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Microsoft sees Xbox 360 in driver's seat
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Only accessory makers that get Microsoft's blessing and fork over a slice of their sales to the software maker will be able to produce Xbox 360 game pads, steering wheels, joysticks and other controllers.
In addition, in order to ensure that only authorized products connect to the new console, Microsoft is adding a security mechanism that will be available exclusively to those who sign a deal with the company, according to documents from a peripheral company filed with the SEC. The Xbox 360 console, announced in May, is slated to go on sale this holiday season.
What's new:
Microsoft has introduced a program to get royalties by restricting accessories for its upcoming Xbox 360 update to authorized makers only.
Bottom line:
The program could be part of Microsoft's goal of turning a profit with the console, something it wasn't able to do with the previous Xbox.
With the last Xbox release, Microsoft had a licensing program in which makers of such gadgets could either pay a royalty and display an Xbox logo, or offer the products without paying the fee or using the logo.
The new royalty program could be part of Microsoft's goal of turning a profit with Xbox 360, something the company was not able to do with the prior generation console, said IDC analyst Schelley Olhava.
"Microsoft has made it very clear that it's all about profitability" with this generation of console, Olhava said. "Maybe this is a way they are looking to make additional revenue off of the Xbox." But, she said, the move could also be intended as "a way to ensure quality products make it out the door," reasoning that makers willing to pony up a share of the proceeds would be the kind of companies that make more reliable gear.
Microsoft declined to comment on the royalty structure for the program or outline how it compares with the logo-only program for the original Xbox. "We want to make sure the customers are getting the best experience possible," a company representative told CNET News.com.
According to a contract between Microsoft and Mad Catz Interactive, the software giant will get a share of the wholesale revenue generated by the accessory maker's Xbox add-ons. An edited version of the contract was filed by Mad Catz as part of the company's annual report to the Securities and Exchange Commission. The edited document does not state the percentage cut that Microsoft will get from the accessory sales.
Whatever the royalty figure amounts to, it will come on top of a variety of other revenue sources for Microsoft. These include upfront licensing fees from accessory makers, the money Microsoft gets from selling the console itself and, most importantly, the royalties the company gets from those who sell Xbox 360 games.
The decision to seek royalties from console controllers is not unlike a move Apple Computer made earlier this year, in which it sought to get as much as a 10 percent cut from iPod accessory makers that wanted to display Apple's "Made for iPod" logo. The move was referred to by some analysts as tantamount to a "tax" on the iPod economy.
The Mad Catz agreement, which refers to the Xbox 360 console by its Xenon code name, also hints at the type of security that Microsoft may use to ensure that third parties work with it to produce Xbox 360 add-ons.
"'Security Feature' means Microsoft's proprietary protocol used to validate authentic devices on the Xenon platform as implemented in a Xenon Chip or other implementation method designated by Microsoft in writing," according to the Mad Catz agreement.
Precedent set years ago
Programs that seek royalties from accessory makers are not unprecedented. Indeed, game console makers make most of their money off of similar royalties charged on sales of the game software that runs on their machines. Nintendo pioneered the "Seal of Quality" years ago as a way to nail down game-related revenue. But the moves from Apple and Microsoft appear aimed at expanding the concept.
At the same time, the software maker's move carries some risk, Olhava said, noting that some of the appeal for third parties is the ability to offer controllers cheaper than the official Microsoft-branded accessories.
"There could be less opportunities for third-party peripheral makers, just because the market opportunities may not be there, because they cannot bring out products that are priced low enough," Olhava said.
It's unclear whether Microsoft's licensing plans will affect the market for third-party devices. The Microsoft representative would not say how
See more CNET content tagged:
royalty, Microsoft Xbox, Xbox 360, profit, console
other game device. I don't have any interest or time for games;
there's just too much else to do that's more interesting or
profitable one way or another.
But, MS is sure trying to set up a massive golden goose with the
Xbox, especially now that MS is fixing it so only accessories from
which MS gets a cut will work on the Xbox. It's almost a wonder
that MS did not install a quarter slide on the Xbox like on arcade
games.
Anyhow, for those gamers in the know...
