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Karlsfsn Blog

Xbox Live - A Broken Business Model

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With the announcement of the PS4, it's hard not to speculate what Microsoft may have up it's sleeve with the next iteration of the Xbox. Sony has given us all a glimpse of what gaming might and presumably will be like in the coming years. Their is no question that Xbox came out on top this generation as the leading gaming platform. They set a bar for essential features that an online community needs to interact and connect with one another. If Sony delivers on even half of what was shown at their press event then they have set the bar to a whole new level. Technical specs aside, the connectivity, UI and features we have all come to expect will be a focal point for the next generation. It's a bar that any console maker will have to meet and exceed to survive.


I have no doubt Microsoft will at the very least offer a comparable assortment of bells and whistles for users to interact with, but one glaring flaw that needs to be addressed will make or break their attempt. Xbox Live Gold. This is an issue that has been at the forefront of my mind for some time. I often wonder as of late what that $60 dollars a year goes to. Added security? More stabilized social structures and features? Server maintenance? The only thing I can be sure of is that I have to pay $60 a year to play a game I have already paid $60 for and to buy more products on the Xbox Marketplace. In essence I have to spend money to spend money. While the required subscription service business model for Xbox may have made sense in the infancy of online console gaming, in this day and age it is an outdated business model of the highest degree. Features like playing online and shopping an online marketplace for dgital offerings should come standard and at no cost to the consumer.


It's no secret that Sony has offered most of these features at no cost to the consumer. Instead, they introduced a business model that is incentivized and consumer friendly on many levels. Bonuses such as free digital games monthly and early access to demos and DLC are great ways to not only draw in new subscribers but keep them renewing year after year. Your yearly subscription feels justified and worth the money you put in if you're seeing a tangible reward monthly.


If Microsoft wants to keep pace with its competitors and succeed in this brave new next gen world they need to shed their current Xbox Live model and adopt something similar to PS Plus. Features like the ability to play games online, access to apps, online marketplace shopping, and player to player connectivity are standards in this day and age. They can no longer be considered the proverbial carrot to dangle in the face of gamers to keep them around. The lines between consoles is becoming increasingly blurred and the pool of first party console exclusives is becoming shallower and shallower. Halo and Gears of War alone aren't enough anymore to keep the loyal continually loyal. Unless Microsoft can adapt in a way that not only rewards their current subscription base without alienating them but also entice new customers then I fear Xbox will fall behind in the upcoming cycle and may even lead to their own demise. If players can get the same games and online experiences for free on one consoles why should they have to pay for those same basic features on another?


The bar is set and the clock is ticking....