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Opinion: Xbox One didn't need the pushy DRM to further the medium Exclusive
Opinion: Xbox One didn't need the pushy DRM to further the medium
June 20, 2013 | By Mike Rose

June 20, 2013 | By Mike Rose
More: Console/PC, Business/Marketing, Exclusive

Although there's been huge amounts of pressure placed on Microsoft the last couple of months regarding its various DRM efforts for the Xbox One, it's fair to say that no one could have seen this U-turn coming.

Last night, Microsoft updated its Xbox One policies, removing the touted 24-hour connection requirement, removing used game limitations, and killing the regional restrictions. The internet exploded, with the majority of people welcoming the news.

Of course, whenever an event such as this occurs, you always get people arguing the other side of the story -- it's only healthy to explore all possibilities, after all.

Notably, there are now numerous features of the Xbox One that have been removed during the cull, that could have potentially been a positive move for the industry as a whole.

But let's put this as candidly as possible: It was down to Microsoft, and Microsoft alone, to decide what stayed and what went. For whatever reason the company chose to make the announcements yesterday -- be it pressure from players, pressure from publishers, competitors' strategies or a mix of everything -- Microsoft chose to remove each of these features, and blaming the people who demanded a strategy change would be a remarkably misdirected thing to do.

What's gone, and why?

A new way to share your games

The main sticking point that a lot of people appear to have is that the friends and family sharing system -- by which players can purchase a game, and then share it with nine other people -- has now been removed.

It was clearly a great feature, there's no doubt about that. Not only would it mean that you could potentially buy games jointly with friends, paying just once for you all to play on your individual consoles, but it also made the act of sharing games with friends so much easier. No longer would you have to give the game physically to a friend, and then wonder when they're going to give it back -- it had all been streamlined in a rather lovely way.

But here's the thing: Ask yourself why Microsoft included this functionality in the first place, and why they have now removed it. You could arguably say that it was a bargaining chip. The DRM system had been put in place for the aid of publishers, not players, and this sharing option was Microsoft attempting to provide a happy medium, by which the pushiness was balanced out with some potential good.

If you need proof of this, consider the following: Why has Microsoft removed this functionality now? How exactly is sharing your game with friends connected to a 24-hour connection requirement? Does it really have to be?

When the PlayStation 3 first launched, you were able to share any purchased PSN game with up to four friends, simply by logging in on their PS3, downloading the game, and then logging back in as them -- voila, they had the game too now. This is essentially the exact same system that Microsoft was touting, albeit with a smaller number of potential sharers (although realistically, how many people need to share a game with nine other people?)

Then, in 2011 the number of people you could share your games with dropped from five to two. Although Sony never explained why this change was made, it's not difficult to conclude that publishers (or at least sales figures) will have been involved in the decision.

What we can take away from this, is that you don't need a pushy DRM system in place to offer this sharing system, as Sony has so kindly demonstrated. Rather, Microsoft has removed this functionality for the purposes of sales, rather than as a direct result of people complaining about the DRM. It's no one's fault other than Microsoft's that this sharing functionality is no more.

And if you want to argue that Sony's system was for digitally-downloaded games, while Microsoft was offering a system for sharing retail games: Why isn't the company still allowing people to share digital games with nine friends? Surely that would be the very same thing, and would still be a welcome addition, without the need for the pushy DRM?

No need for the disc

Microsoft has removed the ability to play retail games without having the retail disc in the system, which also means that when you visit a friend, you'll have to take the discs with you to play.

This is as a direct result of removing the 24-hour connection check: If there's no way to check whether a person owns a retail game, then Microsoft can't exactly be handing out digital versions willy nilly for people to play while visiting a friend, simply because they claim that they still own the disc.

But there's clearly a middle-ground that Microsoft is refusing to acknowledge here. Surely some other form of authentication could be put in place, that wasn't as ridiculously intrusive as checking I'm online all the time, yet still allowed me to prove that I owned a game when I visited a friend? Simply cutting the feature altogether doesn't exactly show that Microsoft is aiming to push the medium.

