Next Microsoft Console Rumored to be Discless - AVS Forum
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post #1 of 62 Old 03-09-2012, 06:30 AM - Thread Starter
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http://www.mcvuk.com/news/read/exclu...xt-xbox/092534

http://www.webpronews.com/rumor-xbox...-drive-2012-03

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MCV has learnt that Microsoft has been telling partners that the Next Xbox will NOT include a disc drive.

The briefings have been issued under what MCV’s source describes as “the strictest NDA” they have ever encountered.

Although the console will not include a disc drive, it will offer compatibility with some sort of interchangeable solid-state card storage, although it is not known whether this will be proprietary or a more standard format such as SD.

Furthermore, a 2013 launch date for the hardware has been confirmed. What is less clear, however, is the intended timing of Microsoft’s announcement.

As revealed by MCV earlier this year, an E3 2012 reveal could still very much be on the cards.

The omission of a disc drive signifies the beginning of a new era for games consoles and represents a potentially savage blow to the already beleaguered video games retail sector.

Of course, retailers will tell you that they are already involved in the digital market. Indeed, GAME is enjoying growing revenue from the sale of digital download cards for digital-only titles and DLC.

Nonetheless, the abolition of physical games is bad news for retail however it is spun. With the Next Xbox positioned as a digital centric platform, the relevance of retail will once once again eroded.

When contacted by MCV Microsoft said that it does not comment on rumour and speculation.

UPDATE: Microsoft has issued a fuller statement to MCV.

“Xbox 360 has found new ways to extend its lifecycle like introducing the world to controller-free experiences with Kinect and re-inventing the console with a new dashboard and new entertainment content partnerships. We are always thinking about what is next for our platform and how to continue to defy the lifecycle convention. Beyond that we do not comment on rumors or speculation.”

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post #2 of 62 Old 03-09-2012, 10:25 AM
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Sounds very interesting...


I've got mixed feelings about this:

1. Blu Ray players are cheap enough now, that I don't think people need to have a BD player built in.

2. The lack of moving parts from an optical drive is nice for a number of reasons. Part of the reason that 360's are so loud, is the noise created by the disk drive. No disk drive means less noise, although PS3 slims don't make all that much noise.

3. Also, you'd have to imagine that eliminating the disk drive allows the console to have a smaller footprint, which is important if they ever want to make any serious in-roads into the Japanese market, although an argument can be made that the Japanese will NEVER choose an American console over Sony or Nintendo's offerings.

4. There is certainly a cost savings to not having an optical drive, although I'm not sure it would be very significant.

5. From Microsoft's standpoint, they eliminate the Redbox scenario, although I'm not sure if this is that great for them. Redbox machines aren't going to be equipped to eject flash cards, so that means that people won't be able to rent Xbox 720 games for 2 bucks a nite. Whether this helps or hurts sales of full priced games is debatable.

6. The lack of disks doesn't mean that you won't be able to buy retail games, but it could have a "psychological" effect on customers, encouraging them to download more games, rather than get their games on flash cards. I know that sounds weird, but I think there is some minor truth there...

7. You don't have to worry about getting your disks resurfaced when they get scratched to hell, although BD disks don't seem to have that problem as much with that protective layer on them.

8. If Microsoft goes with a Kiosk / removable HDD option, where you bring your little HDD to the store and have a game copied to it (rather than buying individual flash cards), then you never have to concern yourself with a game being out of stock.



On the bad side:


1. You won't be able to watch Blu Ray movies on it, which will suck to a degree because you might not have a BD player in that "other" room, so to speak. Certainly, BD players are cheap enough now, but it's not like people have one in every room in the house, so getting another device that can play BD's isn't so horrible.

2. Cost.... Any way you slice it, the cost to Microsoft and the publishers for the physical media is going to rise significantly compared to pressing disks. (assuming they don't go the Kiosk route) It's hard to imagine that increase in costs not being passed on to consumers.