1. How easy will MS's 'key' requirements be to hack?
2. Will it be worth the effort to hack, if it can be done?
3. Does the PS2 play the same restrictions game on accessories?
Just curious....
Yes, MS's code will be easy to crack.
Yes, MS's OS will be easy to hack and manipulate.
Yes, the system will be easy to create other OS's for. (and since it runs on the PPC architecture, a Native version of OS X will be made by someone, I'm sure.)
The old XBox has been hacked and modded and converted to other things, like mine. MS just plain sucks. The good thing they've ever made (the XBox) is easy to make better, whether they like it or not.
The current Xbox is vulnerable to "Soft-modding" whereby an unchecked buffer flaw in savegame code is exploited to get unauthorized software onto the system. But in order to do that, you have to use a device such as an Action Replay to load the exploit on to the Xbox in the first place.
In the Xbox 360 world, devices like Action Replay will most likely be carefully controlled by Microsoft to make sure they can't be used for similar purposes. This technology will give them the teeth they need to enforce their controls.
I don't think this can be a good thing for gamers.
What people need to realize is that Microsoft has always thought of hardware as a comodity. They have always felt that hardware was not important, only their OS matters.
Now all of a sudden, they think that hardware is important and should cost more money. Yeah, when they are in control.
The other thing that people need to take notice of is that this IS how their trusted computing will work. They will make it so that hardware manufacturers have to pay them money for the hardware to work in, oh I don't know, Vista.
Microsoft is testing the waters with the XBox 360 to see if they can get away with this. I will sit back and watch the train wreck.
This isn't about money, it is about control.
The hardware companies said "Screw you" and release drivers all the time without Microsoft "approval."
MS really is too big for its britches.
Microsoft wants to completely control EVERY aspect of the "digital-world" and be able to DEMAND perpetual-payment for EVERYTHING that you use a computer for (Bill Gates HAS said this for years).
And, Microsoft wants to be able to throw ANYONE that opposes that "...vision", in jail (look at their use of the "DMCA").
If "Trusted Computing", "MS-DRM", and the current, FLAGRANT, abuse of "Copyright", is allowed to march-on, ...EVERY COMPUTER soon will be a, COMPLETELY-CONTROLLED, TRACKED, and PERPETUALLY-BILLED-FOR, "Microsoft PC".
And... it IS ALL happening right now.
And I meant only. Apple is in bed with Microsoft. Apple and Microsoft = Duopoly. That is exactly how they want to keep it.
At least this way only hardware that is certified can go into the machine so it shouldn't crap it out.
As for the modding argument. I have an Xbox and I have it modded. If I mod the machine to make it to things that the manufacturer don't sanction then I don't really care if the MS won't support me or let me go onto Xbox Live. I know that before I mod it and that's fine by me. If I can get around it I will but I would expect them to try and stop me.
An analogy would be the IT environments of many companies. We have servers that are really important (to us). We will let you put your PC on the LAN if it's one we've installed because we know what's in it and we've tested that combination of hardware and softwre. We won't let you put your home laptop on the LAN because we don't know what's on it, we don't know what problems it has and we really don't have the time or money to troubleshoot your hacked OS or your dodgy drivers or your viruses.
...The "MS-Windows OS" has never really been all that stable, OR secure, ...on ANY equipment, or in ANY standard-configuration.
...It will NOT be the owner/administrator, that decides what equipment, or use, IS or IS NOT allowed.
...It will, in fact, be Microsoft, a REPEATEDLY-CONVICTED "illegal-monopoly", which will be able to pull ALL the strings in the computer-industry.
...Additionally, Microsoft, IS NOT merely refusing to "support" such "modifications" (I.E. non-Microsoft-approved USE or equipment). Microsoft is actually trying to make ALL consumer-choice, or "un-approved" use, ...IMPOSSIBLE, ...or even (as is their apparent ultimate-goal) ...ILLEGAL.
...Therefore, this has NOTHING to do with limiting "support-problems". And, Microsoft is clearly NOT doing this to improve operability. Microsoft IS obviously doing this for one reason, ...to create an environment where EVERYBODY (users, consumers, and competing technology-companies) have to pay Microsoft (and ask Microsofts permission) simply to use, or produce, ANY computer-technology.
