Avengers, assemble! Marc N. Kleinhenz has summoned several leading voices from GameXplain, TotalPlayStation, and IGN to tackle one of the surprisingly biggest hot-button issues currently facing the industry: Microsoft announcing on August 30th that it is increasing the price of its superlative Xbox Live online service. Is it a mistake or simply inexorable? See the debate, with warts and all…
Marc N. Kleinhenz, TotalPlayStation features editor:
Almost exactly on its eighth birthday, Xbox Live will cost $60 per year.
While I certainly don't think this is a rip-off – between Xbox Live Arcade, the Game (and Video) Marketplace, Netflix, Facebook, and Last.fm, it’s still a really good deal, and now in line with current-gen pricing of software – I can't help but think of Microsoft's press conference, when they said that the addition of ESPN wouldn't change the pricing structure one iota.
Sir Gordon Wheelmeier, gaming guru:
I think this comes down to very simple timing. Microsoft is spending a lot of money supporting Xbox Live, and doing a generally great job of it. That costs money, and the more Microsoft can charge, the more they can afford to invest.
Enter PlayStation Plus. Whether or not it was smart to do so, I'd bet that Microsoft saw it as an opportunity to introduce the price increase and sort of slip it in with all of the new online costs and options being talked about for the PS3. As long as the PlayStation Network remained 100% cost-free, Microsoft didn't have a "free" opportunity to go above $50. They got that chance, so they took it.
Ryan Green, TotalPlayStation senior editor:
I have to argue against the very idea that Xbox Live Gold is a deal at any price, given how ad-ridden their interface is. Justify to me how "The New Xbox Experience" really enhanced the lives of the user and not just advertisers. Far be it from me to be aligned with the grossly entitled gamer, but I feel like paying for a service should negate advertising for the end user. It is insulting to me, as a gamer, when such a big company increases the price of their already-successful service without telling us why.
I won't go as far to say it is a mistake for Microsoft, mostly because it isn't. The people willing to buy into the service will groan as much as MTA users in New York after hearing about a price hike. But what is the public going to do about it? Not use the subways? Xbots won't suddenly pick up a new system and throw away their achievements and "friends" just to go over to the PS3 for gaming. Even if Sony had a truly comparable experience on the PlayStation Network, it isn't a viable alternative for protesting the price increase.
Enter the trend of jacking up the price on digital content. Remember when the standard was $10 for a great game? That was before your expensive shooter map packs and HD retro-inspired new IPs. Business and economics aside, there aren't enough people to stand their ground and not cross over this rickety media bridge, and they are only going to push the limit while removing more features in the name of profit. Good for Microsoft, bad for the community. If your ads aren't making you money, then pull the ads and charge more for your service.
Sony has brought the alternative to fund their slowly developing network. They might be a generation behind in cultivating a persistent online community, but they have made some different choices (for better or worse) that have brought a generous amount of content for free. Instead of losing game features, like multiplayer or using voice chat, you can do that for free. Major titles like Bad Company 2, Killzone 2, and Street Fighter 4 all run very well over the "inferior" gaming network. Sony chose to make their money from true fans, not just COD-heads and Madden-bros, by selling Qore, Home, and the newly-launched PlayStation Plus. I suspect that Sony has been losing money on PSN for some time, like it has been on PS3 hardware sales since launch, but they seem to have a different philosophy than Microsoft. They are building the brand by creating a relationship of trust, which is something you can't easily admit about Microsoft. Some companies forget that total profitability isn't the only way to run a business well.
But, yes, good for them for raising the price on XBL Gold. I'm sure they will bring more 1 vs. 100...
Micah Seff, GameXplain Co-Founder:
Wow, Ryan. Not too much to say on this topic there, eh? It's actually hard to follow such an emphatic response, since I don't really have as strong of an opinion. Sure, I hate NXE as much as the next anti-establishment loser, but I can't really fault Microsoft for desperately scrambling to make its service beneficial to both the company itself and gamers alike. Ads are an unfortunate side effect of online business models. How many of us would even have jobs if ads weren't generating revenue for sites like this? While I hate having to dig through the ads to get to the real content on NXE, I long ago gave up being upset over the whole situation.
Personally, I won't really notice the $10 price hike all that much. I feel like it’s still worthwhile for me to be able to get the most out of the games that I play, and as someone who spends the majority of his time playing games on the Xbox 360 these days, I can safely say that I'm not gonna stop paying for Live anytime soon.
What I would like to see with this rate hike is some benefit for gamers the first time they pay the increased price. Whether this be a free XBLA game, a voucher for a downloadable Xbox 360 game, or just some Microsoft points, It would have been nice to at least acknowledge that paying for Live does eat into lots of gamers' gaming budgets. I think something like this would have gone a long way towards (as Ryan put it) "building a brand by creating a relationship of trust."
Oh, and I'm gonna second the complaints about the severe lack of 1 vs. 100. I played this game every day it was on last season and loved the hell out of it. Why can't I get myself more Chris Cashman love?
Andre Segers, GameXplain Co-Founder:
I disagree with the notion that Microsoft “owes” us a reason for increasing the price. Does Disneyland owe their customers a reason when they raise their price annually? If anything, I feel like we’ve been fortunate that Xbox Live has maintained a stable price for nearly an entire decade, being as the $10 increase is barely enough to cover the cost of inflation since the service’s release in 2003. If they made a mistake, it’s that they didn’t decide to do this sooner, except with smaller increments instead of all at once.