3. As a consumer, not being able to go to Redbox and try a game for a mere 2 bucks to see if it's craptacular or not, does kinda suck.

4. What if instead of games being sold on individual flash cards, you will get some type of portable hard drive type thing that pops into the 720, and you have to take that with you to GameStop or BestBuy, and use the in store Kiosk to download the game to your removable storage device? The thing that sucks about that is:


1. Waiting in line for the kiosk

2. Waiting around for the files to be copied to your drive

3. If retail stores don't have an overabundance of a certain game, you don't get the bargain bin discounts designed to clear out excess stock. With the Kiosk model, no stores will ever have "too much" stock of a game.
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post #3 of 62 Old 03-09-2012, 10:36 AM
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highly, highly doubt it. regardless, it's just a rumor and I expect the exact same discussion as the last time the rumor came up.

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post #4 of 62 Old 03-09-2012, 11:35 AM
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doesn't that also kind of rain on the backwards compatibility parade? i know sony sort of pioneered this effort with the PS3, so maybe i'm being naive in thinking microsoft would include the ability to play your 360 games on a new console.

still, original 360s would play xbox games, original PS3s would play PS2 games, and original Wii's would play gamecube games. so maybe there's a precedent for a launch device that plays discs with backwards compatibility in mind, and then a year later they release the 'slim', discless variety?

too far in the future to speculate too much, i guess.

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post #5 of 62 Old 03-09-2012, 11:58 AM
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As a person who has been espousing the idea of disc-less NexBox...

I don't believe this "leak" at all. Completely fabricated rumor, if you ask me.
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post #6 of 62 Old 03-09-2012, 04:37 PM
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Can't this topic be discussed in one of the many other NextBox speculation threads? There are at least two others in the top-10 here at all times, doesn't seem like we need a third.
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post #7 of 62 Old 03-09-2012, 08:32 PM
 
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I AM SO GLAD THAT WE HAVE ANOTHER ONE OF THESE THREADS. I'm sure that the conversation here will be stimulating and not just retreading the same baseless rumors, hearsay, and conjecture that other threads have been babbling on endlessly about for the last six years.

Yup. Stimulating, I'm sure.
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post #8 of 62 Old 03-09-2012, 08:46 PM
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*high five*, james...

like they say, if you wait around long enough, it always comes back into style... i think discless was around page 20, page 40, page 60 of the rumor threads...
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post #9 of 62 Old 03-10-2012, 09:00 AM
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Quote:
Originally Posted by Anthony1 View Post

Sounds very interesting...

4. What if instead of games being sold on individual flash cards, you will get some type of portable hard drive type thing that pops into the 720, and you have to take that with you to GameStop or BestBuy, and use the in store Kiosk to download the game to your removable storage device? The thing that sucks about that is:


1. Waiting in line for the kiosk

2. Waiting around for the files to be copied to your drive

3. If retail stores don't have an overabundance of a certain game, you don't get the bargain bin discounts designed to clear out excess stock. With the Kiosk model, no stores will ever have "too much" stock of a game.

To me the kiosk method is the only one that is viable...

Waiting in line will not be much of an issue imo (and if it is I could see certain busy stores getting 2 kiosks) or doing some kind of a timer based unlock where you could "get" the game ahead of its release date and it unlocks at midnight of launch day. Midnight launches would be the only issue with a kiosk based system.

Assuming this will be based off usb 3.0 it should be able to transfer 50 gigs in a few mins.... it takes that long to get through the line at a best buy or gamestop.

The third point is the only issue.... that said if the cost of games is cheaper for them (and the kiosk method would be for them since they don't have to guess how many copies to produce and have them sit on shelves) I could see them offering steam or xbla like specials more often but for full games.
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post #10 of 62 Old 03-10-2012, 09:41 AM
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Science fiction, none of this is remotely feasible in the next few years. They will have discs.

