unforum

[Nola]

[Xbox] Could Xbox Live be a monopoly?

[INCyr]

I dont' think so. I think it'd be a monopoly if it was the ONLY online gaming system out there, but as it stands, the PS2 offers online gaming (I'm saying nothing about quality), and obviously there is PC online gaming.

Because the XBox is entirely MS owned, I don't think that offering a service for it can be a monopoly. Just like not letting anyone else make the XBox itself isn't considered a monopoly.

But then again, IANAL.

[Nola]

An argument could be made in the context of the IE litigation... IE was not the only browser available, nor a PC the only choice for accessing the internet, yet it was still deemed a monoplistic practice. I'm sure an opportunistic lawyer could make a few settlement bucks with this...

[INCyr]

Yes, but then MS was pursuing other companies making those browsers and engaging in harmful buisness practices designed to put those companies out of business.

Currently MS isn't going after the PS online gaming system in such a way as to try and drive it out of business. Nor is it going after PC gaming in a similar way. Sure, it might be winning the war, but that's only because game makers (read: Bungie) are making better games for XBL than they are for the PS2's online system. Plus, the PS2's system requires an additional purchase to get the adaptor, while XBL only requires the purchase of the subscription, and you often get 2 free months to lure you in.

Nah, I see no comparison to the IE/Netscape wars of the late 90's here.

[Dasro_Kast]

I guess the technical difference would be that xbox live is the actual mechanism that xbox uses to connect to different users, through the internet. Microsoft technically doesn't stop any company from designing an online tool, as EA as done, microsoft simply provides the servers, and a set of groundrules, along with policing services, and a coherent universal name tracking system. I would argue that one couldn't sue microsoft for forcing companies to use the xbox live structure any more than one could sue Blizzard for forcing players to play on Battle.net.

[SuperJerms]

Long post ahead, but it is rife with information and analysis.

The difference between IE and Live! is that IE was affecting a seperate product (windows) by being bundled and integrated into the shell. In practice, this made a disadvantage for Windows users not using IE and companies not making IE. Monopoly is less about competitor interests than it is about customer interest, so the fact that IE was intentionally being integrated as an anti-competitive measure made it a target. The Live brand has always been integrated into Xbox, so it is no more susceptable to competition than the rest of the componets (such as graphics chips, cases, etc.). Then, Live! becomes proprietary code instead of an open-market product, in the same way that Blizzard's B.net is actually integrated into thier games and is thusly protected by proprietary laws.

And then there's the problem with Live that this is an online service, which might bring it under the umbrella of the FCC instead of the SEC in the case of a complaint. FCC is decidedly laissez-faire in the last couple of decades, and the consumer victory in policy issues is very rare. Being that this is a game service, not a tool of democracy, you will not see the FCC worrying about preserving competition (not that they would even if they should...when it comes to the FCC, only the biggest corporations win).

As I understand it, Sony's online strategy has been more of an after-thought, with them focusing instead on getting into markets first and securing exclusive rights to popular franchises (i.e. EA Sports, Metal Gear, Final Fantasy, Ratchet & Clank, SOCOM, etc). As such, they left online implentation to the game developers, providing the possibility of connectivity instead of full-scale integration. The result is more true competition (to my knowledge, most of PS2's online content is totally free with the exception of rare individual game subscriptions, like FFOnline) but much less content (there is no killer app for PS2 Online).


You could look at the economic situation in a couple of ways. The industry mainly sees this as a Sony vs. MS issue, where competition drives improvement by pitting the PS2 vs. the XBox for which system people will buy. MS wins in the online category because it is a central element of thier overall strategy. The problem with this breakdown is that PS2 and Gamecube are not really playing that game. Really, the three companies are looking at three different main clients.

