Microsoft

Why the Xbox One represents the future

Microsoft’s foray into digital distribution — and all of the perceived downsides — isn’t as risky as it seems. But can the current generation of gamers adapt?

Microsoft is a company that loves the long play. With massive cash reserves and a steadfast resolve, they’re wholly unafraid to risk early failure if they believe it’s going to pay off in the long run.

That’s precisely what they’re doing with the Xbox One.

At first it seems illogical. Suicidal, even. In one fell swoop, Microsoft have cut and run from many of the conventions that we’ve all come to expect from game consoles.

Before the Dark Times. Before the Empire.

Here’s how it works right now, and Lo, since the Great Console Era began:

• You go to a store like GameStop, or Target, or hey, maybe even Wal-Mart. You see some shinies, you pick one, you bring it home. Your hands are most likely grasping at the box.
• You open said box and pour through the thin booklet, if any. You grab the disc, or a cartridge of some kind, slap it in the machine and switch it on.
• The game starts. You play it. Yay!
• You are now bored of it. You take it the disc or cartridge back to GameStop and trade it as a down-payment on a new game. Or maybe you loan it to a friend. If it really “brought the fun,” maybe you keep it on your bookshelf.

Those expectations have been bred into us over the course of a generation. We’re comfortable with them. We understand them. We like them.

Now! Imagine a world where:

• Your game console is required to connect to the Internet. Constantly.
• You buy your games from these stores if you want, but they’re all available for purchase from a “marketplace” available on the device itself. (There’s that “Internet” thing again.)
• If and when you want to play one of these games, you pick it from the menu on the device. There’s generally no slapping in of discs or cartridges.
• The game starts. You play it. Yay!
• You are now bored of it. It sits there in the list, or possibly on some “virtual” bookshelf, collecting skeuomorphic dust.

That’s the world Microsoft wants us to live in with the Xbox One.

On the face, there’s a lot of stuff here to make one uncomfortable. Games have value, right? I certainly paid a lot of money for each one. I’d like to wring a little of that back out when I’m finished. I don’t want it sitting on some pixelated shelf. I want it sitting on a very real shelf, possibly at my friend’s house, because I traded it to him for some Pokemon cards. If I can’t do that, do I even own this game?

GameStop’s business is takin’ yo games and givin’ you pretty much nuthin’. And business is good.

It’s a strategy that’s led to a very vocal outcry from the video game community. The anger makes sense. The new strategy, possibly not so much. It seems like too big of a risk, and far too anti-user. “The users don’t want this,” we say. “They don’t like this model. It’s totally based on making the publishers happy.”

It’s true: this likely does make the publishers happy. But it also potentially damages Microsoft’s relationship with distribution partners like GameStop, who rely on used game revenue to survive. Why chance it? Do publishers just get so mad at used games?

A new challenger has arrived

Let’s look at the iPhone and iPod Touch. Just as we played with Nintendo and Sega handhelds, our sons, daughters, nieces and nephews play with iOS devices. Portable gaming is very much alive and well on the iPhone and iPod touch. To a lesser extent, on Android devices (including specialty devices like the Kindle.)

If you take a look at the distribution model for an iOS or Android device, you’ll see some similarities:

• They’re always, or almost always, connected to the Internet (either via Wi-Fi or Cellular.)
• All game distribution takes place via a central “marketplace” that is accessed through the device.
• If and when you want to play one of these games, you pick it from the list.
• When you’re bored with them, you put them away, delete them or forget about them. If you ever want them again, they’re in the Cloud for you.

This is a distribution model that makes sense to the next generation of gamers. It’s massively convenient for the publisher, for the gamer, and almost infinitely scalable without inflating your costs. As for what we give up? The next generation of gamers will age into “big boy” consoles that work the same way their iPods do. They might not even be aware of what was lost in the transition to digital distribution.

But these systems are going to be shipping this year, to the current generation of gamers. To us.

We’ve got a deep, deep love of the way it currently works. There’s that healthy serving of nostalgia, a pride of ownership, a feeling of control over one’s destiny, and indeed the destiny of one’s Sonic Vs. Knuckles cartridge. There’s a sense of value, that these tangible goods are worth something in part because of their tangibility. And one of cleverness, in that we’ve all come to believe we can subsidize tomorrow’s games with the ones we’re playing right now.

He also taught us to drink scotch and cheat on our wives, but we don’t have to buy into all of his lessons.

To walk away from all that is an incredible risk, and it makes the Xbox One an affront to some of the very things gamers hold dear.

Sony noticed.

As Don Draper taught us, nostalgia is delicate… but powerful. It’s also something Sony has seized on in a mighty powerful way as they take shot after shot at Microsoft’s new distribution model, reinforcing all of the things the Xbox One aims to leave behind — physical discs, used games, Internet-free ownership — and reminding us that their competitor, the PlayStation 4, keeps all of them firmly intact.

A quick glance in the comments section at The Verge will show you Sony’s strategy has garnered them the good will of the video game community. Used games, hard copies, that feeling of true value? They’re not meaningless. And I can’t trade a copy of Angry Birds for anything. But what about the long term play? Will kids care? Will they even know what they’re missing?

The chips are down and the bets are substantial. Sony appears to have sided with the gamer, and Microsoft with the publisher. Taken from another perspective,though, Microsoft is siding with the future. Apple’s App Store, Steam, Origin and countless other digital distribution methods have proven the model can work. Coupled with with the limitless possibilities (and revenue) those things provide, Microsoft will choose to make what’s seen as a radical shift and hope the thinking catches up.

Sony will put their chips down on the present, as they made plain on stage tonight at their E3 Press Conference in Los Angeles:

We believe in the model that people embrace today.
Sony President Jack Tretton

It remains to be seen who will be right. But rest assured: in spite of the hype, the haters and the negative press, this is a very long play. And Microsoft has proven they've got the resources and the patience to see it through.