Business Approach Comparison Sony PS4 and Microsoft Xbox

[AzBat]

With regard to the paywall on XB1, had things gone better with their launch & they were in the lead in the US like they were with the 360 then I don't think we would be having this conservation. True the value proposition is not as good as compared to PS4, but MS was banking on Gold being a bigger draw for the early adopters. However, like Shifty mentioned: people are buying other things. So before the paywall wasn't a big deal to most users, but now Microsoft are having to go on the defensive & having to explain why they should have to pay more when other systems don't. I think from comments I've seen from Phil Spencer I think they are rethinking the paywall. I think it will be a nice gesture, but in the grand scheme I don't think it will help much. It will just be another negative they can cross off the list. Like Rancid said the price is the biggest issue. But I think along with price they need to show games you can't get anywhere else since the speed & res will always be an issue . Being the cheaper guy doesn't always make you the winner(goes for PS4 or XB1). Instead it's games & without great games XB1 is dead in the water.

Personally I understand why this forum has such a big problem about the paywall. Me? not so much since I'm paying for Gold regardless. So I'm getting all the other apps & services for free. If you're not into multiplayer gaming then I can understand the reluctance, but you have to understand these new machines are not going to be bought specifically for media services. Gamers are the first people looking at these & right now if you're a gamer looking to buy a new core console you have 2 choices & both make you pay a subscription fee to play online. If you're not going online then yeah, PS4 has better value, but I think you're going to see that kind of user eventually go away. Every core console buyer will _eventually_ be a subscriber. Then it doesn't matter if there is a paywall or not.

I think if you want a good comparison look at the phones where you needed a data plan to use the Internet. This was before WiFi was included in the phones. You couldn't use any Internet apps without paying the cell provider a data plan. That went away & think it will go away for XB1 too. Thank God for competition!

Tommy McClain

 

[AzBat]

On the other hand it would be extremely easy for them to fix this problem, copy Sony's offering. Unless their stats shows them something we don't know, i would guess they aren't making a lot of money on subscribers that doesn't play online.....

But MS are making money. It might not be much, but it's more than Sony since they are giving away those services for free. I think there's a good business approach discussion in that.

Tommy McClain

 

[wco81]

They need to get Halo and Gears of War to market ASAP.

 

[AzBat]

They need to get Halo and Gears of War to market ASAP.

True, but I don't think it's going to be enough. Had Epic & Bungie been doing the games then it might have helped. MS should have paid for exclusivity on Destiny. Hopefully they are getting an exclusive on Red Dead.

Tommy McClain

 

[Deleted member 86764]

They need to get Halo and Gears of War to market ASAP.

Is that enough though? If I remember correctly both games' sales reduced with the most recent versions. I lost interest in Halo after 3 and GoW after the first one. I never liked the style of either; it's that whole all-powerful, killing machines thing. I prefer protagonists to be vulnerable, a bit more humanity. Not hulked up, daft looking, motorcycle helmet wearing, cartoon characters.

 

[MrFox]

True, but I don't think it's going to be enough. Had Epic & Bungie been doing the games then it might have helped. MS should have paid for exclusivity on Destiny. Hopefully they are getting an exclusive on Red Dead.

Tommy McClain

IMO, paying for third party exclusives is stupid. When studios accept money for exclusivity, they kill sales by 2 to 3 times for that game, preferring short term business safety instead of consumer base and industry health. Console makers are basically spending money to remove a game from competitors products. It doesn't bring anything in real revenue. It shrinks the market of competitors, while making their own market non-profitable, and then competitors end up doing it too in retaliation, so it's destructive warfare. Insane publicity budgets are equally stupid and it's not good for anybody. These are predatory practices making the entire industry suffer, because the amount of money spent per game (production + exclusivity money + insane publicity) becomes huge, and the amount of money consumers spend doesn't change. It's the good old "If I don't win, I'll make sure everybody loses".

It may seem a subtle distinction, but I think co-producing in exchange for exclusivity is a much better solution. It spreads the risk among the companies before the market research have any data on the game's profitability, and it's a win for gamers if it's a game that wouldn't have been made otherwise. Still they might as well just expand first parties instead.

