The Future of Secondhand Games

Xbox One

When I wrote of my general impressions of the Xbox One last week, I pointed out that Microsoft’s rumored strategy of required access codes could potentially spell doom for used, rented and borrowed games. Initially, Microsoft representatives in numerous interviews released vague statements that often conflicted. What I had gathered from the presentation and subsequent interviews that day was that to make a game work on any given Xbox One system/account, the account needed to be properly registered to be given full access to any given title. This appeared to be mostly true with Microsoft Corporate VP Phil Harrison confirming the existence of digital permissions being required to operate Xbox One software.

“So, think about how you use a disc that you own of an Xbox 360 game. If I buy the disc from a store, I use that disc in my machine, I can give that disc to my son and he can play it on his 360 in his room. We both can’t play at the same time, but the disc is the key to playing. I can go round to your house and give you that disc and you can play on that game as well.

What we’re doing with the digital permissions that we have for Xbox One is no different to that. If I am playing on that disc, which is installed to the hard drive on my Xbox One, everybody in my household who has permission to use my Xbox One can use that piece of content. [So] I can give that piece of content to my son and he can play it on the same system. […]

I can come to your house and I can put the disc into your machine and I can sign in as me and we can play the game. The bits are on your hard drive. At the end of the play session, when I take my disc home—or even if I leave it with you—if you want to continue to play that game [on your profile] then you have to pay for it. The bits are already on your hard drive, so it’s just a question of going to our [online] store and buying the game, and then it’s instantly available to play.

The bits that are on the disc, I can give to anybody else, but if we both want to play it at the same time, we both have to own it. That’s no different to how discs operate today.”

Cartridge Art

However, Harrison’s analogy of comparing digital permissions to the limitations of a physical disc seem like a stretch. Yes, there is truth in saying that two users on two separate systems can not operate a single disc’s software on the simple fact that a physical disc can’t be in two systems simultaneously. Drawing a parallel between the physical boundaries and limiting software with digital permissions is similar in that regard. But the point that many are griping about regarding this strategy is that to a consumer, ownership begins and ends with the tangible nature of a physical disc. If I were to purchase a movie, I can essentially do whatever I want with it; watch it at home, at my family’s house, at my friend’s apartment, loan it to my brother and no money has to change hands to sign it away. Games in this generation work like this as well, my brother and I are constantly trading games with each other, not only is it economical, it allows us to experience games that we might not play without the other being into it.

From a business standpoint I can see what Microsoft is attempting to do with this angle. They are trying to take Valve’s Steam business model and put it in a brick and mortar store. Valve has been able to amass a fortune selling games through their Steam platform. But again, Steam’s digital distribution model is something that is successful because Valve understand how to adapt. They know that they are not selling a physical copy of a game. There is no box, there is no disc. Just a bunch of gigabytes streaming over the internet.

Steam Sale

Because of this lack of tangibility, Valve needs to price their titles accordingly. Through Valve it is rare to purchase a game for $60 new, with many pre-orders getting discounted before launch. Not to mention Steam’s onslaught of sales that occur and evolve by the day. Valve makes it easy and simple to purchase games, and because the price is often so miniscule, gamers don’t mind at all. Ironically, Steam users don’t even own the games that they purchase, they own the rights to play these games. It is essentially an elaborate form of a rental. If Valve were to decide to drop support for a particular title, the could do so leaving users unable to access their discontinued purchase.

As much as Microsoft wants to mimic Valve’s business model regarding who has the rights to software, I fear that they won’t even have the foresight to understand how to competitively price these digital permissions. They can’t even set prices correctly on the Xbox Live Marketplace. I laughed yesterday morning when I checked their weekly sale. NBA 2K13, a title that I’ve honestly been waiting for a solid price drop on was marked at 50% off. So I bit, I took a look at the offer. Microsoft’s price for a digital download of 2K13 was $29.99, which means that it was 50% off of a $59.99 title, the MSRP for the game when it was new. Just doing a quick Amazon search for the game would net me a new, physical copy for $35. No one week sale required.

Xbox Dashboard

The more I think about this strategy the more blatantly obvious of a cash grab it is. Locking digital permissions and charging for additional access is a cold practice that provides no benefit for the consumer. For Microsoft to put a fancy dress on it and say that they are evolving with the times just says to me how desperate they are to turn a buck. I don’t care how it is done, but Microsoft needs to re-think how this access is managed. I, like most other consumers, believe that if I am paying for something, be it a physical disc or digital permissions, I should be able to say what I do with that permission. Trading and sharing games is a long fundamental form of socializing for gamers. If they want to be like Valve, then they should go all in on digital delivery. But selling us a disc and telling us what we can’t do with it (short of illegally pirating it) is absurd.

Inside Gaming Daily – Microsoft Clarifies Borrowed Games on Xbox One, Mysterious on Used

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