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Thursday, August 11, 2005

Microsoft XBOX Accessory Squeeze

Microsoft recently announced that the new XBOX 360 will have a proprietary protocol for its peripheral interfaces. Microsoft is doing this so that they can get royalties from third party manufacturers. Because of this, Microsoft will control what peripherals can be added to the XBOX, and will add a sizeable chunk to the cost of those devices.

The consumer loses out for several reasons...

1) The consumer is suckered in by the cheap price for the hardware. This has been the business model since the original XBOX and the Sony Playstation. The XBOX hardware was actually unprofitable. The consumer is then hit with higher prices for the extras; game controllers, DVD controller, networking equipment, voice headsets, etc., in order to generate revenue. (The software is also full of licensing fees, but I'm not ranting about that here.) We, the consumers, are partially to blame for allowing this. We are easily enticed by cheaper up-front costs without considering the entire costs of owning the product including the accessories. Don't be fooled.

2) The opportunity to purchase cheaper third-party peripherals will be limited. I find it unlikely that many third party vendors will be able to undercut the cost of Microsoft peripherals when they are also going to be paying a royalty to Microsoft in order to sell the product. Also, consider this. Let's say you have some fantastic auto racing game on your computer, so you buy the MS steering wheel control. (I have one, it's fun.) Now, when you get a driving game for the XBOX, you'll have to buy a separate controller, because the PC one will be incompatible with the XBOX. There is no technical reason for this, only a greedy business model.

That really pisses me off.

1 comment:

jandg said...

Oh little grasshopper, why is it news to you that Microsoft would sell hardware at a loss, but make huge profit margins on required software and peripherals? That is the Microsoft way! All hail Bill Gates, all hail Bill Gates....if we could just convince him to sell a product to Al Queda...that would be justice!