Why Xbox Live gaming should be free for all
Over the weekend, I spent some time playing online. I did so on Xbox Live and through games on both my PS3 and Wii. All the while, I was thinking about the one simple fact that kept sticking out in my head: for now at least, I can play online with my Wii and Playstation 3 and the experience is basically the same.
And considering Microsoft keeps losing ground to both Sony and Nintendo, why not find a new way to offer a more compelling alternative out of the company's most popular service?
Sure, it sounds radical and losing $50 per year from the millions of Xbox Live subscribers may be a major sticking point here, but it needs to be done. Microsoft's latest NPD numbers have been less than stellar and the Wii, DS, Playstation 3, and the PSP all sold better than the company's console in July. And if you want to compete in the hardware business, that's simply unacceptable.
To make matters worse, the big lead Microsoft had over Sony in the third-party sphere is practically eliminated and it doesn't look like Nintendo will slow down anytime soon, nor will the Xbox 360 become a force in Asia.
So what does Microsoft need to do to right the ship and really turn things around? Announce that all Xbox Live memberships will be free and all gamers can play online without a hitch. It's radical, for sure, but it's the best move Microsoft can make right now.
It's about the size
Making Xbox Live free to all gamers allows Microsoft to boast that it has the largest network of multi-platform users in the world. Right now, Microsoft is trying to become the world's leader in multi-platform gaming. And although it has done relatively well considering Xbox 360 sales have not matched competitors and Games for Windows Live is shaky, while Zune ownership is suspect, it will immediately put Microsoft into a position where developers can truly create a "Microsoft Experience."
Is there a need to do so?
Invariably, this argument will go to the argument that if people are willing to pay now, why should Microsoft tell them they don't have to? Why buy the cow if you can get the milk for free?
But that argument is extremely short-sighted and fails to truly address what's going on in the market. Xbox Live is the cornerstone of Microsoft's broader gaming strategy. Without it, the Xbox 360 wouldn't be half as popular as it is today and it's still the only real benefit that still looms over Sony's head.
Realizing that, Sony has consistently said that it plans on rolling out a major online initiative that revolves around its trust in Home and its aims are firmly planted on Microsoft. But in order to compete, Sony will need to pull out all the stops and try to create an experience that either matches or eclipses the ease with which we play games on Xbox Live. And to be honest, I think Sony can do it eventually.
But why should Microsoft let that happen? Why should Microsoft give Sony an advantage or at the very least, let it into the online space? By making Xbox Live free, the company adds every Xbox owner to the list of potential users and immediately puts Sony back on its heels. Sony has invested so much as it is, can it really justify a free online service?
Now I realize the same can be said for Microsoft, but with Xbox Live, the company has an installed base of users and content that could make up for that loss. Sure, Microsoft will lose $50 per year in revenue at first, but how many of those gamers would be willing to throw that back into the service by buying movies, adding online maps to their games, or generally expanding the amount of content on their consoles? I'm willing to bet that the majority would.
Silver membership users can do that now, but many of those individuals have balked at paying the $50 each year for online play and generally don't spend the amount of time you would expect them to on the service. But once online gaming is free and they get into the fold, a whole new group of people will be able to acquire online maps and play with friends, which should help Microsoft recoup some of that lost revenue.
But it can't quite end there. Xbox Live would also need some advertising to make up for the lost revenue. But by being able to boast that Microsoft has hundreds of millions of users, the company can sell advertising to companies at a rate that could even eclipse the amount of revenue it's already incurring with membership.
Hardware sales
But simply offering Xbox Live online play for free won't just have an impact on Xbox Live revenue, it'll also have a major impact on hardware sales.
Let's face it--opening online play to all Xbox 360 owners will see a huge influx in the number of people that will want to play online. And in the process, they'll start talking and make it clear to all those fence-sitters that they can play with them online without a charge on something that's already proven. Sure, Sony might do the same thing and the Wii is already free, but neither service can contend with Xbox Live in terms of raw users and usability--so far.
Right now, Microsoft needs to increase hardware sales in any way it can. It's not enough anymore to simply wait and hope that Sony won't sell consoles as well as it has or Nintendo will suddenly fold. Instead, it needs to be proactive and try to find ways to stop its competitors in their tracks. And although a price drop was a good place to start, Xbox Live is what Microsoft beats every other vendor on and it needs to make it even more compelling to coax more people to its console.