And there's another rather important element to consider too - that the vast majority of games are now increasingly going digital, and within the next decade (i.e. the lifetime of the Xbox One), we're no doubt going to see retail games fading out even more so that they already are.

Therefore, the majority of the games that you'll want to take to your friends' house will be digital anyway, and in turn you'll be able to log in to your Xbox One account on a friend's console, download a game, and play it with minimal fuss.

We should be striving to advance the digital sector of the video game industry, not putting regulatory systems in place that impede all players, simply to make the retail game business sustainable.

And for those people who rely on retail games, and aren't in the position to download games, or perhaps don't have good enough internet speeds to delve into digital so much -- this 24-hour connection checking system wasn't exactly going to be their cup of tea in the first place, so they aren't exactly going to be mourning the loss of this disc-removal system.


The other big talking point is the removal of the used games system, and digital trade-ins. Players can no longer trade in their games online, nor will publishers be getting a cut from used game sales.

Let's make this abundantly clear: Microsoft had not given any concrete information regarding how any of this was going to work. The company had said that systems were in place to allow for this functionality to occur, but had been extremely tight-lipped about what was actually going on.

We can stop mourning the death of digital trade-ins as well. Why exactly would we want a resale system that was tightly controlled by publishers, in favor of the simple act of selling your own property however you choose, as we've been accustomed to for generations, and as is our legal right?

As for publishers and developers missing out of a piece of the resale pie, there's absolutely no evidence to suggest that getting rid of used games would lead to bigger profits for these companies. In fact, a recent study into the matter suggested that eliminating used game sales and keeping current pricing models might actually lead to a 10 percent overall drop in profits.

At the end of the day, if you're upset about some of the features that Microsoft has removed from its Xbox One console, then you have every right to be upset -- but if you're directing anger at those people who complained about the console's DRM efforts, then you're aiming at the wrong group.

Microsoft had the final say in all of these decisions, and if the company has cut features which could potentially have been great for the industry, that's down to Microsoft, not players. To lay the blame on ourselves would be to let Microsoft off the hook, and then some.

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Jed Hubic
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I think people have a right to be angry at the cynicism of it all. Some of us saw Xbox One going to a Steam like model that could potentially affect prices down the road and provide a more direct link from developer to consumer. If people think a PS4 is much better because its a ps3 with newer graphics, fine, just don't ever complain about AAA or how stale the industry is becoming, especially when MS was looking to do something different and people just chose to look at what they could complain about. You should still question "why" decisions are made, but there was a lot of future thinking in those decisions, not just MS going "Hey let's screw people for no reason."

It's like people now having nothing real to complain about so they'll cry foul about their rights and make huge issues out of anything, it's disappointing to me that people get off more on negativity than hype and optimism (my opinion). Not saying I'm right but god it's tiring paying attention to this industry now.

Kujel s
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@Jed I second this whole post.

Michael Joseph
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"You should still question "why" decisions are made, but there was a lot of future thinking in those decisions, not just MS going "Hey let's screw people for no reason.""


I'm not sure how anyone can agree with your post. Obviously the only people "screwing with people for no reason" are psychopaths. I can NOT believe future customers are thinking that Microsoft is doing that. That's too irrational. They realize MS is a business trying to make as much money as possible. They're certainly NOT trying to create gaming utopia. Can we agree on that?

This is the beginning and the end of the problem.

Call it haggling or negotiation, but what the gaming community has done is assert power and if you don't agree with it, well.. too bad. I'll side with communities of customers over totalitarian companies (and I don't mean this as hyperbole, they are by definition top down run *organizations) any day.

* and that is why they should have strict antitrust laws enforced against them.

