| OfficialIntel | Date: Monday, 2012-04-23, 7:54 PM | Message # 1 |
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| Four reasons against dropping the disc drive
Of all the Xbox 720 rumours sluicing up and down the internet, the one prophesying expanded online features is the most plausible. Roping everybody into online has been Microsoft's goal since the original Xbox launched: the firm has always regarded hardware as a conduit for its services and brands, rather than the jewel in its crown.
Third-party upset over the trade-in market has lent this agenda momentum - crabby industry protectionists look on digital distribution as a means of clawing back "lost revenues" from dastardly second-hand sellers. But dropping the disc drive would have been a priority regardless. The only question is when.
Microsoft has been gunning particularly hard for digital of late: the company unveiled a formidable array of music, movie and TV partnerships last winter, driving a threefold increase in Xbox Live video consumption. Go by the buzz alone, and the Holy Grail of software publishing - a direct relationship with entertainment consumers, with no troublesome brick-and-mortar retailers butting in on the fun - appears to be within Microsoft's grasp.
But is a download-only console genuinely possible at this stage? We think there's a way to go yet. Here are four missing links.
1. The internet couldn't take it
Digital games tend to be smaller-scale affairs for reasons other than the commercial ones. The internet's bone structure simply isn't robust enough to support a hundred thousand Gears 3 downloads on a daily basis: according to OFCOM, the UK's average broadband speed is a modest 6.2 megabytes per second, with the US average weighing in at 5.8 megabytes per second.
Multiplayer enthusiasts will probably have superior connections, of course, but not everybody's rocking 24 MB/s and up, and a significant minority continue to game offline. Speaking at GDC this year, EEDAR's Geoffrey Zatkin hailed the growth of online distribution but cautioned against premature talk of digital-only hardware. "Digital is going to keep getting stronger and stronger, but for the next console cycle, America is not yet wired enough to just say we're going to do away with retail altogether," he said. "There are too many people without broadband to make that happen in the next couple of years."
2. The hardware revenue model needs to change
It's tempting to suggest that Xbox Live should become a free service as the emphasis shifts away from portable storage media. After all, Steam, Impulse and the App Store don't cost you a penny to access. But the big digital sellers aren't necessarily the best precedents. Microsoft might do better to learn from the smartphone market, offering the console itself "for free" and recouping the cost in the form of on-going monthly payments which include online charges.
3. Game prices need to come down
Digital games cost less to produce and less to distribute than physical games. It's hardly unreasonable to suggest that a portion of the savings be passed onto us. The Games on Demand service frequently gives rise to good deals, like Tales of Vesperia for £19.99, but has also played host to some dubious ones, like Halo: Reach for £49.99. If consumers are to embrace digital, these high-wire acts need to stop.
We sincerely hope publishers take this particular point on board, because a digital-only console could be the so-called "B-list" game's salvation, enabling a healthy diversity of price points. Niche or under-marketed titles like Hunted: The Demon's Forge or El Shaddai suffer nowadays because consumers aren't prepared to splurge the full RRP for them, but retailers are unwilling or unable to sell them for anything less (assuming they stock them at all). Subtract brick and mortar, and the £20-30 bracket becomes viable once again.
4. The advertising landscape needs an overhaul
As we've argued elsewhere, brick and mortar stores are worth more than the revenue they pipe directly to publisher coffers. They're important sources of publicity, foisting the appeal of videogames on those who aren't hot-wired to NeoGAF. It'll take a dramatic change in how people consume media before publishers can safely remove storefronts from the marketing equation - more dramatic, even, than the quantum leap occasioned by the rise of iTunes.
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Why we're not ready for a download-only Xbox 720 - Forum