Titanfall seems to be somewhere in-between, it was a good move from Microsoft. They shouldn't focus on competitors, they need to invest in first party productions, making sure they have a good AAA for every genre.

 

[zupallinere]

But MS are making money. It might not be much, but it's more than Sony since they are giving away those services for free. I think there's a good business approach discussion in that.

Tommy McClain

Sony isn't giving away Netflix or the those other services they aren't Sony's to own and Sony isn't buying access to Netflix or those other services. Seems to be some confusion on the topic it seem

 

[zupallinere]

Is that enough though? If I remember correctly both games' sales reduced with the most recent versions.

New Halo and new GOW would give the faithful who haven't made the jump to the current generation a reason to do so. May even entice others as well if they end up being very good.

 

[zupallinere]

If paying for access to go online is such a great idea why doesn't MS just make a Gold Live account mandatory for using windows online, except for updates and their app store ??

Based on the feedback from xbox fans it seems MS should bundle a $100 Kinect with any system using Windows 9 on top of charging folks to access online services or using the browser or ...

 

[AzBat]

IMO, paying for third party exclusives is stupid.

I never got into the territory of whether it was smart or stupid. I just said that they need games they can't get on other platforms. PS4 will be the better 3rd party platform. MS can't win that battle. They also don't have time to build more 1st party games. 2nd party(for lack of a better name) would be good too, but that takes time too. It will probably be quicker for MS to pay for timed-exclusivity. I'm not saying it's smart or stupid or if it's good for gamers. Just that is likely MS best chance to get games on its platform that you can't get on others. Eventually they will have to invest more in 1st & 2nd party games as the generation progresses, but right now they don't have that luxury.

Sony isn't giving away Netflix or the those other services they aren't Sony's to own and Sony isn't buying access to Netflix or those other services. Seems to be some confusion on the topic it seem

Either I'm having a hard time explaining things or you're just being dense. I'm leaning to the latter. Sony has to provide servers to PS4 owners for them to be able to access the PSN right? Not just for accessing multiplayer games. Things like voice chat, text messaging, trophies, PSN Store, other user services & apps like the browser & Neflix right? Sony are not charging users to access those services. That's money they are leaving on the table currently compared to MS. It might not be much when thinking of users that are not interested in paying for multiplayer gaming, but it's more than 0 which is what Sony is currently getting. That's all I was saying. Not requiring a paywall seems to be worth more in gamer goodwill though, especially if you're a platform holder that's getting beat by a cheaper more capable device. Personally I see them dropping the paywall sooner rather than later. It doesn't generate goodwill from potential buyers or even former buyers.

Tommy McClain

 

[AzBat]

Sorry for the delay in responding. I'm not going to do a point-by-point reply. I think some of my other replies will hit some both of your points though.

They're basic functionality in CE devices (including TVs and PVRs these days) where they are all free to access on the device except for XB1. They're not essential functionality for a games console, but as features they add value. The difference is MS moves that value behind their paywall, so it's far, far less value. Buy a PS4 (or TV, or tablet, etc.) and get everything except multiplayer gaming for free, meaning if you've no interest in multiplayer, you still have a very functional device. Buy an XB1 and to do anything more than local gaming, you have to pay a subscription. Which is even poorer value when MS made a point of this machine being more than just games. They set it up to be a media box and then charge an additional annual fee to use it with your media services.

I for one certainly won't buy a device that charges me to access my Netflix account when there are so many other options that'll let me use that account for free. MS would have to come up with an exceptional service differentiator to make playing Netflix on XB1 and paying the yearly subscription more appealing than playing Netflix on some other device.

I'm not sure what you can actually do with kinect and TVTVTV without a Gold subscription, turn things on and off and change the volume ?? While not exactly basic functionality, although it almost seems like it this generation, the game dvr/twtich stuff is behind the gold wall.

