Originally Posted by ThumperII
Once someone has bought into a platform, the consumers ability to move to competitors is hindered by additional hassle and cost factors. Sony is a competitor until the moment that the consumer sets up their Xbone and starts to play. At that point in the online only scenario, MS has a pretty large competitive advantage that they can turn into increased revenue.
Steam has true competition in that you can go elsewhere and buy games for your current machine with little additional hassle or cost.
MSs biggest hurdle in this is to get people to buy into their ecosystem.
What will you think when Xbox One games are cheaper than PS4 games? Because if this works the way many of us think it will, that is exactly what is going to happen. Publishers will push for the model that makes them more money in the long run. Microsoft is not going to care what a game sells for. They have their fee and once they get it the publisher is going to be able to sell at whatever price they want to. I think Microsoft is smart enough to know that taking away the used game market and giving more sales to the publishers will equal more money for them as well. We as consumers will win because games will be able to be sold at a lower price. Once initial sales drop, prices can drop to keep sales numbers up. Everyone has a threshold for what they want to pay for certain games. I JUST bought GT5 for $20. I had no interest in it at any other price point. I don't buy used games so Sony got the money they deserved in the end. How many sales did they lose to Gamestop on used purchases of their biggest hitting IP ever? I was patient and didn't buy used because I believe it is wrong (and I despise Gamestop).
If Microsoft was the only console maker and PCs couldn't play games, game prices would still drop. Every gamer is willing to spend a certain amount, and once that price is hit they buy. The faster the price drops in price tiers the more relevant the title remains. This is basic business and economics stuff. Large flat screen HDTVs don't still cost $10,000. It isn't all because of market competition, although that does play a part. There are only so many people willing to pay the initial crazy prices. Cheaper manufacturing comes along and R&D costs are paid for early on. At $5000 more people were willing to pay the price so sales increased. At $3000 many many more people were willing to buy in then. Now, anyone can buy a large HDTV for almost nothing (And the quality of these cheap HDTVs is far better than expensive models from only a few years ago). If TV makers never dropped the prices, very few people would own an HDTV. Sure their profit margins would have been HUGE, but they make more money buy selling millions of TVs and not a couple thousand. Market competition is driving the TV makers to lose money by selling at prices they really can't. Consumer ignorance or bliss with "good enough" means the cheapest HDTV sell the most. Quality products don't have much of a market because the market doesn't want it or can't afford it.
Microsoft is trying to lower the costs of games. Removing the need for making millions of discs, cases, booklets, packaging, shipping, return shipping for unsold units saves a lot of money. Each game can now be sold with absolutely no wasted money. By trying to ensure the publisher gets a cut of every single sale means the Publishers make more money upfront. With control over their game pricing they can dictate how quickly price drops happen. High selling titles will remain at full price as you would expect. Poor selling titles will receive price drops faster. The in between area is what excites me most. Once a game is profitable the price can be slashed. Publishers will be competing against each others titles and prices will change to boost sales/ steal sales from a competitor. Remember back to 2K sports releasing brand new competitors to Madden, NBA Live, NHL, etc for $20? It was unheard of, they sold millions of copies, stealing sales from EA. EA retaliated by buying the rights to every sport they could. EA can't buy licenses to everything so they have to compete with product. I think we may see more competition this gen coming because it will be easier for games to make profits.
I strongly believe what Microsoft is doing will change gaming in a positive way that we can't see yet. I remember having to get DSL internet back when Live first launched. Everyone freaked about needing broadband internet. With that came fantastic online console gaming, downloadable content, friends lists, title updates to fix problems, updated rosters, etc. Each console that Microsoft has released has changed drastically from launch through its life. They have tried so many ideas and many of them have been great, some weren't. Looking back I can honestly say that Microsoft has truly made gaming what it is today. I have a hard time believing Sony would be where they are today without MS in the mix.
I give Microsoft a lot of credit. They have pushed boundaries in gaming many times before where analysts/gamers questioned the sanity of everyone at Redmond. They haven't let me down yet, and there is no reason to think they will this November. I cannot wait to see what the One can do. I would love to own my fourth generation Playstation console, but right now I have no reason to get excited. There are no games at launch for them I am excited about. Take away the DRM, Online Check-in, $399 price and Used Games bullet points and their presentation stunk. DRM doesn't apply to me as I don't buy or sell used games (Microsoft is not going to shut down the servers ANY time soon). My consoles are always online, and if they aren't I have 4G LTE everywhere I go (unlimited data to boot). Price is of no concern as I think they both are priced where they should be (and I am fortunate thankfully), I do look forward to seeing what a few of their in house studios can do with that hardware.
Very exciting time to be a gamer. This will be a generation of great change, and although it doesn't seem like it, the best times are coming.