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post #11 of 62 Old 03-10-2012, 12:47 PM
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I currently don't buy used games but I would absolutely by a used dd license. Product would be indistinguishable from new. Can't see this happening though.
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post #12 of 62 Old 03-11-2012, 06:32 PM
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post #13 of 62 Old 03-11-2012, 07:37 PM - Thread Starter
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lol, now it's all about "big choices" and "visceral combat"
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post #14 of 62 Old 03-11-2012, 07:42 PM
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They've been talking about moving to digital distribution for the next generation for years now. This is nothing new.

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post #15 of 62 Old 03-12-2012, 08:52 AM
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Quote:
Originally Posted by tgable View Post

Science fiction, none of this is remotely feasible in the next few years. They will have discs.

I agree with you 100%. Furthermore...if MS actually did this...it would instantly become a Harvard BS case study on one of the dumbest corporate blunders ever. It is tantamount to GM deciding on a whelm to convert all of its cars to Battery power in the next cycle. 100% of consoles have some type of disc media drive. For MS to just slam the brakes on 100% of the XBox 360 market in its next console is flat out stupid IMO. What is wrong with having both formats and choice like the 360? Like you, I think this is pure fantasy and rumoring.
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post #16 of 62 Old 03-12-2012, 11:04 AM
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They could go discless if they wanted to. Eventually, everything will be Flash/solid state. It has to happen at some point. Very high density solid state memory is now cheap enough to be used as a delivery medium. This was not possible even five years ago. And it will only get cheaper.

If Microsoft wanted the next gen XBOX to be discless, they could offer backward compatability via an optional add-on drive. It would be priced at or under cost for marketing purposes. But all new games would be intended to be on solid state cards.

Redbox has also come up as a discussion, and even those types of services will go discless, too. With the chip cheap enough, you could just exchange it at the kiosk for a new one each time you rent. And because it's re-usable, if you kept the chip, you could have the option to download your next rental, overwriting the previous. After your rental period expires, the chip automatically erases itself, though it would still be re-usable. Same with games at Gamestop.

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post #17 of 62 Old 03-12-2012, 11:06 AM
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I don't get why people think games would be sold on USB drives. Yes, the rumor mentioned that the Xbox would have a way to connect solid state drives, but they're not going to provide games that way. It's just not feasible, as someone said. More likely it will be for transferring movies or tv shows to your computer or something.

They're going disc-less because we're going to be downloading all of our games. Look at the downloads that are available already. Microsoft is going the way of Apple, the cloud, where they own the store, they own the product, and they own the machine you play it on. A tera-byte of storage so you can buy and download all the games, movies, tv shows, DLC or music you want, all in your Xbox, all stored on the cloud, easy to re-download anytime you need.

Microsoft sells you a $60 game directly that you download to your machine. They don't have to lose a cut to Best Buy or to disc manufacturers or transportation or anything. It all goes directly to them.

Remember the rumor about the machine not being able to play used games? That's how it happens. Because you can't buy a used game because no one can sell you a used game.

No Best Buy sales, no Amazon deals, no trade-ins or swapping or anything. It all comes from Microsoft and goes back to Microsoft. This is the new digital marketplace, where we don't own anything physical.

I don't know if it will work. I don't know if console games can work the same way that the App Store games have worked in terms of distribution. But they're going to give it a shot, because if they win, they win big. If they lose, they make a new console in a few years or come out with a disc drive attachment or anything.

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post #18 of 62 Old 03-12-2012, 11:09 AM
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Downloading as a primary source of delivery is years away in this country. Data caps and substandard internet in the United States is what's preventing this.

Europe will go download first... followed perhaps ten years after by the greedy corporate U.S.

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post #19 of 62 Old 03-12-2012, 12:28 PM
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Quote:
Originally Posted by jrinck View Post

Downloading as a primary source of delivery is years away in this country. Data caps and substandard internet in the United States is what's preventing this.

Europe will go download first... followed perhaps ten years after by the greedy corporate U.S.