And if that drop in Xbox Live pricing increases hardware sales--and it should--more developers will jump onboard and exploit Xbox Live as much as possible. And in the process, it'll become a veritable bonanza where you'll be able to buy extra maps, pick up some movies along the way, and enjoy ad-supported online gaming for free.
Making Xbox Live online gaming free is radical, I know. But at this point, Microsoft is starting to look like the also-ran and it's not exploiting the key component in its business model that could separate it from the pack. If Microsoft wants to catch up quickly, making Xbox Live free and changing the way it makes money on the service is the first step.
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Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
With no bias. Sony has acted so arrogantly as a company over the past few years and are really just now waking up due to low hardware sales and software exclusives jumping ship to xbox and the suprising sales of Wii. They EVEN stepped on SQUARE (dropping Hard drive Support after FF11 came out), one of the japaneese companies considerably responsible for their success.
Lets be truthful here. Wii earned its marketshare by offering a different play experience than XB and P3 and they are doing well for that.... But between the two X & PS, can anyone really truthfully say that the only advantage PS has right now isnt a Blu Ray Player. if its ps2 back compatability, i can get an XB and PS2 for the same price as a PS3, then also have XB back compatability. XBL continues to break through in the online department and give gamers more options. if i have to pay 50 for that then so be it... .i can tell you that through my 5 years of being on XL i have not regretted it once....
Sony is a Japanese held Corp and Bill gates is NOT their biggest Stockholder. Idiot.
I tried using the same argument with my power company. They offered to disconnect my service if I really wanted to.
Strangely enough my cell phone provider also wanted me to keep paying them to use their service even though I could easily go to another commercial provider.
WoW isn't asking for much in a monthly fee, but they still ask for it.
I haven't figured it out. How come the world isn't free? Why should I have to pay for a service?
And besides, with hardware costs, ISP costs, software costs, etc., I would hardly feel as if I'm getting away with something for "free." (dastardly snickering)
But, you can be shortsighted if you want to just to stick to the principle that "no one deserves to get a service from a for-profit business for free." I just hope my company doesn't hire you for its business development department!
If every other house in every other state was getting free power from their power company would you still be fine with paying your power company?
If every other phone service company in the world was free, do you really think your cell phone provider would "still want you to pay them to use their service" even though they get fees after selling cell phones?
Bad analogy, dude. Those mall rats "trashing the food court" are usually buying food from said food court, so the malls are getting money from them.
That is the main reason why the parents at White Marsh, Maryland threatened to sue White Marsh Mall if their children couldn't be there without parents: because they ARE usually there buying something, though not the 'big ticket' items they buy with their parents with them.
For the PS3 and the Wii, they do not have a centralized hub (that I'm aware of) to do buddy matching and organize the best possible setups. The Wii only lets you talk to your "buddies", so you just have to match within that list. I believe the PS3 makes each vendor make it's own match making part, so it's not really centralized without all the same features across the board.
Microsoft's LIVE service really does a good job, and I think either having other bonuses for being gold (maybe 10% off all live purchases) would be just as inciting as making gold free. Give real value add to being gold instead of just the core functionality.
That plus let silver play in the non-ranked online games, just lock them from the ranked competitions. Give 'em a little something free to see how much fun it is, and then let them move up if they want to.
Wrong!
I think its you that had better check your facts. Worldwide, XBOX Live dominates both the Wii and PS3 in shere numbers, number of total downloads, number of games played, number of great games available, quality and quantity of content available(including hidef movies, TV etc), and in every way you care to mention.
The Wii online setup is a compelte joke. it does not even begin to compete. XBOX Live is vastly superior to the pathetic Wii online service. The Ps3 is better, but stil behind Live, which is currently the gold standard in console online, and has been for years.
You win.
Our household consists of the 360, Wii, and PS3. Now we are wishing we bought RockBand on PS3 so we can give the 360 the boot!
When you look at the sheer number of games played on Live in Halo 3, COD 4, GTA IV etc, it totally dwarfs anything that the PS3 has. Live is one of the big resaons why people buy the XBOX 360.
People that are unwilling to pay $40............. A YEAR ( biggest bargain in the business imho) would just be a bunch of bandwidth hogs and leeches dragging down the system.
