1 Million Xbox 360s to be Banned

[Silent_Buddha]

What is the advantage of going DD only? Surely it is better to have both? Any additional cost of a drive is likely offset by the need for a much larger HDD and larger margins for retailers. It will also reduce thier potential customer base. So what are the benefits?

If they want to reduce piracy why not just use similar protection to PS3, its proven pretty robust. If 360 had encrypted firmware on its DVD drive like the PS3 it wouldnt be in the position it is now. In fact the only form of piracy on the PS3 so far has come from DD games. Steam games are also pirated, DD does not mean no piracy in fact it has the potential to make it worse.

Steam games also often don't require online validation of not only the serial code but the files installed on the HD everytime you run the game. Having a DD only system would allow a manufacturer to mandate an always online policy for the console, which would allow for online validation everytime a piece of code was run.

As to PS3 it may or may not be hackable, that's debatable. It may just be a simple thing that X360 has been easy enough to hack and PS3 hard enough that efforts to hack PS3 have been half-hearted at best. Compound that with the fact both platforms share many titles, and up until recently X360 was significantly cheaper than PS3.

In some ways similar to how MS's latest DRM scheme's for WMV hasn't been cracked in almost 2-3 years now? Not because it's impossible, but because noone wants to put in the effort to do it. It's basically "hard enough" that many have speculated on ways to do it, but haven't put the time in to do it. And it also helped that since most online stores don't enforce using the new scheme's people can still get away with running XP in a VM and use older hackable versions.

Either way, there's still significant downsides to a DD only console "right now." But by 2014/15? The landscape may or may not be drastically changed by then.

Regards,
SB

 

[Acert93]

Wikipedia has numbers for just the US, as opposed to worldwide.

Even if we limit the scope to US only GameStop (4,377 GS-US outlets) doesn't have more US outlets than Walmart, Best Buy, and Target combined (7,046 combined US outlets = 1,045 BB-US + 1,743 Target-US + 4,258 Walmart-US). Which doesn't really matter because that wasn't his initial parameter anyhow.

I am not diminishing GS, only the hyperbole and pointing out that GameStop--that is a huge outlet--also makes a LOT of money by cutting out publishers/publisher profits. The arguement that GS is huge actually works against GS: if they are so big, the effects of their used-sales program is even more damaging.

 

[Acert93]

The fact that publishers continue to deal with gamestop despite all the bitching and complaining about used game sales says a lot about how much power gamestop has over them. They could just not sell games to gamestop anymore.... but of course that's not going to happen.

The continue with GameStop because traditionally brick-and-mortar have been the only means to reach consumers. In the last decade we have seen an increase in online sales and in the last couple of years we have finally seen successful DD models (e.g. Steam, Direct2Drive, etc).

Btw, no one is suggesting NOT selling consoles through GameStop. That was the "counter arguement" against DD--that GameStop would not carry a DD console/peripherals/game cards/etc.

Why not assume: MS/Sony/Nintendo ship a $299 retail console with $30 markup for retailers + traditional peripheral markup (~50%) and a shift toward Point-Cards. Further USB-thumbdrive based Kiosks for game downloads for non-online users.

Counter-Assumption: GameStop, while not happy with being cut out of their niche market (used game saled) and seeing a diminished role of B&M (inevitable btw), chooses to evolve--and more importantly NOT "give up" and give the Walmarts of the world all these sales & profits. GS still makes a profit, has to utilize less floor space, fewer issues with tangible goods theft, and can always steer customers to more profitable products/inventory (they already do this).

I doubt a DD console maker cuts out GameStop. It is only the assumption GameStop won't service such a device. Watch GameStop lose marketshare if they don't carry the next big console--hard to be a true gaming presence if they cut out a big console.

Oh and I guess I was mistaken about total stores that walmart operates. I was just going by NA numbers, and although the totals are close, collectively walmart best buy and target do operate more stores than gamestop.

60% is close for horse shoes and hand grenades :smile:

 

[ShadowRunner]

Steam games also often don't require online validation of not only the serial code but the files installed on the HD everytime you run the game. Having a DD only system would allow a manufacturer to mandate an always online policy for the console, which would allow for online validation everytime a piece of code was run.

As to PS3 it may or may not be hackable, that's debatable. It may just be a simple thing that X360 has been easy enough to hack and PS3 hard enough that efforts to hack PS3 have been half-hearted at best. Compound that with the fact both platforms share many titles, and up until recently X360 was significantly cheaper than PS3.

In some ways similar to how MS's latest DRM scheme's for WMV hasn't been cracked in almost 2-3 years now? Not because it's impossible, but because noone wants to put in the effort to do it. It's basically "hard enough" that many have speculated on ways to do it, but haven't put the time in to do it. And it also helped that since most online stores don't enforce using the new scheme's people can still get away with running XP in a VM and use older hackable versions.