In essence this would create a TAX, paid directly to Microsoft, levied against virtually the entire computer-industry.
Even if this was only applied to the "X-Box game-console" (hardly likely), it sets a dangerous precedent against "consumer ownership-rights" and the entire third-party, after-market, "add-ons" industry.
So, in my opinion, ...YES, this approach, especially if expanded to all PCs (based upon an entire history of Microsoft products, policies and conduct) WOULD be a VERY BAD IDEA, ...for you, ...for me, ...and for the future of computer-technology in general.
(Hint : NEVER)
Bad business model.
I have a real problem with taking this Trusted Computing with DRM and expanding it into the PC. This is not a good thing. I ran across this a couple months ago and just recently decided to learn more about it. Read this article if your interested: http://www.againsttcpa.com/tcpa-faq-en.html
If you look at where their going with Win Vista, it is not a good thing. You have all your documents under MS Word and you want to transport them over to WordPerfect, well guess what MS can lock your Documents out since with the new Trusted Computing scheme they have encryption attached to it.
In response to this I just downloaded some LiveCD/DVD linux distros: SimplyMepis, SUSE Linux Pro 9.3 and Ubuntu. So far I like them, but am still very new to Linux and it looks pretty good so far (I'm online right now writing this with LiveCD-SimplyMEPIS).
I have 3 desktops (2 new ones) and one laptop all with WinXP Pro. I have a 24" Sony Widescreen CRT (LCD's to me don't look good enough yet) As long as I can get my laptop's 802.11a to work I will be dual booting 2 or three of my computers.
Wtih Windoes Vista I'll have to buy a new monitor with the HDMI and the HDCP (security) function built in or you won't be able to fully utilize the monitor. Same goes for all the Plasms's and LCD Tv's people have bought through the years. When the new HD-DVD's or Blue-Rays come out you won't be able to play them like you'd want to.
This Trusted Computing on PC's from what I've read will be taken to far. Only problem is looks like both AMD and Intel are in on this.
Enough ranting a raving.
I am tired of computers having frequent problems. It got bad enough that I dumped all my individually "superior" devices and just bought a Dell. I think it is too much to ask Microsoft to make an OS that runs on millions of different hardware configurations, millions of different software configurations and then expect it to flawlessly. I am ok if Dell is the only hardware vendor. I am ok if Microsoft has to bless every peripheral. And if they charge some premium for it, then I'm ok with that as well.
from iPod add-on manufacturers, but I don't believe that Apple
prevents anyone's add-on device from working. That's a MS trick.
After all, Microsoft must have learned its lesson when they were found to have violated anti-trust laws, to create and maintain their illegal-monopoly. Microsoft, surely changed its ways when every court upheld the convictions. Microsoft must have realized that they needed to change their behavior, when even the Supreme-Court refused their last appeal. Why, Microsoft could hardly have missed the importance of the Whitehouse needing to order the DOD to, basically, drop the case, after Microsoft had already lost. After all, who knows what might have happened if Microsoft had been held accountable for their actions.
And, all of this must be especially evident to Microsoft, now that, there are so many other legal-matters, and business-problems, closing-in on them.
So, it is really not fair to keep attacking Microsoft, simply for trying to make the computer-world safe for their own corporate-profits, the whims of media-giants, and possibly furthering the numerous business and political agendas, aimed specifically at eventually being able to track and control virtually all privately-owned computers.
Its just good business on Microsofts part. And, the X-Box is really just a great way to test the waters, and prepare consumers for the future that Microsoft has planned.
So, everybody, should just leave Microsoft alone.
I'm going to laugh when they bust down yoru door one day because you streamed a TV show to your livingroom, kill your family and arrest you then burn down the house. Then they'll throw you in a dark hole whilst rapists and murderers get 3 squares a day.
YAY! GO MICROSOFT! gimme a break.
- Microsoft is a company...
- by Mendz August 11, 2005 8:27 PM PDT
- ... that means they're in business. So if they want to profit from this and that, if it's legal, then you can't really do anything about it. To Microsoft, it's legal and profitable. So watch and learn.
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