XBox 720 Rumors and Concerns – A Case Study on How to Lose a Lifelong Customer

I am a huge fan of the Xbox. I remember vividly when my friend Ginny bought me the original Xbox as one of the best Christmas presents I’ve ever received. I’ve continued my loyalty to the second generation Xbox  360. In fact, so far I’ve bought three Xbox 360’s. This happened even after I got the Red Ring of Death (RROD) on the initial purchase.

Although nothing has been officially announced, there are some very concerning rumors that Microsoft isn’t addressing that could lead me to ultimately switching allegiance to the PlayStation 4…. These include a requirement that all games have to be installed on the hard drive in order to be played, an always-on internet connection that is required in order to use the device, no backwards compatibility for games, and the  use of Digital Rights Management (DRM), which could block the use of used games or make the user pay an additional fee. I’ll address each of these and why they are a bad deal for consumers and how Microsoft may lose a lifelong consumer.

Mandatory Installation of Games

While this isn’t a huge deal, it could potentially be a pain for the User and cause a negative User Experience. The rumor is that anytime a user loads a disk into the new Xbox, the machine will automatically install the game onto the hard drive. Unless the Xbox 720 ships with a massive hard-drive  this has the potential to cause the User a lot of work maintaining which games are installed on the console and actively managing this. Again, not a huge deal, but depending on how it is implemented, it could be a negative for the new Xbox.

Verdict – Wait and See how it’s implemented before making a determination. Potential negative against the new console.

Always-on Internet Connection Required

This rumored requirement absolutely baffles me. Why does a video game system need to have an active internet connection if I want to play a single player game. This is as logical as my toaster requiring an active internet connection. I’m sure Sunbeam would love that because they could send ads my way, but as a consumer, this is a really bad deal. I don’t know what the advantage is from Microsoft’s perspective….. They only need to look as far as Electronic Arts and how their recent Simcity launch went. For those who are unfamiliar, Simcity is a computer game that required an always on internet connection. When the game launched, the servers were overwhelmed on opening weekend to the tune of 90% of the players couldn’t play the game. This helped solidify Electronic Arts as Worst Company of the Year by Consumerist for the second straight year.

This rumor has some juice behind it because one of the creative directors from Microsoft posted the below image to Twitter. It’s disturbing to see how out of touch with the common person he is. I spend a decent amount of weekends in Charleston, WV (District 12), and the internet there is slow and spotty at best. It seems nearly every weekend there is a time when it slows to a crawl or goes out completely. This would render the new Xbox as a very very expensive paperweight and is a huge negative.

Orth Twitter conversation

Verdict – Potential Deal Breaker and a raw deal for end users. 

Lack of Backwards Compatibility

There are certain games that are just fun. These are the games that don’t need amazing graphics, but rather work because of a unique design or an infinite amount of replay-ability and fun. I have several games like that this that I keep around. Some examples are Civilization Revolution, XCom Enemy Unknown, You Don’t Know Jack, Monopoly Streets. etc.

It would be unfortunate not to be able to play these on the new console. The only option I would have if I want to play these games in the future would be to keep the XBox 360 around, which seems unnecessary.

Verdict – Disappointing and is a strike against the new console

DRM & Blocking the Usage of Used Games

Digital Rights Management is a really bad deal for everyone involved except the company implementing it. This is because the company holds full control over whatever the consumer bought. Think back to when Apple had DRM on the songs that were sold and they would only work on a certain amount of computers or Apple Devices…. It wasn’t a good deal.

The rumor on the Xbox 720 is that Microsoft will limit the ability to play used games, perhaps by making the new owner pay a fee in order to play or only allow the game to be registered to one console.

This is an absolute deal-breaker and here’s why. A new game costs me $60 dollars. Once I’m done with the game or I buy something new that occupies my time, I sell the game on Ebay or back to Amazon for anywhere from $10-30 dollars. This brings my total cost of ownership to $30-50 dollars a game. Removing the ability to sell something I own not only violates the first sale doctrine (I’ll let the lawyers battle that out), but makes the games more expensive than I’m willing to pay.

In my opinion, playing used games allows people to play games they normally wouldn’t play due to cost. I’m not going to throw down $60 on an unknown. Buying used is how I found Bioshock and Borderlands. By buying used, I was able to find games that were a lot of fun and led me to buy the sequels new when they came out, creating a longterm customer for the development studio in the process. This opportunity would never exist if I had to pay $60 for every game or an additional $10-15 dollars to Microsoft in order to try a used game. The concern is what if it ends up being something like Homefront or MLB2K12 that is just horrible. Now I’m out $60 if I buy new or some undisclosed amount to Microsoft with a no recourse.

Verdict – Absolute Deal-breaker

In summary, the rumors bring more caution than excitement and it’s unfortunate that Microsoft has done nothing to squash or validate any of them. As a consumer, it leaves a bad taste in my mouth and has me contemplating the move to the Sony Playstation 4. Not a good way to launch a new console.

If you have any thoughts on the new XBox or wish to discuss any of the rumors above, please feel free to drop a note in the comments below.


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