Either way, there's still significant downsides to a DD only console "right now." But by 2014/15? The landscape may or may not be drastically changed by then.

Regards,
SB

You could still use an online authentication system with disk based media, its not an advantage specific to DD only.

The system with a optical drive also has the option of DD. I just cant see the benefits to a DD only system, is having a slightly smaller form factor worth the reduction in potential buyers? Smaller form factor is the only true benefit of a DD only system.

Some would say reliability is a concern, but even if the optical drive did malfunction you are still left with a system that has all the same capabilities of a DD only box. If noise levels is a concern you have the option of installing from optical to HDD or using the DD function.

The only area i see DD only making sense for the forseeable future is in the portable market, where small form factor is important enough to outweigh the negatives.

 

[Silent_Buddha]

You could still use an online authentication system with disk based media, its not an advantage specific to DD only.

The system with a optical drive also has the option of DD. I just cant see the benefits to a DD only system, is having a slightly smaller form factor worth the reduction in potential buyers? Smaller form factor is the only true benefit of a DD only system.

Some would say reliability is a concern, but even if the optical drive did malfunction you are still left with a system that has all the same capabilities of a DD only box. If noise levels is a concern you have the option of installing from optical to HDD or using the DD function.

The only area i see DD only making sense for the forseeable future is in the portable market, where small form factor is important enough to outweigh the negatives.

Slightly smaller form factor. Slightly lower power consumption. Slightly less heat. Slightly less costs. Lower sound pollution, you just need a fan for cooling and with less heat added by a fast spinning physical drive your exhaust system doesn't have to be as robust. And that's just for the console manufacturer. Things add up.

The most important thing would be when it comes to games publishing. Where no pub/dev wants to raise the price of games, yet they are being squeezed by increasing dev costs, duplication costs, packaging costs, shipping costs, etc. as inflation inevitably makes things more expensive.

Cutting that all out might not make the games cheaper, but it will allow pubs the choice to either [A] lower the price or maintain the current price of games, rather than the choice of go out of business or raise prices of games.

Going with physical media it's inevitable that games will HAVE to go up in price. Something that your average gamer is very adverse to.

As said, "right now" DD isn't very feasible. The cons currently far outweigh the potential benefits. But in 3-5 years? With rising costs for physical media and inceased penetration of broadband (theoretically)? DD gets more and more attractive when compared to physical media.

Hell I'm sure one or all companies would also use the "green" line of advertising by claiming they are going "green" but reducing the amount of waste products produced.

Regards,
SB

 

[Xpuntar]

There is very long, long way before DD will prevail over physical media.

Not everywhere you can get 10Mb connection at minimum (I have 2Mb ADSL and no option to upgrade to VDSL or optical. Maybe in next 10 years).

There are just too many working people, who just do not have money for basic living expenses!

There is very big population of those in eastern part of EU. Even in my country around 30% of entire workforce, get less than even minimal wage.

"Piracy" for those people is just a way of living.

PS3 suffers just and only because of this. "No hack = no money"

If PS3 would be "cracked&hacked", Sony would already won this generation.

 

[Acert93]

If PS3 would be "cracked&hacked", Sony would already won this generation.

Interesting perspective from EE, thanks for sharing :smile:

But this isn't true in the US as not being cracked wasn't what prevented the PS3 from taking hold faster against the Wii and 360.

 

[patsu]

Yeah... Xpuntar might want to define what "winning" means in that case. ^_^

 

[Shifty Geezer]

PS3 suffers just and only because of this. "No hack = no money"

If PS3 would be "cracked&hacked", Sony would already won this generation.

Sony would have lost even more money, selling more lossy hardware and recouperating less sales. Not a clever move!

 

[specwarGP2]

Why not assume: MS/Sony/Nintendo ship a $299 retail console with $30 markup for retailers + traditional peripheral markup (~50%) and a shift toward Point-Cards. Further USB-thumbdrive based Kiosks for game downloads for non-online users.

That's not my assumption. My assumption is that out of the 3, only MS is likely to ship a DD only console next generation. If GS supports that DD only console, and helps it to become the dominant platform of the generation, then it will be hastening its own demise. My feeling is that GS will act in its best interest to preserve it's used game business and elect not to sell the DD only console.

I can see gamestop carrying the DD only console IF the built in margin was big enough, but that would just just make it more costly for the console mfgr, in which case it might be more cost effective to just ship it on an optical drive.

I have no doubt that a DD only console can work, it's just that all the console mfgrs have to be on board at the same time. Otherwise you'll end up with retailers (Gamestop) picking favorites to further its own interests.