This point is also true. Even though I disagree with the Europe forecast. I don't think they will do it there either. I frankly don't understand why many on these threads want a monopolistic, unreliable, low quality format in a next generation console anyway. One would be completely under utilizing the capabilities of even today's graphic technology playing on the net and cloud exclusively. By a huge margin (that approaches a chasm)...Blu-Ray is by far the top quality delivery format for graphics and video of all stripes for the next 10 years. MS doesn't even need to launch a next generation console to go DD only. They can do it with the XBox 360 right now...and bypass its DVD drive. This is a really silly rumor IMO. I personally don't want to play the DD only game on XBox Live. I like to shop in physical stores with product and inventory. I like choice. And I will always buy a better quality system that allows me to do just that.
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post #20 of 62 Old 03-12-2012, 04:45 PM
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Quote:
Originally Posted by jrinck View Post

Downloading as a primary source of delivery is years away in this country. Data caps and substandard internet in the United States is what's preventing this.

Not to mention the fact that nobody seems to want to fully test the power of brick and mortar. Even Apple deals with brick and mortar, with their own stores and Best Buy, etc, etc.

If Microsoft was really crazy, they would simply advertise on TV about a website and phone number, and just sell direct. Download only on games, and direct sales via UPS to consumers. Completely eliminate any middle man.

Will you sacrifice millions of potential customers that don't have internet access? Yep. But, those customers honestly don't make you all that much money anyways. And you'll just sign a deal with Wal-Mart and Target, etc, to have a kiosk there where people can transfer games if they don't have internet. (or something like that).

If MS wanted to get really crazy, they could do it! If only they had the cajones to try it...
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post #21 of 62 Old 03-12-2012, 09:05 PM
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Microsoft likes making money and the only thing your suggestion would do is drastically reduce that ability.

There are far too many offline gamers, too many online gamers that still prefer physical media, and internet infrastructure is still years away from being able to support an all digital future to impliment such a plan anytime soon.

They have years of waiting on broadband penetration rates to expand, for internet infrastructure in general to improve and grow capacity (And for ISP's that are increasingly capping people to expand on their limits to reflect that improved infrastructure and changed needs of their consumers), and to slowly change the mindset of the consumer to accept (And even prefer) digital distribution and to slowly ween retailers off game sales (And since they're never going to go to what amounts to a mail order business like you suggested, they have to protect their relationships with B&M and online retailers since they're going to remain important to serve as outlets to sell their systems in an all digital world if it were to come about, to sell their accessories, and to sell their subscription and points cards for those that want to limit where their cc number makes an appearance).

That takes years and it's never going to be a flip of a switch. What I suspect we will see with this upcoming console generation, at least on the Xbox 720 and PS4, is for digital distribution to hold an approximately equal position to physical in level of importance. All games getting downloadable releases, same day releases, competitive pricing, etc. A continued gradual evolution (Digital sales were introduced in the previous console generation, grew in importance and acceptance as a secondary means of distribution in the current generation, so logically being on a equal footing with physical distribution is what's ahead for consoles).
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post #22 of 62 Old 03-12-2012, 09:08 PM
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Quote:
Originally Posted by Anthony1 View Post

"If Microsoft was really crazy, they would simply advertise on TV about a website and phone number, and just sell direct. Download only on games, and direct sales via UPS to consumers. Completely eliminate any middle man."
If MS wanted to get really crazy, they could do it! If only they had the cajones to try it...

And they would get clobbered IMO. Nature abhors a vacuum. And nothing is more Darwinian than American Retail. The empire would strike back in spades. MS competitors would seize the initiative in broad openings in vulnerable areas. Retail would be a willing and spirited vicar for competitive products. Even Linux could explode to attach itself to such vulnerability. MS would have to be ready to spend and eat a ton of its earnings to just maintain rough parity with the combined advertising power of competitors and retail facilitators. Cajones...not! MS is a giant with mice nuts on a risk of that magnitude. And everyone's new baby...kiosks...are likely the riskiest part of this scenario. If election machines can be hacked...just imagine risks to your personal information on a wide distribution of those timebombs! NO THANK YOU.
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post #23 of 62 Old 03-13-2012, 01:46 AM
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Quote:
Originally Posted by Leo_Ames View Post

Microsoft likes making money and the only thing your suggestion would do is drastically reduce that ability.

