Welcome to the digital world
Posted by Tobold's Blog [HTML][XML][PERM][FULL] on 13 June 2013, 7:33 am
So Microsoft replied to their perceived defeat at E3 by stating: "We're trying to do something pretty big in terms of moving the industry forward for console gaming into the digital world. We believe the digital world is the future, and we believe digital is better.". I find that a somewhat unfortunate phrase. The last analog media were tape decks and LPs, every CD, DVD, and Blue-ray disc is digital, so the PS4 isn't any less digital than the XBone. While I had a ZX81 in 1981 that used an analog tape-deck for storing games, I am pretty certain that consoles have always been digital from the start.

I think what Microsoft means is that the future world will be virtual, as opposed to physical. I agree with CNN saying that Sony "won" E3 by "basically doing nothing", that is by saying that the PS4 discs would work pretty much exactly like PS1 discs. That is comforting for customers wary of any change, but hardly innovative. Most people never understood the difference between owning a physical copy of a book or disc and owning the contents of that book or disc. Even the law on reselling media depends on those media being physical. Any move towards a virtual future will leave existing laws and ways of thinking about intellectual property behind, and that will be scary for some people.

That is not to say that any change is necessarily bad. For example I am pretty certain that game companies currently "price in" the lost sales due to used games and piracy into the price of their games. A future in which media a virtual and can't be pirated or resold could thus result in lower prices. Many people (including commenters on this blog) have a very confused opinion about what constitutes a monopoly, and believe that Microsoft would keep prices high because they control who can make XBox games. That totally fails to take into account the competition from other consoles, PC games, and mobile gaming platforms. Apple has the same control about what games are published on the iOS than Microsoft has over the XBox, and iOS games are dirt cheap.

In fact when Microsoft dreams of a future without physical media, something like an iPad must be very much on their mind. Apple is doing quite well without physical media, and so are its customers. And I think this is exactly where Microsoft went wrong: They didn't go far enough with their XBone. They got stuck half-way between the physical and the virtual world, trying to please everybody and ending up pleasing nobody. The XBox Two (or whatever the next generation will be called) will presumably not have a disc drive at all, only a hard disc and an internet connection. If Microsoft wanted to be a visionary of the virtual future, they should have made the XBone virtual only, with no physical discs. That would have left Sony looking like dinosaurs with a 20 year old disc system compared to Microsoft's and Apple's disc-less system. By doing things by half, and still having discs but tethering them to the virtual world, Microsoft ended up with the worst of both worlds. They even could have beat Sony on price if they had gone with a much smaller console without disc drive. And nobody would have asked questions about privacy and DRM, just like nobody asks these questions to Apple.

As it is, people who prefer discs to online downloads will probably buy a PS4. Not that the average customer is very concerned about privacy (just look at his Facebook page) or DRM (just look at his App Store purchases and Steam library). The average customer's first concern will be what games he can play, and with so many multi-platform games out there the secondary concern of the $100 price difference will probably carry the day for Sony. As games availability is the first criterion of choice, the XBone will probably outsell the Wii U. And given past history it is not unlikely that come Christmas 2013 both the PS4 and the XBone will be sold out, which makes sales more a function of production capacity than anything else.

Christmas 2020 there will be new consoles, and none of them will have a disc drive. Microsoft's vision might well come true, they just bungled the execution of it in this console generation.
Tobold's Blog

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