In the last couple of weeks there’s been no new information on the Playstation 4, nothing about the new Xbox, and little from Nintendo. There have been some changes on the portable front, as Sony introduced a substantial price cut on the PS Vita in Japan. The main frustration for a lot of people in the last week or two has been the new DRM issues that are showing up with the recent release of SimCity.
So first, let’s touch on the price drop of the PS Vita, this was a marketing move by Sony to try and increase sales in Japan, where they have so far been relatively stagnant. Sony chose to drop the price from 30,000 yen for the 3G version and 25,000 yen for the Wi-Fi only version to 19,980 yen for both versions, a substantial change of about 33%, and has since reported sales increases of 400% (with some estimating the actual figure to be 600%), hopefully still making a profit from the units they are selling. Nintendo followed a similar pattern for the Nintendo 3DS, which retailed for $250 before the price was slashed to $170, resulting in increased sales. In both of these cases, the companies involved have realized that their technology was not worth the price from the public perspective. Unfortunately, this stated price versus acceptable purchase price is an issue that has plagued the hardware industry for many years. When a new console or portable system is released the manufacturer is normally looking to make profits off of the system for eight to ten years, but they will likely only make money off of the system itself late through its project life cycle. In order to make the system last for the projected lifespan, the manufacturer has to future-proof by implementing the best technology they possibly can into the system so that it will not be out of date the moment it hits store shelves. This does have a drawback: if you are putting in top of the line technology, you are going to have to pay the inflated price for that technology. If the company is lucky, they can reduce the costs of manufacture over time, start to actually make a profit off the system, and offer price cuts to the purchase price to stay competitive. If the company is unable to reduce costs of manufacturing over time they may never reach a profitable price because they have to keep offering discounts to remain competitive with their competition. This is the problem that Microsoft ran into with the original Xbox. Despite the system being built using off-the-shelf computer parts, it did not own the intellectual property of any of those parts. This prevented them from changing manufacturing processes, changing chipsets, improving efficiency, and many other cost savings methods. They also had to keep paying the manufacturers of each of the parts the same price. These problems led to the price of manufacturing an Xbox constant, while price was reduced.
With the Xbox 360, Microsoft designed their own system entirely, and since its release there have been numerous revisions such as the Xbox 360 S. While the S was a complete hardware revision, there had actually been many subtle changes over time that would only be noticeable if you actually compared a Launch system versus a Zenon system (one of the last before the S was released). The number of USB ports increased, HDMI output was added, and the processor was changed every time to make it smaller, faster, and more efficient. This change over time led to the elimination of the overheating issues that plagued the original system. Sony likely had a similar advancement throughout the PS3’s life cycle. The most well-known were ones that caused complaints among owners, namely the removal of the hardware module allowing PS2 games to be run on the PS3. The cell architecture used in the PS3 has also led to difficulties in price reductions and game development. It’s more complicated to build, there are fewer people researching ways to improve it, and its harder for people to program. No wonder Sony is abandoning it for the PS4.
At this point in their life cycles, both the Xbox 360 and PS3 are still very good systems from a technological standpoint: if you were to buy a computer with similar system specifications you would pay a lot more than $200. So how much do you think a brand new system is going to cost? There is no way that Microsoft or Sony will attempt to price their next gen systems anywhere close to the $800 launch price of the PS3 – that was just insane. But they will need to price it high enough that they aren’t losing an unrecoverable amount on each sale, and to give themselves enough room for price cuts in the future.
Now, on to Digital Rights Management (DRM), the bane of many gamers’ existence. DRM was heralded by developers as the final solution to piracy in the gaming industry, by tying a game license to a specific user or machine. The simplest DRM is an activation code, which may or may not have multiple uses. This can be frustrating for gamers as a computer failure may require a reinstall that is then blocked by the access code having already been redeemed. The next level is using an access code to tie content or permissions to run a game to a specific account. The benefit of this system is that a company can sell a new activation code separately. Newer systems, which have been getting the most flak from the public, rely on a continuous connection to the publisher’s network to validate the license. This can be absolutely maddening to people with a poor internet connection or to everybody if the publisher’s servers are the issue. That is the problem that is hitting EA right now with SimCity – people have been abandoning the game as long login times prevent them from even playing. With all of these issues, EA released a statement stating that anybody could request a refund if they felt they had not been provided with the product they were promised, but it appears they also modified their return policy at the same time. The end result is that people trying to redeem that refund policy are being denied. Not cool, EA.
Other developers have reported that they will not be using DRM in future games, because in many cases it causes more problems than it actually solves. In many cases, the only people that are actually affected are those who legitimately purchase the game but then suffer from the issues described, the people who actually want to pirate the game can easily get around the added security. The issue then shifts from the sales lost to piracy to the sales lost by avoidance of the DRM problems. Another perception of publishers that often comes up is the idea that every case of piracy is a lost sale. Yet if a person wants the game, they are more likely to buy the game than to purposely pirate it. If the person is casually interested in the game but would never consider actually buying it then they may pirate it as a curiosity. Some of those people may still never purchase the game, but some may actually decide to buy it. Piracy does not result in lost sales, in fact, it may increase sales. I will never say that piracy is an acceptable practice, but I have found a number of games that I purchased many years ago that no longer work on my current operating system that I have downloaded for nostalgic purposes and still love to play. Now, it appears that Age of Empires 2 is going to be released on Steam! Am I going to buy it or continue with a pirated copy? Of course I will buy it, since it is supposed to support Steam’s Workshop system, allowing the public to create mods and additions to the game.
That is where I think publishers need to focus to combat piracy, by making the game worth buying through their continued support and advancement. If a company is continuously creating new content, or allowing the public to create new content, then people will actually want to buy the game and they will be more likely to keep the game rather than selling it. Downloadable content is a great way to encourage this, but it actually needs to be a quality product that adds to the game experience rather than something tacked on for an hour or two of diversion for $20. Another potential improvement is by actually making demos a good representation of the finished game, rather than being a specific level that either tricks people into buying the game, or drives them away from a game they would actually enjoy.
So that is my rant for this week, keep an eye out for news about the Playstation 4, the next Xbox, and I hope anybody who got burned by SimCity is having some measure of success with getting a refund. Until next issue – Keep on Gaming.
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