There are far too many offline gamers, too many online gamers that still prefer physical media, and internet infrastructure is still years away from being able to support an all digital future to impliment such a plan anytime soon.

They have years of waiting on broadband penetration rates to expand, for internet infrastructure in general to improve and grow capacity (And for ISP's that are increasingly capping people to expand on their limits to reflect that improved infrastructure and changed needs of their consumers), and to slowly change the mindset of the consumer to accept (And even prefer) digital distribution and to slowly ween retailers off game sales (You have to protect your relationships with B&M and online retailers since they're going to remain important to serve as outlets to sell your hardware, to sell your accessories, and to sell your subscription and points cards for those that want to limit where their cc number makes an appearance).

That takes years and it's never going to be a flip of a switch. What I suspect we will see with this upcoming console generation, at least on the Xbox 720 and PS4, is for digital distribution to hold an approximately equal position to physical in level of importance. All games getting downloadable releases, same day releases, competitive pricing, etc. A continued gradual evolution (Digital sales were introduced in the previous console generation, grew in importance and acceptance as a secondary means of distribution in the current generation, so logically being on a equal footing with physical distribution is what's ahead for consoles).

Hmm, very good points. But you can't buy a flash drive for every game you want to buy. It just seems like compared to a disc you completely lose the cost efficiency. So how does Microsoft get away with a disc-less console?

Maybe the disc-less console is the standard version for those with broadband who don't feel the need for a disc drive, and there will be another version ($100 more?) that includes an add-on disc drive. Is that insane? That seems insane. But this speculation is so much more fun than whatever we ultimately end up with!

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post #24 of 62 Old 03-13-2012, 02:22 AM
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So how does Microsoft get away with a disc-less console?

They don't.

Optical media is so much cheaper on a per gig basis compared to alternatives like flash media and SSD's that they have almost no choice but to stick with optical media. Particularly since game sizes are growing and I think we all expect things like lossless audio, 1080p native graphics, and such to be standard in the upcoming generation.

Even Nintendo, often a generation behind, is confirmed to be using a single layered disc with 25 gigs of capacity (Widely assumed to be based on Blu-Ray tech) and Sony has had higher capacity optical disc since the Playstation 3 launched. And multiple disc releases on the 360 have been growing in number and MS even modified their disc format recently, in part, to open up more space on their DVD-9 disc for developers to utilize. So we're going to need even more space than DVD-9 offers which swings the equation even more in favor of optical media for the coming console generation

Flash media exists for handhelds since the special needs of handhelds make it worth the premium. Game sizes are much smaller (Vita cards are 2 and 4 gigs, for instance) which helps keep the media viable despite its premium cost, durability is more important due to their portable nature, power consumption is obviously crucial and optical drives are battery suckers compared to flash media, minimizing load times is of greater importance due to the short and quick natire of much portable gaming, and keeping the size of the system to a minimum is important.

On a console, these points don't have nearly the same level of importance and we're facing a generation where AAA games are going to be far larger than the 8 gigs or so they average today. That points to optical media since something like a 50 gig double layered Blu-Ray disc cost just pennies to manufacture while just 8 gigs of flash memory cost far more and will always be the more expensive of the two due the nature of the technology.

Short of a new type of technology that we don't yet envision, optical media is not only the past and present for physical game distribution, but the future as well. The popular alternatives that get mentioned from time to time are no where close to being price competitive and will remain in the domain of handhelds.