What they really need is a price drop on the 60GB version, that thing is the killer app in this whole business, I love mine. (Once Netflix comes on line it'll become my favorite home appliance ever)
with that said, after several generations of consoles have been cycled through, a lot of gamers have already developed brand loyalty, whether it be to the consoles or the games. ps3 sales taking off was inevitable, as its price was bound to drop. you have the thousands of ps3 advocates who didn't even own the console because it was too expensive, now being able to purchase them as they save up money or just finally caving in to their desires.
what should microsoft do? i don't really know. i do know that if they waived the $50 live fee now, they wouldn't be able to charge an online gaming fee for its future consoles (as easily). but as ps3's online capabilities improve, i wouldn't be surprised if they started to charge a similar fee, and sony will know that they won't turn away that many potential customers if they did so.
I agree with a previous post you have to pay for what you use. You seem to also be forgetting that Sony, and Nintendo are new at the online gaming thing. Honestly I wouldn't be suprised in a year if you saw both of them actually start charging when they see the true cost of keeping the service alive. Not to mention what you are paying for is not only the online access, but also them making your xbox experience better.
I really appreciate you bringing this subject up. I am a long time computer gamer rapidly losing my desire to continually upgrade my system/components to play the latest games. As I evaluate the differences between the PS3 and the 360; a free online gaming option on the 360 would probably make the difference for me. Take it for what it is worth Microsoft.
Best Regards, Jim
Nintendo's online service may be free, but its total rubbish. Its not even on the same planet as XBOX Live which is superior in every way you care to mention. XBOX LIve has been, and remains the gold standard of console online setups.
I'd much rather pay a tiny $40 for the whole year, for the superd XBOX Live service, than waste my time on the pathetic "free" Wii online with stupid games that end in "catz" and "dogz" and other cutsie sounding shovelware.
Plus you can still use Sliver XBOX Live membership for games and video downloads, and pay nothing.
Microsoft has started taking the right steps for the non cote" gamers by bringing in Netflix, Xbox LIVE Primetime, XBOX LIve Party, which are all comming in in a few weeks.
Its much better to charge for XBOX Live Gold membersship, and use that money to slash the prices of the XBOX, than make XBOX Live free and keep charaing high prices for the 360.
After 3 years on the market, $300 for a 360 is simply too high.
After all, the orgiginal XBOX had a price cut from $300 to $200 within 7 months of launching. Today, after 3 years, the 360 Pro is still s selling for higher than the orginal XOX did at launch. hat's just not good enough. Microsoft has been to slow about shrinking chip sizes to 65nm and 45 nm. Last year they shrinked the CPU to 65 nm and still left the GPU at 90 nm. That is just not good enough. The faster you shrink ships, the faster you reduce your costs and the faster you reduce prices. Intel has been making 45 nm chips for over 2 years now, why can't Micrsoft even do a 65 nm chicp for their GPU already?
The PS3 simply doesn't have enough Japanese RPG's, where the 360 currently dominates both the Wii and PS3 in JRP's.
Seriously, you lost all credibility right there and shows that you are the type of person that plays online once or twice a year so of course you would write this kind of article.
I'm sorry but no one would ever consider the Wii's online "basically the same" to XBL and PSN.
And honestly, when people pay for something, they're a little more cautious about the way they act online. Microsoft might not do a great job at policing the environment, but they do suspend/ban TOS violators.
And "deals" cost money. MS is constantly announcing new relationships with service providers. Netflix is the biggest, and that relationship probably cost MS a pretty penny. At the very least, we continue to get more and more for the service we pay for...
I say "keep charging".
- by joelfranke August 18, 2008 1:15 PM PDT
- What about the problems that, for example, the US is already experiencing with limited bandwidth across the board? If -- hypothetically and unrealistically -- 95% of 360's become live-boxes, Microsoft's as-of-right-now-quasi-stable network would be close to crippled. In increasing the number of users of a service, Microsoft will incur further costs related to expanding and maintaining their network infrastructure. While not all of the $50/month might go towards this hardware upkeep, at least a portion of it does. And there's little to no chance that the increased spending on features like the Netflix initiative will make up this loss. How is this a good idea? Microsoft looses revenue (read as "ability to expand and fine tune its existing technology/capabilities"), and Users loose functionality.
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Showing 1 of 3 pages (82 Comments)Even if you only use Live every Saturday for a year, your per day cost is under a dollar a day. My solution: skip the Dunkin' Donuts, pour yourself some cereal, and get your game on.