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COMMENT | Microsoft's Capitulation: We're Not Ready For Our Own Digital Future

Matt Gardner
Digital Distribution, Digital vs Retail, DRM, GameStop, Microsoft, Playstation Plus, Pre-owned games, Retail, Steam, Xbox Live, Xbox One

I posited in my section for the roundtable article dealing with the aftermath of E3 that, if anything, this year's show had proved that we're not ready for our own digital future. Microsoft had put plans in place to drag a hefty corner of this industry a few steps further, kicking and screaming into real change and real transition. Instead of limiting themselves by appealing to lowest common denominators when it came to internet services, they'd opted to let that be someone else's problem, forging a controversial path ahead.

That controversy was understandable and expected. Ownership is a big deal.

We'd been begging for Microsoft (and EA for that matter) to show us something new, something forward-thinking and original, and they did just that. But they did it in the worst way possible.

I wrote an article a few weeks back, around the time that Adam Orth was finding out that in spite of most disclaimers that say "my views are my own" the Twitter jury can still find you guilty of misrepresenting the company for which you work, discussing the importance of clear communication, and of understanding consumer concerns.

COMMENT | Microsoft's Capitulation: We're Not Ready For Our Own Digital Future

Microsoft have paid the price for failing to express their vision for next-gen in a positive fashion. The advantages afforded by a system that has you constantly connected have been lost because Microsoft resorted to corporate doublespeak, long-winded, buzzword-stuffed rhetoric that serves nobody. The existence of Xbox Wire -- a website purposefully created to solve this problem -- was undermined by a wave of original press releases that served only to confuse and discombobulate. Don Mattrick's u-turn post was probably the most clearly written entry on the whole site up to this point.

It's enormously ironic that the most clear the situation had ever been came as the plan for digital domination was jettisoned, and that the mixed reaction which s followed were based upon people finally realising the ambitious nature of Microsoft's goals. Imagine if, instead of frittering away an hour on television, Microsoft had launched their Xbox One reveal with the statement of "Your Games. Any time. Anywhere. Anyone." or something to that effect. Imagine if, instead of swathes of sports titles, Microsoft had played to another of their biggest strengths, and made it all about Xbox  LIVE: the instant game switching, sharing Titanfall with a friend on the other side of the world, leveraging Twitch to livestream a Project Spark invention that cost nothing to build, and inviting your friends to play.

COMMENT | Microsoft's Capitulation: We're Not Ready For Our Own Digital Future

But perhaps most crucially of all, imagine if it had been crouched as an invitation rather than a command. I still fail to believe that there's no middle ground between the current status quo and a wholly digital future as originally envisioned by Microsoft. You can still use discs if you really want, Microsoft could have said. But join Xbox LIVE, embrace your digital future and you'll find a true gaming community, instant sharing with your friends and family, instant contact across all titles and apps, and an ecosystem that works towards lowering the prices of games by connecting consumers with creators and cutting out the middle man.

Games retailers, most heavily exemplified by the mighty GameStop and the subsidiary fingers they have in all sorts of corner pies of this industry (hello, GameInformer!), are holding the console industry back from hitherto unexplored territories. The distinction is important, after all, you rarely see anything more than the bare minimum of shelf space afforded to PC games if that, that the reason for that is simple: digital distribution.

The bad press Microsoft received over its DRM policies was justified, and they brought it upon themselves, making the situation worse by failing to address the issue. But the situation around pre-owned games has, for far too long, been used as a straw man to take the fall for revenue figures that come in below expectations. It's simply the symptom of a much larger issue: the inevitable collision between the needs of creators and the needs of distributors and retailers. We could have quite easily have been turned, and by "we" I refer here to us consumers. Microsoft would have eventually stumbled upon the formula for showing off the Xbox One in a positive light, no doubt boosted by Titanfall, COD DLC timed-exclusivity, and some treats for FIFA and Madden. We gamers are pretty fickle: show us games that we want and we'll pretty much forget about the rest. And that's actually ok.