Michael Stevens
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Microsoft was definitely trying to assert that their competition was Steam/Apple and not Sony. In the last year they've increasingly pushed their digital content with large weekly sales, quicker discounts on GOD titles, the addition of F2P games, and notably higher quality arcade titles (like State of Decay), and now the free monthly games for gold members.

The discs are basically a concession to black friday and how console gamers are used to buying (something that burned Sony with the Psp Go). MS did an incredibly poor job of explaining to consumers how that could benefit them, so the message was "It's gonna be different, BECAUSE."

Stefan Park
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And we had reason to believe the digital games would be cheaper because....? Of how cheap their existing Xbox360 games are compared to retail? Nope.. most cases I can actually buy the game cheaper from the shop. Because of all the steam-like sales they have on these games? Nope... rarely have sales and when they do the prices are usually not much lower (there was one exception recently where they had their big $10 sale of games, and I picked up quite a few good deals). The problem is MS would have a virtual monopoly on the digital market. Valve do NOT have this, as I can buy my steam codes from all over the show. The publisher pricing strategies on Steam have also be questionable, especially in my country (New Zealand) where some games sell for $99US for no apparent reason when they are cheaper day one in the shop. Just look at when Steam came out. It's only the last 4 years or so it's really taken off. Before that I absolutely hated the model. But now look at Steam.. it has competition in the market. EA's Origin, Desura, GreenManGaming with Capsule (yes yes... 3 day check-in DRM, but if I'm buying a game for $2 this is something I can easily overlook).

Daniel Jimenez
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I don't quite understand how graphics, AAA titles, and how stale the industry is becoming is related to how Microsoft was looking to change distribution channels and sales. The outcry against Microsoft had nothing to do on whether the consoles games were becoming stale or boring or the graphics sucked. It was about adding dubious policies that didn't seem to benefit the consumer, only developers, publishers and themselves.

I actually don't find the industry tiring. If anything, its exciting to see such a response from people in what they feel so passionate about. Few are the mediums nowadays in which the outcry of people is actually heard and reacted upon. How many times have you heard of people complain about how the Facebook UI is changed? How many times has that actually deterred Facebook from changing their UI every year? (very few or none) How many times have you heard of people complain about the economic discrepancies in society today? How much has that really changed our economic status? (Not really at all).

It's great to see the industry change, and I'm all for change as long as the ultimate benefactor is the consumer. But that was Microsoft's problem, it didn't seem that this would be ultimately beneficial for consumers. And if it was, well they did a heck of a crappy job explaining it.

John Nitsolas
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So... Miscrosoft waved the stick at the consumer, while promising there MAY be a carrot down the road.
And *I* as a consumer have to simply roll over and be happy? No, thank you very much.

(Let alone the fact that since I live in Greece I do not know when I would've be, or will be, able to get an Xbox One)

And to quote an uber troll: "five years ago, games need to stop all coming out at $60. CEO John Riccitiello said companies need to explore cheaper games and flexible pricing. Did EA lead the charge? Did it fuck! Instead, it produced Origin, its own digital service where it could handle distribution and do away with physical production ... and still charges $60 per game. "

Ramin Shokrizade
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In my mid twenties I was a bit head strong. A very beautiful and powerful woman more than twice my age gave me what ended up being the best advice of my life:

"Don't make women come, let them come."

Now here I would replace the word "women" with "gamers" and give the same advice to Microsoft. We have the technology now with F2P to do this, without coercion, and give our customers exactly what they want, when they want it, and how they want it. Trying to make gamers come does not work.

Erin OConnor
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What the heck?
I can only give you 1 thumbs up?

But I have 2 thumbs!

Savio Sebastian
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Considering that you would have had the ability to SELL the games, what would have stopped someone from downloading a digital game to one console, taking it offline, and then selling the game on another console? I believe the 24 hour check was probably their way of ensuring someone didn't do this.

John Flush
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That would assume that individual never bought another game that took them online again - ever. I don't know how many people would have done this and when the console did connect once to play another game it would have 'fixed' itself.