Specifically, XBox sees those interested in online multiplayer as vital, Sony is looking at those who aren't into the online thing yet. The understanding is that, compared to the entire video game market, the amount of those who will buy more than one game system is fairly small. Sony is going after the biggest section of the market, and that section is not too worried about onlne content. Online gaming has only gotten to be a big deal since high-speed internet spread, and that's really only happened on a wider scale in the last three years or so. In the next generation of systems due out next year, online gaming will be a much bigger deal. MS is ahead of the game by establishing Live! before the next generation makes the business explode. Even MS wasn't that far ahead of the curve. H2, MechAssault and Splinter Cell 2 are making Live pick up the pace, but remember that H1 wasn't online-ready. Coming soon, Live!'s sports leagues are going to seal the deal. Sony will be running to catch up. Really, that's been the MS plan all along...lose money up front, beat the other systems at every possible milestone, gain it back in the long-run when the competition is dead.

The other way of looking at it would be to think about how game developers vs. game developers within each game system (Xbox game 1 vs. Xbox game 2, or PS2 game 1 vs. PS2 game 2). MS offers an established, successful, brand-driven (Live! tm) online package, but it will cost in flexibility and sharing the profits. MS works to promote the brand, offers gamers who want online content (and may soon demand it), and has geared everything in the Xbox towards integration with online content. XBox gamers value online content, so a game with online content is more likely to sell than one without. Online content for the 'box will be better than online content for the PS2. Developers need only to plug thier game into the Live! system, so they don't have to reinvent the network code wheel. Those who play Live! games are actually paying customers, so they are more emotionally invested in the game and are likely to spread the word and play for longer hours. Negatively, XBoxer's will balk at paying for content because they already pay for Live! Still, PS2 doesn't have a system for purchasing new content, for billing, or for rule enforcement.

PS2 developers have an open market: no rules from MS, no surcharges. Unlike Xbox developers, PS2 devs don't have to compete against the game system itself when asking for money from customers. The system is more like what exists in the PC world of gaming. Negatively, developers are working with more dated hardware overall, the PS2 gamer demographic does not demand online gaming, the PS2 doesn't have built-in hardware, and nobody is out there promoting online games for PS2. If you want online code, you write online code. If you want to bill for services, you write billing code. Unless you make a piece of software that grabs consumers by the throat and demands that they get a modem and jump online, there just isn't a lot of cash in the PS2 online market.

In the end, MS has a stable of 150+ Live! titles that get regular pay, and Live! has a bunch of subscriptions (no doubt boosted by new additions with H2). PS2 has quite a few online titles, but none really stand out aside from Final Fantasy Online (which carries a steep price tag for first-timers...you must get a modem and a hard drive to play!). In the short run, this is fine for Sony. Online play is only now becoming a big deal, and the next generation of hardware is due out soon. In the long run, MS is poised to overtake the market assuming online gaming starts generating steam.

In both cases, it's hard to say what would be best for consumers. Xbox games are regulated by MS, and regulation carries costs and limitations. PS2 games are unfettered, but developers seem to be lacking intrinsic motivation. Theoretically, PS2 is more fertile ground...but there's not much cultivation. Xbox seems to have a Miracle Grow effect with MS putting serious cash into the Live! brand, but we already know how that story can end by looking at the iron fist with which the world of Windows runs.


Yep, that about sums it up. Soo....long post. But rich with fiber!

[Nola]

For the sake of argument... if I wanted to offer an online gaming arena for Xbox that only charged $3 a month (or even free), without the need to go through my PC... MS would be OK with it and let the market forces decide if I could gain some market share?

[SuperJerms]

Well, I think I remember a rant at Penny Arcade some time ago where Tycho was talking about Electronic Arts doing just that. I'm not 100% on that, though.

If I recall, they had a competing service, but it was totally removed from Live! (and was far inferior because they didn't have the full software integration, matchmaking capabilities, and server strength that Live! has).

EDIT: Found it. one, one-and-a-half, and two. When the SEC worries about monopoly, though, it's more than if a company can release a product...it's a question of if that product can actually compete in a meaningful way. Still, the above stuff stands, MS doesn't have to play any games with their proprietary code. If devs don't want to play by MS's rules, they can take the ball and go home.