To quote Eurogamer on the subject

As a gaming device which is what everybody & their brother have been trying to tout these devices as I don't consider media services as a basic functionality. Zupallinere was trying to make it sound like that if you didn't pay for Gold on the XB1 you don't get basic functionality when that is farther from the truth. Basic functionality on a game console should be self-evident. Things like 1) play single player/offline games, 2) ability to access simple gaming services like Achievements/Trophies 3) ability to have basic communication with friends online(voice and/or text) 4) ability to download new content like DLC, full games, etc.

As of right now free Xbox Live on XB1 hits all those points. If you don't pay for Gold you would still have a great system for playing games. You want to do more than play games? Then yeah, you need Gold. Here's what paying for Gold currently gets you over & beyond free Live...

Smart Match, Game DVR, Upload Studio and OneDrive require Xbox Live Gold (sold separately). Game DVR and Upload Studio available in supported games.

• Ability to record gameplay using the Upload app and Game DVR (requires Gold membership)
• Ability to use Kinect voice commands to navigate the system interface and activate features
• App "snapping", a feature that allows using two apps at once divided on two sides of the screen
• Access to "OneGuide", a customizable electronic program guide that integrates TV content and internet content – such as Hulu Plus – into one screen
• Ability to sign-in to the system using Kinect Facial Recognition
• Skype support allows users to video chat and voice chat with each other while playing games and using apps (requires Gold membership, Skype account and Kinect)
• Ability to edit saved gameplay clips in the Upload Studio and upload to SkyDrive (requires Gold membership)

Kinda of neat that you guys are now considering some of XB1's advance features as basic functionality. Would I like those features for free without paying for Gold? Hell yeah, who wouldn't? Would I jump ship to a PS4 to get around not having to pay for them? No. My console is playing games mainly & it doesn't have all the games I'm interested in. So I'm picking the system based on games & all that other stuff is just a distant 2nd. Plus, it wouldn't matter anyway since I would paying for multiplayer anyway. Can't play co-op games without it.

P.S. All this complaining about the paywall will be moot as I believe it's going away.

Tommy McClain

 

[-tkf-]

But MS are making money. It might not be much, but it's more than Sony since they are giving away those services for free. I think there's a good business approach discussion in that.

Tommy McClain

I don't think the cost of providing those free services are that big, the network is there anyway, and the just like I sign in on my 360 without gold and accesses that network for free, I can't see the problem?

You have a valid point on, if the xb1 was a success and outselling the PS4, but imho the paywall would still be a negative on the xb1 part.

And what you are missing here is those people that doesn't have a constant multi-player need. From my experience, many 360 owners enable live on a pr game basis. They would really find the PS4 solution attractive..

 

[-tkf-]

They need to get Halo and Gears of War to market ASAP.

I am sure they will promise them at e3,and I doubt they will make a difference. For every exclusive xb1 game, Sony can counter with its own. And the exclusive play is a long run, save for a megaton, like Microsoft buying Rockstar, it will help but not solve the xb1 problems.

 

[London Geezer]

At this point in time there'd be more of a chance of FB buying Rockstar than MS

 

[zupallinere]

Things like voice chat, text messaging, trophies, PSN Store, other user services & apps like the browser & Neflix right? Sony are not charging users to access those services

Sony charging customers just to use Sony's store ? Even MS doesn't do that.

Sony charges for stuff that cost them sure. Before multiplayer was peer to peer for the most part so they didn't now they do for the ps4 at least. What infrastructure besides an already existing internet connection does Sony need to employ before their Netflix or Crackle app can be used ?

Authentication ? How much does that cost since Sony and MS will authenticate you for FREE
?

 

[zupallinere]

Sorry for the delay in responding. I'm not going to do a point-by-point reply. I think some of my other replies will hit some both of your points though.







As a gaming device which is what everybody & their brother have been trying to tout these devices as I don't consider media services as a basic functionality. Zupallinere was trying to make it sound like that if you didn't pay for Gold on the XB1 you don't get basic functionality when that is farther from the truth. Basic functionality on a game console should be self-evident. Things like 1) play single player/offline games, 2) ability to access simple gaming services like Achievements/Trophies 3) ability to have basic communication with friends online(voice and/or text) 4) ability to download new content like DLC, full games, etc.