I think they were over thinking / complicating it to solve a very small one-off.

Luke Quinn
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Exactly, John.
A company that decides to inconvenience the majority of their customers in order to prevent an un-noticeably tiny subset of people who would render their $700 (in Australia at least) console incapacitated just to temporarily hold on to some games that they've since gotten 10% of their purchase price back on is just disrespectfully greedy.
Even if someone does that, you've sold them an expensive console and made 90% of the purchase price on each of those games, so who cares? (assuming 'selling' digital games would be essentially signing away your license for a small fee)

Alex Boccia
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Microsoft was good to make this change. Customer confidence was dissolving right before their eyes, and the whole PRISM scandal, albeit not related to games, wasn't making the Xbox One look like any more compelling of a choice.

Simone Tanzi
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I think that microsoft had bad ideas and those were also badly executed.
The U-turn was absolutely needed.
Truth is, they could have done better. Anticipate the problems and release a well conceived console that offered a good service to the gamers.
What Microsoft presented at E3 was basically a console dystopia.
a console always online where you don't possess the games, just the right to play them until the support for the console is discontinued, where you can't sell or trade your used games if not with some byzantine procedure.
A Webcam and microphone inserted in the console which are always on and always online spying on your everyday life.
and to make things worse.
No justifications.
There has been no effort to make the things pleasing to the gamers, they just said "this is the future, deal with it" and flipped a middle finger to all the people who had problems with the new system.
Once you go as far as to say "if you don't have a connection buy an xbox360 and openly disregard complains you cannot do anything else but a complete U-turn that basically says you humbled down and asked for mercy. because at that point no minor fix would have bought back disgruntled gamers, and even now I'm sure many potential xbox one buyers will stay away from it fearing that they will find some features back in a future firmware upgrade.
and the issue with kinect remains, Kinect has clearly failed. to put it into the console and raise the price at 100$ more than the competition is still a pretty bad move.
Microsoft starts from a pretty bad spot, but thanks to this U-Turn it might avoid the complete disaster that was coming for them.
Also, microsoft did all that to gain support from the publishers. I do guess that given the situation all deals are now off. Microsoft need a pretty good move in the next month to recover from this disaster.
On the other hand I'm pretty happy that some publishers saw their dreams crash and burn because they come from a pretty twisted perspective.
Games sold on the first week from day 1 are clearly games that are unable to keep the player hooked for more than a week. It's not the customer fault, it's the developers duty to make games that keep you engaged for months.
The industry started to go for the graphical impact, gorgeous cutscenes and Quick time events. Things that are graphically spectacular but offers basically no engaging content.
Focus more money in the developement of engaging playable content and less on eyecandy.
Make sure your game has at least 40 hours of play and possibly a pretty high replay value. That's teh only true honest answer to used games. Make games people do not want to sell.

Luke Quinn
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I've always found it a little funny to hear developers complain about how used games kill their game sales in the release week because the game was some massively expensive, but short action game with no replay value.
I feel for them, and they absolutely should be able to turn a profit making those games because highly polished one-off adventures can be wonderful experiences, but if it doesn't sell it doesn't sell.
I'd like to make a 2D fighting game with a massive staff and asset budget, but no publisher would even let me in the door because even with 100 hours of replayability 2D fighting games just aren't viable. It sucks, but that's the nature of business.
Soon these big companies will grow weary of the massive risk that comes with AAA games and will instead make 10 times more A and AA games, leaving AAA as a niche dominated by a select few. I will miss the shiny GFX, but more games might mean more variety, so I can't wait. :)

John Maurer
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I wouldn't say 2D fighters aren't viable, but I think I understand what your trying to say

Simone Tanzi
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Actually, about 2d Fighting gae I think is just the opposite.
They are made for competitive 1 vs 1 games... that's basically infinite replay value.
I still challenge my friends at Garou: Mark of the wolves and that game is now more than 13 years old.
Same goes for Street fighter 3 TS or Super turbo.

