it up to the publishers.

What this means is that if a publisher want to make a PS4 game to phone home, Sony is not gonna stop them. So some PS4 games can still require internet to function. There are some E3 titles already forcing this ie: The Division and Destiny.

As for publishers support and exclusivity. Would you pick a console that only have a target market of say 1 million users or support both consoles and develop your own DRM to support the console that have 9 million users.

+1.

I don't see how Sony lose here. They don't force DRM down your throat, but don't cut the publishers off at the knees either.

 

[Chevron]

While steam is awesome console people generally don't care about things like that. The average guy just wants to plug and play whenever, wherever. There the xbone won't work out.

The majority not commenting are those at home playing fifa locally with buddies and couldn't give two hoots about online. That's the real majority. The guys that want just give the game to a friend and say bring back next week. Those guys won't be buying the xbone. Sony has all those guys.

 

[Swa]

Or, entire ranges of games will be exclusive to the PS4 because it is what consumers own. But yes- it is a risk, one that looks too great for Microsoft.

There is an assumption that the PS4 will be the dominant console. Most consumers are actually not too bothered by the DRM so this is unfounded. DRM is what publishers want. Sony basically told them all to ef off. A rather bad move with the ad. It's tempting to take jabs at another console and nothing new in fact but imagine the backlash if a game actually does have DRM. Xbox exclusives are a reasonable scenario here. PS4 not so much. It's a risk yes, but if it payed off consumers will flock to the console with the exclusives. If it doesn't the most MS will lose is a vocal minority.

 

[madtza]

What?

What does piracy have to do with margins? Please explain. Really not sure what you are saying here.



Sony has recently announced that it is up to third party publishers what DRM they want to implement. In other words, exactly as things are now. However, Sony first party titles will not have DRM.

I dont think there needs to be a trade off - most of the arguments about piracy and its impact on sales are completely bogus.

No worries, I think we've lost each other on the piracy part, was agreeing with you that PC titles haven't really gone up by much in the last 10yrs so piracy can't be such a significant factor.

On the Sony giving the Pubs choice to implement DRM, that could actually go against them because if the Pubs all decide to go that route that would make them look like they lied to their users and pretty much on the same space as MS. Sony is just being smart in how they communicate the whole thing.
Sony's titles won't have DRM, most likely but I wouldn't rule it out completely and like I said this could mean higher priced titles for their console.

I think all MS/Pubs have to do is get rid of the 24hr check-in thing, which I think is ridiculous and maybe the 2nd hand market restrictions if they can help it (unless they can offer something better). I don't really mind having first-time activations and maybe downloading extra content.

BTW I'm a PS3 owner, just curious and fascinated by the different business strategies the two companies decided to take.

 

[AlphaJohn]

On the Sony giving the Pubs choice to implement DRM, that could actually go against them because if the Pubs all decide to go that route that would make them look like they lied to their users and pretty much on the same space as MS. Sony is just being smart in how they communicate the whole thing.
Sony's titles won't have DRM, most likely but I wouldn't rule it out completely and like I said this could mean higher priced titles for their console.

This has got nothing to do with Sony, and if Publishers do it themselves(Require Always Online for single player) its up to use the end users to show that we do not like this type of practice, by not supporting the games.

Oh and lets get one thing clear. All games, regardless of Publisher or OEM have DRM, just that Sony doesn't require you to validate the authenticity of your games online "Big Brother" style. In short they trust that their console's and DRM code on the discs are good enough to make sure you only use originals.

 

[saffakanera]

Only thing that can save Xbox One is http://research.microsoft.com/en-us/projects/illumiroom/

Discoball saves multi million Dollar console ****up of the century. Ya OK.

Anyways, pre ordered PS4, excited for the games.

 

[gregmcc]

MS seriously dropped the ball. I can't see any sane person picking the Xbone over the PS4.

+1

Maybe both if you are loaded but PS4 takes the cake

 

[prod]

"Fortunately we have a product for people who aren't able to stay connected; it's called Xbox 360"

-Don Mattrick, Microsoft's President of Interactive Entertainment Business