COMMENT | Microsoft's Capitulation: We're Not Ready For Our Own Digital Future

But retailers, especially large behemoths like GameStop, have struggled with the disappearance of the high street, the increasing shift towards the digital, and have had to create more and more campaigns that serve their own exclusive ends to stay afloat. They are not ready for such a big shift away from physical media because a quick glance ahead in time suggests a future where they're no longer relevant or needed.

Competition is good for business, and Steam has had to make concessions as it's seen more digital distributors enter the market, particularly those that don't require a clunky client or an internet connection (yes, Steam Offline is a thing, but it's a pretty fiddly, unreliable thing). But we've reached a point where two entire elements of our industry are now in co-opetition with one another. Retail partners help with distribution, but they also restrict future opportunities, prevent low digital costs on console by their very existence, and their survival is dependent on tactics that take profits away from creators.

The solution will come in the form of subscriptions, which we're already seeing. The question of how you encourage your install base to buy into a connected digital experience is answered in Playstation Plus and Xbox LIVE Gold, or at least should be. Invite consumers to change the way they game, invite consumers to take advantage of new opportunities afforded by such connectivity. Invite consumers to take advantage of prices that do undercut physical media, because there's no reason why digital prices shouldn't!

COMMENT | Microsoft's Capitulation: We're Not Ready For Our Own Digital Future

As always, the answer is found in giving consumers options. Tell us to do something and you'll be met with scepticism in this world of instant information in which we live. Invite us to discover things for ourselves, give us ways to opt-in, or not as the case may be, use positive incentives, and the results will follow. In a competitive market, the carrot works far more effectively than the stick. We might not quite be ready for our digital future just yet, but I don't feel that simply floating along as we are now is the answer, and thus Microsoft's u-turn seems to be missing the point, at least as far as consumers are concerned.

But that's because we're just caught in the middle of the real battle inside our industry, hoping that the collateral damage doesn't affect our wallets or our rights too much.

Add a comment3 comments
Quietus  Jun. 21, 2013 at 13:08

I think it sounds like the usual case of missing the point when they talk about 'digital future'. Everybody is more than happy with receiving their games via a digital distribution platform. The problem that people have is with ownership.

If I buy a game, then it's mine. I don't expect to have to connect to anything to verify it, nor do I expect it to come with terms and condition or limitations. I expect to be able to play it when I want, where I want, and how I want for as long as I want.

Last edited by Quietus, Jun. 21, 2013 at 13:08
Aelynn  Jun. 21, 2013 at 13:29

Hear, hear.
And the fact that they insist on charging full RRP for a digital copy of a game that I can buy for £5 online. I'm perfectly fine with waiting 48h if it means I can do what I want with the game later, thank you very much.
Unless they end up with a price structure like Steam, I'll never buy digital copies.

Quethas  Jun. 21, 2013 at 16:49

This article sums up my own thoughts on the issue pretty well, great read.

On the one hand, as a Sony supporter I was glad to snicker at Microsoft's failures, but on the other hand, as a gamer it was interesting to see this dynamic relationship within the industry between hardware manufacturers, publishers, retailers, and consumers play out. It's a storm that's been building for years and hopefully this is one of the final stepping stone towards a tenable distribution model for the future of the industry. The way I see it, if publishers want to go to a no resale model, that's fine with me (it's a shaft of a deal anyway) but the reason consumers go for it is that $60 a game isn't a sustainable price point, especially when the costs of distribution are dropping so drastically. If an indie dev can offer their creations at $10-$20 why can't mass publishers do it for $40 or even $50? This seems like a proposition consumers could get behind. Take the $60 price tag, chop $10 off the top and tell consumers "there's your resale profit, right up front!" and meanwhile save, I don't know, maybe $20 off the retail price from eliminating the retailer's cut of profits as well as the packaging expense, and broaden profits at the same time. All of this and it's a positive to the consumer, their games got cheaper. The retailer gets the shaft, but that's the way it's heading in all sales markets.

Just my 2 cents.

Last edited by Quethas, Jun. 21, 2013 at 16:50

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