Bob Johnson
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This all hardly matters to me.

I wish the internets would be much more vocal about lowering the price of the digital version of a game compared to the retail disc. IF MS wants no used games then just lower the price of the digital version $10-$20.

And to complement this MS could make a nextbox with no Blu Ray drive in it and lower the price $50.

Thank you and good day.

Will Currier
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Indeed, offering a digital version of the service a la Steam would probably shift people in the direction of where MS was wanting to go in the first place. That way, by the time the next generation is ready, more people will be "accustomed" to digital service and any similar requirements won't generate as much outcry. I know I buy 90% of my games through Steam now, it's convenient. If MS had that, I'd be all over it.

John Paduch
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Wow, you actually believe that they could just sell their digital copies for 10-20 dollars less at will? I guess you have no idea how this industry works, because they would have done that already if they could. The reason why they don't sell their digital copies for less over XBL is because the retail outlets (all over the world) would refuse to stock their games. Anyone who has a passing knowledge of retail in video games can tell you that.

This is also why Steam sales rarely happen for brand new games, and when they do it's a smaller discount and a short window of opportunity. No dev/pub can just go to Steam and start selling their brand new games for 10-20 dollars less than retail, either.

Yong Wu
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If MS really just wanted to shift towards a model like Steam I don't see how that isn't possible if you keep the discs and trading. The best way to convince someone to adapt a new system is make it convenient and of great value, if you cannot achieve that and have to force it down people's throat then your proposition wasn't any good.

Also I don't buy any of the thinking that the prices would go down if you cut the middle man, companies will still charge what they can get away with. If the market could bear a $60 game before they still can after going all digital so there is no reason to change it. Would it make customers much happier and be a positive move yes but will it happen? Most likely not.

Bob Johnson
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Except a $60 disc game isn't $60 because you can trade it in.

Darryl Simonds
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When Microsoft announced their plans for the Xbox One, I was unsure. Then when I RESEARCHED the information (which very few people do these days, as they expect to be GIVEN everything), I could see the future of (console) gaming - "...and it was pleasing to look upon."

And then the ----storm from the vocal minority hit. The press went wild. And now we have comments (from the "press") like this...

"At the end of the day, if you're upset about some of the features that Microsoft has removed from its Xbox One console, then you have every right to be upset -- but if you're directing anger at those people who complained about the console's DRM efforts, then you're aiming at the wrong group.

Microsoft had the final say in all of these decisions, and if the company has cut features which could potentially have been great for the industry, that's down to Microsoft, not players. To lay the blame on ourselves would be to let Microsoft off the hook, and then some."

Granted, it was a huge change all at once that Microsoft was attempting to make. Also granted, most people can not handle change (of any kind). HOWEVER, if it were not for the bad press (WHO DID NOT PERFORM DUE DILIGENCE IN RESEARCHING THE AVAILABLE INFORMATION) and the ignorant vocal minority these changes would not have been made.

For a "reporter" to state "don't blame me (or gamers) for my (their) actions, blame Microsoft" reeks of not only irresponsibility but of immaturity as well. The same goes for the vocal minority.

I am not a corporate lackey, nor am I an MS fanboi. I am simply someone who could see what Microsoft was attempting. And for the community to bitch & scream about what they were trying to do and then turn around and blame Microsoft for changing their stance to appease "the masses" (in reality, the vocal minority) is appalling to me.