The big question with the Xbox 720 isn't if it's going to go all digital (I'd bet my life on that not happening) or if it's going to be disc-less (It isn't an option simply out of pure economics, as long as they physically distribute games in the forseeable future, it's going to be on optical media since optical media cost a mere fraction of the alternatives), but just what type of optical media will it be using. That and if it will be backwards compatible (Another consideration in regards to the type of media since compatibility with most people's 360 content obviously points towards needing an optical drive) are the two big questions I have about it.

Quote:
Originally Posted by AutoWobble View Post

Maybe the disc-less console is the standard version for those with broadband who don't feel the need for a disc drive, and there will be another version ($100 more?) that includes an add-on disc drive. Is that insane? That seems insane. But this speculation is so much more fun than whatever we ultimately end up with!

I could envision such options, particularly if my prediction comes to fruition and all games see a same-day digital release where the gamer that wants to go all digital won't be missing out on any games. Although I wouldn't count on such a large price difference since a disc-less Xbox 720 is going to need far more storage space than one equipped with a disc drive.

Sony already provided gamers with that option a generation ago in the handheld arena with the PSP Go (Which if I'm not mistaken cost more than a PSP 3000 did at the time, in part, due to its 16 gigs of built in flash memory). So it would be foolish to dismiss this as a possible option in the console world with this upcoming generation although I don't see the same level of benefits. On the PSP, losing the drive reduced the size and weight of the unit and the convenience of all your games residing on the system's memory was great (And reading the games off flash memory was beneficial for loadtimes and battery consumption). It was a significant benefit for the gamer that didn't mind losing the ability to play UMD's and having a somewhat limited selection of games (And oftentimes a delayed release for games that did get released digitally)

What do you gain in the console world by trading off your option of using a disc? Someone mentioned reduced noise, but you get the same benefit on a disc console by playing a download. Even you hardly need a disc-less console or a download to be able to enjoy a game without the sound of the drive thanks to the option to install disc (often mandatory on the PS3, and an option on all 360 releases for years now). Beyond not having to change disc (A positive for convenience, no doubt, but hardly as important for a console as it was for a handheld where it allows your game library to travel with you), I don't see much of a benefit with such a SKU with this coming generation. And two such different SKU's increases the manufacturing cost of the platform.

I suspect every Xbox 720 will be able to play physical Xbox 720 games.
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post #25 of 62 Old 03-13-2012, 07:15 AM
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Retailers could still have a wall dedicated to browsing games. Instead of having to look for someone at wallmart to open the glass and get the game you want you would just look at a wall poster of current games and then go to the checkout stand and say I want game number B35. If it's a kiosk then you could do it on your own.
Just bring in your removable harddrive plug it into a device with lots of harddrive ports and 50 GIG games could transfer in less than 6 min. Kiosk machines could do multiple customers at same time. Redbox?
Optical media is dead.
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post #26 of 62 Old 03-13-2012, 08:07 AM
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Originally Posted by Arcadia88 View Post

Retailers could still have a wall dedicated to browsing games. Instead of having to look for someone at wallmart to open the glass and get the game you want you would just look at a wall poster of current games and then go to the checkout stand and say I want game number B35.

This is how Toys R Us used to sell games back in the day (NES era). You'd browse a wall of game pictures, grab a ticket for the game you wanted, take it to the checker and pay for it, then you'd redeem the ticket at a dedicated kiosk. Fond memories.

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Optical media is dead.

Inevitable, but it's all a question of when and how it dies. There's a lot more to "retail" than just boxes on a shelf. There's business in distribution/delivery and production. So the transition will happen carefully and slowly. But the problem is that if a company like MS doesn't push DD hard, then the other businesses involved in physical media (retailers, distributors, manufacturing, etc) will drag their heels as long as possible. So the "death" couldn't happen too slowly, but it also can't happen too quickly.

And then there are the perpetual consumer holdouts who don't connect their consoles.