 

[Acert93]

Ok, so GameStop plays hardball is the assumption. This could backfire on GS and hasten the transition to DD.

1. DD is coming. 2012. 2017. Whenever. It is coming. GS is on the clock to figure out to survive.

2. So lets look at a scenario: MS releases in 2012 a DD system ahead of Sony (2013, BDR based).

a. Current Stats and Assumptions: 70% of 360 gamers are online. >70% early adopters are online. This will increase between 2009 and 2012.

b. MS designs a DD system with a large HDD and no Optical Drive. The console is smaller, uses less power, is quieter, more reliable, and cheaper than an Optical Drive counterpart would be.

c. MS's DD games have DD costs but also cut out packaging and delivery ($5-$10) as well as the Retailer Share ($10-$25). Game Sales are tied in live directly from demos and trailers (impulse access). DD games cannot be resold ala GameStop which cuts into Publisher profits (i.e. GameStop sells 2 games, but publisher sees 1 sale as GS recoups the 2nd sale's 'publisher' portion). Piracy is also diminished.

d. Due to this cost advantage DD titles are either cheaper than retail options (vs. later optical versions on other consoles) and/or have extra content. Publishers do this because they are making more money and want to push the DD format.

e. So GameStop decides NOT to carry this DD console. (Your assumption)

f. Walmart, Target, BB, Frys, Costco, Fred Meyers are supply limited and sell every unit.
=> GameStop just lost console sales, mindshare, peripheral sales, etc and has a poor 2012 sales season.

g. (Hypothetical Worst Case) 2013 non-DD consoles launch. Publishers are really happy with DD margins. Early adopters and very active online users (who buy a ton of stuff) have all flocked to the DD console in droves. Publishers are (1) seeing optical sales be undercut by GS used sales and (2) extra retail cuts, shipping, etc. So Pubs increase Optical Format costs to $70 compared to $50 for DD versions--and still make more money on the DD version.

Does GameStop really want to engage (f) which is very likely and put themselves in a position for (g)? Maybe pubs don't do a price war--but the door would be open to penalize GS for hurting profits. The tech is already out NOT to allow resale. If a DD system launches that allows Optical Consoles to ship this technology which does the same thing to GS.

The waters are being tested right now with XBL and PSN direct sales. If MS/Sony/Nin think consumers are ready to accept not selling games they will pounce on it. What, is GS not going to sell games they cannot resell used?

Short term I think GS's used game sales is already being addressed slowly; long term I think they are dead in the water because DD will come. GameStop isn't in a position to bully anyone--especially if it is publishers, not MS/Sony/Nin, pushing to prevent used sales.

 

[Acert93]

I have no doubt that a DD only console can work, it's just that all the console mfgrs have to be on board at the same time. Otherwise you'll end up with retailers (Gamestop) picking favorites to further its own interests.

They could play favorites, and may try. But I think the issue isn't the console manufacturers but the publishers who will decide how far this goes. If a console vendor offers a console that diminishes piracy, cuts used game sales, allows less inventory and shipping issues, cuts out a portion of middle men cuts, and ties them closer to future sales (DLC, sequals, etc) I think Publishers will strongly consider putting this into their favor.

Publisher support consoles they think they can make the most money.

GameStop is out to make money and is dependent on console makers and game makers providing them goods. If they say, "This is what we have for you" GameStop isn't in a position to say no unless they want to lose huge marketshare.

 

[-tkf-]

Sony would have lost even more money, selling more lossy hardware and recouperating less sales. Not a clever move!

The idea is that if you have hardware, that gives the user a way to get extremely cheap software, the number of machines, with avid gamers, will be larger. And this large number of owners will still buy the occasional game, and often they will buy very "hot" titles so that they can play them in a secure knowledge that it wont get them "banned.

Examples, the C64 and Amiga had free games for all that wanted them, and there were still sales.

PC is a somewhat ok example as well, online games that check the CD-KEY sells very well. Offline games will often run into trouble espcially when the are leaked/cracked before streetdate.

A sideeffect of having the console with "free" games, is that it becomes the choice of console, because everyone has it, and the games are easy to get ahold of.

The sheer number of consoles that are banned from this shows one thing, the 360 is really the choice for those that doesn´t want to pay for games. And Microsoft did a very poor job in protecting the investment from developers, unless it was planned all along.

 

[specwarGP2]

They could play favorites, and may try. But I think the issue isn't the console manufacturers but the publishers who will decide how far this goes. If a console vendor offers a console that diminishes piracy, cuts used game sales, allows less inventory and shipping issues, cuts out a portion of middle men cuts, and ties them closer to future sales (DLC, sequals, etc) I think Publishers will strongly consider putting this into their favor.