John Maurer
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If I buy something, its mine, period. My car won't just stop turning over once the manufacturer discontinues the model. The DRM polices they had in place are what was truly appalling, I don't care where they wanted to go with it, and neither did the majority of gamers. It was blatent anti-consumerism, fueled by ego and a misplaced sense of superiority. This "180" as they are calling it isn't them trying to do the right thing, its damage control. Read more

Glenn Sturgeon
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IMO from what i've saw its simple the Xbone had a tight DRM because so many 360s were modded.
Alot of users didn't care as much about the online play and they wanted free 360 games.
At least 1/3 of every 360 i've ever seen listed on CL was modded and came with 100s of gigs of games.
I remember a guy used to post here a gamasutra who owned an anti piracy CO in ireland, i think it was.
By the torrent stats he showed 360 games were pretty outragious. The most memerable was Alan wake, in its 1st month on the market there were more copies torrented than sold retail.
There were other well known titles publisised for being posted to the torrents even before launch. I remember GOW 2, one of the halo titles (idk which one) this happened to and it seems the newest GOW was leaked about a month before its launch date. So imo if you thought MS had inovation of titles and lower prices in mind, unless you're holding back do to a NDA then i can't imagine why you'd think the mesures were for anything beyond curbing piracy. It was not about pushing the medium further, its about money.

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I lament the dropping of the always online requirement. There were developers and games already integrating cloud support as an integral part of the game. Now that there is a chance people won't be connected and unable to access it, it probably won't be used for anything worth mentioning in games that start development post this change.

Plus, I think always online is the future. In many ways it's the present. I can't help but feel this is like if someone said, "CDs can get scratched" so we completely abandon the concept of optical disks in favor of rocking 32 meg SNES/Genesis cartridges for the rest of time. Or someone in the 1900s saying they don't have electricity so companies treat it like a fad and abandon the idea of making devices that require it.

Kyle Jansen
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I highly doubt this will affect "cloud support" any. First, because outside MMOs, there's not much point to using cloud computing. For straight-up singleplayer games, it's completely pointless; in traditional multiplayer it's no different from the current hosted servers, leaderboards or clan-management system, just using Microsoft's Azure instead of "whatever the developer wants".

Second, let's say someone does develop a game that absolutely needs cloud computing to work. They can do that, and force the game to be played online. After all, most multiplayer games on the 360 already do this, at least for the online multiplayer modes. Nobody complains that online games require an internet connection (there's some grumbling when offline LAN support is dropped, but not much on consoles). So if someone has a genuine case for using cloud computing to make for a better game, they'll have no problem doing so.

John Paduch
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Perhaps it is indeed the future, but we're not in the future, we're in a situation where the US and Canada have a comparatively crap situation for wide-spread broadband quality, reliability, and even access to begin with.

If you were limiting this line of thinking to South Korea and parts of Europe, then you'd have a valid argument, but you can't do that in a global consumer base.

Jonathan Murphy
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What worries me is the DRM remains in the console, waiting to be turned on years later. Still I'm hopeful that their competition will force MS to stay on track, or bury them 10 feet under.

Chris Oates
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It is not hard at all to see how all of these features were tied to and made much easier by the 24 hour checkin.
* game sharing
Under the mentioned Sony system, you had to log in to your friend's console as yourself first. This means either being physically present or giving your password to your friend. With an automatic checkin, all you have to do it put the game on your share list (I assume there would have been a list and not a blanket on/off) and everyone in your group can download it at that point, no cumbersome login/logout/login process. The checkin verifies that the game is still being shared, and (presumably) an at-launch check verifies that no one else is playing the game.
* You acknowledge that this is tied to the check, but then ask why they couldn't have implemented an entirely different system. Because when you look at all the features of the system in aggregate, a checkin enables them all, and is less invasive for the always connected console than any other method that I have seen mentioned.
* Digital trades: "We can stop mourning the death of digital trade-ins as well. Why exactly would we want a resale system that was tightly controlled by publishers, in favor of the simple act of selling your own property however you choose, as we've been accustomed to for generations, and as is our legal right?" -- because everything is going digital (music, books, games) and at present there is no system in place for being able to sell/trade/give purely digital content. This would have been an entirely new feature, so why can't I mourn the loss of something entirely new? If the status quo is everything going digital and _no_ option to sell/trade/give content, there is definitely a loss.
All in all, I hope that some of these features will come back in some other form. Perhaps an opt-in daily check to enable sharing or the like. Microsoft had to act quickly, and taking the time to formulate, implement and test an alternative system before announcing would only have damaged the brand further (even assuming it is possible to do a full implementation before launch) It was clearly much easier technically (and a simpler message PR-wise) to just scrap the whole thing and do it as it has been done, and make the announcement now.