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post #27 of 62 Old 03-13-2012, 09:26 AM
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I'm with Leo on this, it's all about the pricing.

Brief perusal of retail pricing on the various options on Newegg shows:

USB
64gb usb3.0 runs about $100
32gb usb3.0 runs about $32
32gb usb2.0 runs about $24

SD
32gb Micro SDHC Class 10 runs about $38
32gb Micro SDHC Class 4 runs about $26

Blu-ray Media
50gb 6x BD-R runs about $5.30 per disc
25gb 6x BD-R runs about $1.00 per disc
25gb 4x BD-R runs about $.72 per disc

Obviously, wholesale pricing will be far lower, but the disparity between solid-state and optical speaks for itself and would remain at the wholesale level.

Optical media is far cheaper and maintains the possibility of backwards compatibility with legacy DVD-9 titles.

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post #28 of 62 Old 03-13-2012, 10:00 AM
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Originally Posted by Arcadia88 View Post

If it's a kiosk then you could do it on your own.
Just bring in your removable harddrive plug it into a device with lots of harddrive ports and 50 GIG games could transfer in less than 6 min. Kiosk machines could do multiple customers at same time. Redbox?

That would be cool.. in 2020. Until then it will be a mix of optical and DD. Infrastructure and price dictate what MS can do, not science fiction.

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post #29 of 62 Old 03-13-2012, 10:29 AM
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The sata hotswapable drives have been around for almost 10 years no need to wait for 2020. My movie server box I built myself for less than 500 bucks plus the cost of the drives. I get over 120 MB per second on transfers. It's very possible to transfer 50Gig games, full bit blueray movies and stuff in short amounts of time. But yea someone would have to front the money for the transfer device. Infrastructure is beeyoch.
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post #30 of 62 Old 03-13-2012, 11:21 AM
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There are far too many offline gamers, too many online gamers that still prefer physical media, and internet infrastructure is still years away from being able to support an all digital future to impliment such a plan anytime soon.


While what I was talking about will never happen, I don't think the above reason is why. Sure, Microsoft will never completely screw over the retailers, but it's not because of their fear of so many of their customers being offline. Microsoft will never do this because they don't JUST sell video game stuff. They sell a bunch of other products, and they still need support from retail to sell those "other" products.

However, if Microsoft was a company like Nintendo, in which their only real product is video games, then they could actually get away with severing all ties to brick and mortar.

Would it be a dangerous, risky move on their part? Absolutely.


Would it kill them as a company? Hardly.


Consumers that are offline really don't make Microsoft all that much money. Their bread and butter is the online consumer that pays a monthly fee for Xbox Live gold service, rents movies via their Zune Video Marketplace, downloads Xbox Live Arcade games, and various mappacks, etc, etc. They want customers that are "all in" with their digital ecosystem. Basically, they would love nothing more than to emulate what Apple is doing. If you buy an Apple product, you're pretty much tied to the entire Apple ecosystem, and you can't really exist very well trying to avoid that ecosystem.


The Microsoft customer that goes to Wal-Mart, and buys the cheapest Xbox system, and then goes to Redbox to rent a game, or goes to the swap meet, or craigslist to get a bunch of used games, isn't helping Microsoft in any way, shape or form. (ok, that might be an exaggeration, but you get the point)

There are quite a few Xbox customers that don't provide anything towards Microsoft's bottom line. They buy the hardware on sale, at near cost, they rent or buy used, and they never walk into a retail store and pay the full $59.99 for a brand spanking new game. Their console is offline, so they don't pay $60 per year for each Xbox Live Gold account, and they aren't paying any money for mappacks or Xbox Live Arcade games, or renting videos from the Zune Marketplace.

Sure, if Microsoft went 100 percent digital, and went with direct sales (with TONS AND TONS OF TV Advertising), they would disenfranchise customers like this, but my argument is that customers like that aren't helping them anyways.

They make the real money off the families that have broadband, and are "all-in" so to speak....
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