Also, of all my complaints regarding NXE, the ads are at the bottom of my list; they’re relatively non-intrusive, and I find them easily ignorable. Do you feel the same for television? You’re paying for a service that comes complete with very intrusive ads every 10 minutes. It’s not like this is unprecedented – even the Hulu subscription plan includes (again, intrusive) ads.
But despite all of the bitching among gamers, as long anyone who complains continues to pay for the service, then it would seem there’s not much basis for the argument that Microsoft is charging “too much money.” Would I prefer it to be free? Sure, but I also wish that were the case for my house, motorcycle, and girlfriend.
Ryan Green, TotalPlayStation senior editor:
I'm glad I stirred the pot a bit, even if I had to put on my "radical jerkwad" hat and sacrifice my doe-like image. (Did I ever have that?)
Most of my complaints come from me as a non-Gold member. I know what is out there, and I'd like to be involved, but I'm not willing to pay extra to play on Xbox Live when I can get the same online experience with the same AAA games on PSN or even – gasp – PC. Do you know how many bucks a month I pay for StarCraft 2? Zero-point-zero-zero.
But I may have misspoke to lead Andre to believe that Microsoft owes us something. They don't strictly because they are a business, and I understand they are here to make money and pollute our environment, like Nintendo does (according to Green Peace). However, gamers need to recognize that there is an increase and they need to determine if it is worth it, at $10 more a year, to play on Live. With all of these extra features that make your system more media-centric, I wonder how many Halo players actually use Last.fm on a monthly basis. How much does your subscription go towards the lesser-used features? PlayStation Plus makes more sense to me for things like that. I agree with Rus that it – and will always – comes down to what the user sees as more valuable.
For the record, I don't have PlayStation Plus, either.
The only reoccurring fee I have incurred for more than a year was World of Warcraft. Not GameFly, not even Netflix. WoW. And I'll be damned if I didn't get my money's worth every month. With WoW, you know what you are getting out of your subscription, because there are a lot of moving parts and new coats of paint splattered on all the time. But, WoW, like XBL, isn't for everyone. I feel like Microsoft is getting to a point where they could do the right thing and segment their audience into Silver (free), Gold (multiplayer only), and Platinum (for those sorry fools that need every single feature). They could then charge for multiplayer-only players and still turn a profit, and even rope in players that don't want the entire, expensive package. With a title like “Platinum status,” people will pay a lot for a return of a little.
It seems like the deliciously evil thing to do, so I wonder why they haven't done it yet. I guess if this price hike – or another – will result in a drop of membership.
Oh, and feel free to ignore my 12-page rants on this. Marc, you could easily edit my existence out ;)
Rus McLaughlin, IGN columnist:
Agitate, Ryan... agitate, agitate.
It turns out when I replied earlier, I didn't Reply To All because I've apparently never used this internets thing before, so at the risk of repeating myself (and so you'll know what Ryan is talking about when he's talking about what I'm talking about):
I actually turned in a column a month ago (which hasn't posted yet, and is now out of date) on paying extra for online gaming, and my research turned up that MS pulled in around $600 million in Gold memberships alone in the last year. With Plus making its debut, raising the price now just makes sense; it doesn't put them too far ahead of what the competition is now charging. A 20% increase raises their profits to $720 million a year, and no corporation in its right mind will say no to it if they think that the market will bear it.
And it will. It's completely ingrained in Xbox-gaming mentality that you pay to play online, period. An extra ten bucks a year – for those who don't find discounts online, of which there are plenty – is annoying and will earn a round of griping, but in the end of the day we're only talking an extra ten bucks a year... far from a deal-breaker. It's just the price of admission. Considering how happy MS gamers are with the service overall, I doubt most even expect more for their money. If MS tosses them a little steak – free Geometry Wars 2, or something similar – just to smooth out the bumps, the customers will be deliriously happy.
Calling Plus a better deal than Live is a bit dubious. It's a better deal if you want what it offers. If you just want to play online multiplayer on a PS3, it's not a deal. It's how you charge for online when you, as a company, have repeatedly claimed you'll never charge for online. It's also asking Sony players to pay for something they've never had to pay for... the same Sony fans who've long ridiculed Xbots for shelling out cash for Live. They get more as a whole for what they pay, but are those extra features on their own – since that's all you're actually paying for – really worth $50 a year, particularly since you lose most of them the second your subscription lapses? That's far more ambiguous than Live's clear-cut service for a clear-cut price.
And, honestly, I'm expecting all those free PSN features to, at some point, fold into the for-pay Plus services.
Has anyone seen any hard data on how well Plus is/isn't doing? I'm thinking it can't be as great as all that, or Sony would've bragged up the membership numbers by now.
Marc N. Kleinhenz, TotalPlayStation features editor:
Just to be a complete jerk to Andre: Xbox Live debuted on November 15, 2002, not in 2003.
(And, yes, I'm such a nerd, I knew that off the top of my head [that's what I get for working at GameStop during XBL launch, I suppose].)
I think Plus is an almost completely useless endeavor. By this time next year, the service will be either substantially different – such as folding a number of now-free services into it, as Mr. McLaughlin suggests – or gone.
Such is the future of a Sony project.
Marc N. Kleinhenz is features editor at TotalPlayStation.com, as well as a freelance videographer. His latest fiction, a 12-page experimental webcomic entitled Immaterial Material Culture, can be found here.
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