Jon Pope
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Quick correction here:

While Sony did allow you to "share" your game on 2 different PS3 consoles, it wasn't intended as a way for two different users to be playing the game at the same time. In fact, it won't let you, and it's a violation of their TOS:

It's hard for me to imagine a flexible game sharing that MS imagined for the Xbox without some sort of online check. Let's see what Steam does.

Christian Nutt
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I find it impossible to believe that MS was going to blithely let 10 people split the cost of one retail game. Does anybody honestly believe this?

Bob Johnson
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No. MS wasn't going to let 10 people split the cost of a game. The family sharing plan was a time demo sharing plan. IF a friend shares his shared library with you then you could only play each game for 45 minutes.

Chris Oates
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while bad if it were true, let's not treat an anonymous pastebin post as fact until verified.

Christian Nutt
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The pastebin post is a red herring. Simple logic dictates that there was no plan to let people split games 10 ways with no restrictions. But now MS gets to say "it's your own fault!" without ever having to release the details of the friends & family plan's inner workings.

Bob Johnson
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Ok it could be bs post but like Christian said they were never going to let you share your games completely unfettered with 10 others. Very disingenuous of MS not to explain that in the first place while leaving it out there like it as if you were going to get all these games for nothing.

Btw, my take on the sharing thing is part of it was really about transferring bandwidth costs to the consumer. I mean I wouldnt put it past MS to set it up so you download your friends game directly from your friend not from MS servers. ;)

Bob Johnson
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Here is a good take on the reversal.

Nooh Ha
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What I find most odd about this comment thread and most others on this subject on this site is the almost complete absence of views from console developers nor any material attempy by Gamasutra ("the art and business of making games") to represent their side of this argument. I would genuinely love to hear their views on this.

The ones I know well believe that piracy and 2nd hand sales have serisouly undermined their businesses and these combined with the fundamentally broken royalty advance funding model has left them searching for any method of either increasing unit sales or increasing revenues per player.

Jorge Ramos
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The problem was that Microsoft was trying to make its own Steam-like box/"service", charging money to have access to it (Gold Membership) and failing to recognize one of the key reasons that Steam is so successful: PRICE.

Even now, while every single game that is being released on 3DS for retail is being released digitally as well, Nintendo is refusing to cut any breaks for those that would otherwise consider getting the game via download. You're still paying $40(+tax) for the same game whether you get the physical cart or you download it yourself. Nintendo has yet to drop the prices on ANY download items, and you also effectively forfeit the right to return (for refund) if you really don't like the game, or at least give it to someone else to at least get SOME of your money back for the soured experience. At least these ARE rights that you have when you have a physical copy.

With the Xbox 360 and PS3 now, both companies are still charging full price for any and all DLC, and any pure download-only games. They are also still very slow (if ever) in dropping the price for a download version of a game that could be had in retail.

The PSP Go saw failures on a similar nature, and it still boggles me that the bean counters still fail to realize why it is that Steam works while their models don't.

First and foremost, if you're going to offer games on download, they need to be findable through the life of the system. The PSP Go failed on this miserably because many of the high profile, marquis and even surprise/sleeper hits for the PSP that were available on UMD were not available for download (officially). And even with the market as it is now, lesser known games end up getting artificially limited runs, assuring that anyone willing to resell their copies get to practically name their price. Bust A Groove 1 for PS1 can run you as much as $70 for just its product *box*, much less a working disc, on eBay. More recently I have had the devil's own time searching for years to find a copy of Rhythm Thief for 3DS because it was a limited production, and Nintendo wouldn't offer it for download either (granted it was published by Sega, but that's beside the point for this discussion). I managed to pick up a copy of Beautiful Katamari on 360 for $10... apparently just in time, because a week later I saw it selling on eBay for $50 and rising. If a download-only console is going to work, it needs to have ALL the games readily available, without the influence of advertising... and each game must be able to be searchable. I can tell you from first hand experience that there were many surprise additions to my Steam Library I found even when I wasn't actively thinking about it.