As of right now free Xbox Live on XB1 hits all those points. If you don't pay for Gold you would still have a great system for playing games. You want to do more than play games? Then yeah, you need Gold. Here's what paying for Gold currently gets you over & beyond free Live...

Kinda of neat that you guys are now considering some of XB1's advance features as basic functionality. Would I like those features for free without paying for Gold? Hell yeah, who wouldn't? Would I jump ship to a PS4 to get around not having to pay for them? No. My console is playing games mainly & it doesn't have all the games I'm interested in. So I'm picking the system based on games & all that other stuff is just a distant 2nd. Plus, it wouldn't matter anyway since I would paying for multiplayer anyway. Can't play co-op games without it.

P.S. All this complaining about the paywall will be moot as I believe it's going away.

Tommy McClain

So Kinect is basic functionality to the XB1 or sooo important that it can't be unbundled yet it is practically useless without a gold membership. Hey if folks pay it fine but it is kind of funny. Maybe MS should charge ya for playing any games if folks are willing to pay just to login if you were to use the kinect to login

 

[Shortbread]

Sony charging customers just to use Sony's store ? Even MS doesn't do that.

Sony doesn't charge you to surf the PSN Store. Playstation Plus charges, because it's more of service, offering long term rentals or instant game collection (as long as the membership is in place), discounted games, and so on.

And you misread AzBat Quote:

Quote:
Originally Posted by AzBat
Things like voice chat, text messaging, trophies, PSN Store, other user services & apps like the browser & Neflix right? Sony are not charging users to access those services

Edit: If you're wondering what's free or Playstation Plus (subscription) ...there is a chart at the bottom of the page link. http://us.playstation.com/playstation-plus/

 

[zupallinere]

Sony doesn't charge you to surf the PSN Store. Playstation Plus charges, because it's more of service, offering long term rentals or instant game collection (as long as the membership is in place), discounted games, and so on.

And you misread AzBat Quote:

Thanks

 

[Shortbread]

Yeah I know about rentals and all that but you can still buy games without PS plus no ??

Digital Downloads - Yes!

 

[Shifty Geezer]

As a gaming device which is what everybody & their brother have been trying to tout these devices as I don't consider media services as a basic functionality.

Maybe you don't, but it more importantly depends what consumers consider basic. If a feature is everywhere, I expect Joe Public to consider it a basic feature of CE devices. Netflix can be played on everything, including their phone. Ergo it must be a basic feature. Can't be hard to implement and doesn't need an special requirements to run.

P.S. All this complaining about the paywall will be moot as I believe it's going away.

That's the real question. I know some folk seem to tackle these debates from a rather console-war perspective, blaming a company for being evil or whatever, but the discussion is MS vs. Sony business. Presently Sony has a significant sales advantage and also has media functions included in the device price. MS has media functions behind the paywall. Is it better business sense for MS to 'free' those apps? IMO the argument is yes to reach competitive parity. MS aren't in a position to be able to command a premium, so they probably ought to change.

It's worth noting that things could have gone the other way regards media service. If every company charged a yearly fee to use online service, Joe Consumer would just accept it, and possibly choose matching brand devices where the one fee is already paid. that's the ideal. Already got a Samsung phone and am paying the Samsung Live subscription so you can watch Netlfix on it? Then get a Samsung TV and have it already paid, instead of an LG TV and have to also subscribe to LGNetwork to use Netflix on the TV. It could have happened that way when these services rolled out and that's, I guess, what MS was hoping. But it didn't, and a company trying to profit from other company services looks out of place. It's not even possible to justify the choice to Joe Consumer other than a blunt business honesty.

Joe : "How come I have to pay for a Live subscription to watch Netflix on your box when on every device I don't have to?"

What replies can MS come up with based on the discussion here?

MS : "Because we can."

That's the only justification AFAICS. Which is possible when you are the top dog or strongly positioned in your niche, but that's not a great stance when you're just another player in a competitive market.