Devil's Advocate: Video Games

With all the talk going round at the moment about the XBox One and the various 'blunders' it's made, I thought I would attempt to find some method in the madness.  After all, Microsoft, Sony and Nintendo wouldn't be some of the most valuable companies in the world if they didn't have any business sense.

Before I start, I would like to make it clear that I don't necessarily believe any of the points raised below are 'right'- I'm just trying to see the logic behind them.

'Always Online' DRM
The facts: Several games require the device they are being played on to be constantly connected to the internet, otherwise the game is unplayable.  This is usually as anti-piracy measure (as they can check whether you have a legit copy of the game or not if you're connected to their server), but is increasingly being used to boost performance due to cloud computing.
The problem: Although the state of things is rapidly improving, there is still a huge issue with connectivity.  Rural areas are sometimes barely better than dial-up, and for some gamers the internet isn't an option (especially relevant to those in armed forces).  This wouldn't be much of an issue, were it not for the fact that even single player games now require internet connections.  Then comes the issue of if the servers are hacked, meaning even those with good connections can't play...
The company's opinion: Microsoft is the biggest disaster here, as a representative stated that dropping connectivity isn't an issue at all in the modern world, and if you have a problem with it you can just keep playing your XBox 360 and probably couldn't afford a new console anyway.  The more tactile approach would have been to explain that Microsoft has plans to utilise cloud computing to boost the performance of their already-impressive console, and therefore their online policy would be a necessary evil.  Besides that, their online policy didn't require always-online, instead connecting just once every 24 hours- a much more reasonable requirement that was sadly overlooked.
The result: No company has successfully demonstrated the pro's to an online connection for a single player

Yeah, that blunder.

game.  Sim City came close, but due to the huge blunder that was their launch it has dropped off the radar.  Regarding Microsoft, they have u-turned on their policy, again without stating the benefits of cloud computing, instead merely saying the decision to be online or not is down to the consumer.  The message this sends is that Microsoft are untrustworthy, and think their customers know more than they do- not an effective way to run a business.

Pre-owned Games
The facts: Pre-owned games are a huge part of the gaming industry, and many consider them to be a thorn in the publisher's side.  After all, any re-sales are money that isn't going to the publisher.  As such we have platforms such as Steam and companies such as Microsoft that want to prohibit pre-owned games as much as possible.
The problem: This generally makes gaming a very expensive hobby.  A big factor for people buying games is the knowledge that they could get some money back on their purchase in the future.  Aside from that, it feels like a violation of consumer rights as technically you no longer 'own' your games, merely the license to play them.
The company's opinion: There is a perfect comparison to be made here: Steam vs XBox.  Both prohibit the resale of games, but have had very different consumer responses.  Microsoft made a big deal out of it at their presentation, saying it gives more money back to the developer, and stated how it makes sense from a business point of view- leading the consumer to believe they're not cared for, it just proves Microsoft are money-grabbing again.  Steam kept the lack of resales quiet- it wasn't something that needed to be said.  Because they are entirely digital, to the consumer it feels different- it doesn't feel like they're owning an actual product because there's no disc to 'own', and they're ok with that.  On top of that, due to the lack of a physical medium and the various costs associated with manufacture (creating the discs, the labor associated with this, the logistic costs, etc), Steam can afford to charge significantly less whilst still giving proceeds directly to publishers.

The result: Steam is loved by the majority of consumers for being an incredibly cheap platform, whereas XBox is hated due to it grabbing as much money as possible without caring for the consumer.  This resulted in yet another u-turn from Microsoft, and now they're saying you are able to resell any XBox One games- however the consumer remembers how far Microsoft tried to push it and are wondering what they're going to do next.  This wound will take a long time to heal.
Extra analysis:  Pre-owned games are, arguably, a good thing for the industry.  Looking purely at the numbers, it is true that no profit goes to the publisher, which is a bad thing. However, consider this scenario: Someone wants to buy Pokemon X, but thinks it's a bit expensive so they decide to sell their GBA games, as they're now obsolete- they're not being produced, but are still playable.  They get £25, meaning they're now effectively only spending £10 on Pokemon X, yet the publisher still gets the full £35.
They don't get the money from the resale, but they don't make the games any more so there was no way they would get money from it anyway.  Assuming each of those GBA games was sold to a different person, that is now 5 people who thought they would try this 'pokemon' that everyone keeps going on about, and £5 for a game is quite reasonable.  3 of the buyers decide they loved the game and want more, so immediately buy Pokemon X or Y (the publisher has now made a total of £140, which wouldn't have been possible without pre-owned sales).  The 2 that didn't like the game also resell for £5 each, getting their money back to spend on a new game- the 2 people that bought from them love the games and also buy Pokemon X or Y.  Now the publisher has made £210 all from pre-owned sales, not including future games they release that now have 5 new customers.

I'm looking forward to these in case you couldn't tell.

Therefore my solution to the pre-owned problem? For entirely digital games such as on Steam, it costs nothing to keep the games available therefore the publisher gets money from every sale.  For entirely physical games, such as the majority of console games, the customers gained from reselling obsolete games (arguably) balances the resales of current games.  For games that are a mixture of the two, such as those proposed for XBox One, it is easy to put a restriction on reselling until the game becomes obsolete getting the best of both worlds.  Consumers wouldn't be happy, but they wouldn't be angry as they are when you take away their rights altogether.

Kinect is always watching
The facts: The XBox One has a built in camera/microphone that cannot be disabled without turning the power off.  The reason for it staying on is so it can switch the console on by the user saying 'turn on'.  It is also predicted to be used for the purposes of advertising.
The problem: The fear that the device is spying on you, the government is watching everything you do and attempting to control you.  We're entering an Orwellian dystopia.
The company's opinion: Silence.  So far no real rebuttal has been made to criticisms, presumably because Microsoft doesn't think they need to give an answer as all consumers are insane conspiracy theorists.  The official statement for their reasons for implementing the Kinect in the first place are so they can provide a tailor-made experience and improve ease of use.
The result:  Consumers are slowly rationalising this, but is that a good thing?  It is true that no-one's interested in what you're doing in your front room whilst playing video games, but the real issue comes from the advertising side of things.  One scenario I read recently was regarding 'tv achievements'- a new form of advertising to make your tv watching experience more interactive.  The example given was that of being given an achievement if you could demonstrate to your Kinect that you had bought a certain brand of crisps by displaying them to the camera, and this achievement would contribute to your gamerscore.  This terrifies me more than just the government listening for the word 'assassin' to come up in conversation (a somewhat amusing thought when you consider one of the flagship games for XBox is Assassins Creed).  But then I've probably just been watching too much Black Mirror and Wall-E...

This article has been primarily about Microsoft, but that doesn't mean Sony and Nintendo are free from criticism.  At least Microsoft have shown attempts to be innovative, they just lack the people skills to demonstrate these features as good things.  Compare to:
Sony.  Primary marketing strategy consists of saying 'we're not doing the things Microsoft are doing'.  As such the PS4 currently looks like a PS3 with slightly improved graphics, and going by their past record it is probable Sony will wait to see what's successful on other consoles before implementing new features on their own.
Nintendo.  Primary marketing strategy consists of not being involved in console wars, letting Sony and Microsoft battle it out.  All they need to do is remind people that they have the rights to Mario and Zelda.  A huge disappointment considering the potential of their tablet controller for the Wii U.

I am now painfully aware of the length of this post so shall leave it here for now, though I am sure I shall have more to say during the next fiasco...