Secondly, the market has already shown that there is value in a physical copy that allows us to trade, lend, or even resell. If you take that away from us, the majority are not going to pay as much as a full copy. Case in point would be the very thing going on with the Nintendo 3DS now. Why on earth would I pay $40USD(+tax) for a download copy of a game that I might later want to trade or resell to someone else... a game I can't even lend to a friend if I wanted to because it's tied to my system, when the cartridge itself enables me these freedoms? It certainly doesn't cost the console manufacturers nearly as much to put a game out on download as it does to print it to a disc or cartridge. If they want us to accept digital downloads as the future, then they need to price their download versions accordingly.

Thirdly, it should go without saying that there needs to be some discounting on DLC and download-only titles. The fact that many of even the very first download-only games available on either console or handheld store are still being priced at their original MSRP is a complete failing, especially when compared to the one thing many Steam users appreciate about the service: daily/weekly/seasonal sales. As I mentioned earlier, I managed to stumble across picking up Beautiful Katamari on x360 for a bargain... but in order to 100% the game, I need to get its associated add-on DLC. Now, I get the game is rare at this point, but even such an old game is still getting its DLC priced at its original MSRP, and that's ridiculous. Microsoft, Namco, I think you've both exhausted the number of people that (a) have this game still, and (b) are willing to pay MSRP for the DLC in question. This is why many choose to wait for high profile titles to get their "Game of the Year"/Collector's edition re-releases, because those usually pack in the DLC that many of us have come to expect they'd release. I myself would love to pick up X-Men arcade for the PS3 as an example, but the fact that they still charge $10 for the privilege after all this time is ridiculous.

Even VALVe's steam division have gone on record - with the figures to back it up - to say that they actually see INCREASED profits when they are able to discount a game heavily, because then there are that many more people buying; and if the game is good, word of mouth will be your free publicity right there. if either want to make this download-only model work, they need to step it up and actually LISTEN.

Kyle Jansen
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There's another logical solution that seems to be overlooked - why do digital and physical games require the same DRM scheme?

People tend to treat physical games as physical property, able to be resold, carried around, given away, etc. but not copied. In this case, the disc itself can serve as the "proof of purchase", as it does in current systems. Online loaning is unnecessary because you loan someone the game by giving them the disc, not by granting them a sublicense or whatnot.

Digital games tend to be treated differently. Relatively few people complain that they cannot resell Steam games, or that they have to be online (since, after all, if their connection was good enough to download a multi-gigabyte game, they have little trouble keeping a constant connection). The Xb1's proposed system would actually be more fair, in ways, than Steam, by allowing "loaned" games (although the lack of a long-term offline mode makes it about even IMO).

Why did they not take the obvious solution of "disc-based games will act like disc-based games always did, digital games will act like digital games are expected to"?

satish rawat
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I think its paid blogging for microsoft. seriously do u think anybody would by X1 with so many restriction, and so complex rules for just playing a simple game. ahh, and I don't think its even worth of buying such a costly item, lesser number of title, a tv which will only work in US & UK, the Games which are never at discount after years has passed, a kinect which had become accessories. so much so for X1. only foool would have brought it.

Walter T. Junior
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Letīs think for a while: All these problems about DRM and protection can be solved in a simple way - Put your disks to sell cheaper and you donīt need DRMs, because not worth it to copy. Instead of spending fortunes controlling DRMs, you can simply forego the profit that you would spend to protect your product.
I believe that Microsoft is right.