Publisher support consoles they think they can make the most money.

GameStop is out to make money and is dependent on console makers and game makers providing them goods. If they say, "This is what we have for you" GameStop isn't in a position to say no unless they want to lose huge marketshare.

Chicken and egg argument all over again. If gamestop doesnt sell your hardware and games then you're screwed. Publishers right now can tell GS "this is what we have for you," but they don't and gamestop keeps screwing them over. Why would that change next gen??

I think gamestop has big enough retail presence that it can really influence who the dominant console is. If with gamestop's backing PS4 achieves PS2 like dominance then publishers will have no choice but to follow the money there.

 

[Acert93]

Chicken and egg argument all over again. If gamestop doesnt sell your hardware and games then you're screwed.

No, you are not for the very reasons I gave: GameStop is NOT as big as you say. The 360 already has a 70% online rate which is growing (was just above 50% a couple years ago). Online adoption is improving and will continue to do so into 2012+. Early adopters even have a higher percentage of online access. If we see a year-ahead release again a company, any company, who chooses NOT to carry the platform is the loser.

Your entire premise is a console needs GameStop to sell it. I don't agree--and it isn't chicken or egg. Publishers don't need GameStop--it may be desirable. But it may not be, too. Indeed, if EA, Activision, etc bean counters determine they can make more money by NOT passively agreeing to GS and their used-sales-antics then it becomes GameStops call.

I think gamestop has big enough retail presence that it can really influence who the dominant console is. If with gamestop's backing PS4 achieves PS2 like dominance then publishers will have no choice but to follow the money there.

I don't think GameStop was the force behind the Wii. A majority of Wii owners probably never even frequent a GameStop. If big retail outlets like Walmart and Target and Best Buy were the only stores offering Wiis I seriously doubt it would have resulted in the consoles demise.

And I don't deny GameStop couldn't, or wouldn't, use their weight where possible. But publishers would have the ability to do the same thing--while still making more money than utilizing GameStop.

And that is what it is about. What method means most profits? GameStop really does cut into real profits (something that could not be said of piracy in a direct way).

How bad to publishers want that money?

 

[AzBat]

All the while yall talking about DD & Gamestop this little tidbit came up yesterday....

US specialist retail giant GameStop has revealed that it is to launch a digital distribution service to allow gamers to download add-ons for products, with testing set to begin early next year.

http://www.gamesindustry.biz/articles/gamestop-to-enter-digital-distribution-market

Also, somebody figured out how to unban the systems, check out that OTHER forum.

Tommy McClain

 

[obonicus]

It might be interesting to extrapolate Brad Wardell's opinion/data regarding DD vs. retail on PC:

Shack: How much of the PC audience do you think is that guy who doesn't play a lot of games very often, but who walks into Walmart, looks at the back of a box, and walks out with a game once a month?

Brad Wardell: It's a lot. A lot of people keep predicting digital distribution is going to kill off retail, and that's not going to happen any time soon. Retail sales are still gigantic. Demigod has sold more copies at Walmart than anywhere else. Even though it's on Impulse--right now we have a sale this week, you can get Demigod for $20. But I guarantee you that Walmart sold more copies this week than we did, even though we sold thousands and thousands of copies this week.

I don't think we'll be seeing DD-only for a very long time because it'd just be leaving money on the table. I don't think piracy is enough of a reason to go that way; 360 software sells very solidly regardless, as did PS2 software. If some console ended up like the PSP, piracy-wise maybe we'd see a greater reaction.

 

[specwarGP2]

And that is what it is about. What method means most profits? GameStop really does cut into real profits (something that could not be said of piracy in a direct way).

How bad to publishers want that money?

Bad enough that they'll deal with gamestop's shenanigans. They could easily ice gamestop out and sell their games only at walmart bestbuy and target. But they dont, despite the fact that dealing with gamestop actually hurts them. Publishers need gamestop to sell their games at the retail level.

Why would the situation be any different when it comes to selling console hardware? Without gamestop's retail presence to move those units the sales would most likely be dismal. If GS decides to carry one console and not the other, then the one not sold by GS is at a severe disadvantage.

Like I said before... if all the console mfgrs were going dd at the same time, then gs would be forced to play ball.

 

[Teasy]

They dont exactly brick the consoles, they just cant connect to Live.

Anyway, this is the only real recourse they have to stop piracy. It's basically operating on the same principle why WoW makes millions while most PC games are heavily pirated.

Not the same principle really, that would be blocking those games that have been illegally downloaded from playing online. Blocking all games from any user who has modified their console to allow copied games is called the "pointless bad PR" principle

 

[JardeL]

Someone posted a way to "unban" your banned console on Xbox-Scene forums. Interesting.