The Problem Of Free: Why Charging For Xbox Live Is Good
A common complaint about Xbox Live is that Microsoft is charging for something that you get for free on any other platform (PC, PS3, Wii). For many people free is their favorite four-letter word, and it is just a price you cannot beat. The inability to charge for online services of any sort (read: not just gaming) is a major problem though. This isn’t just about games, here’s why.
Money Isn’t The Root Of All Evil, It Pays My Mortgage
I don’t know exactly how this all started, but the very thought of paying for any service online is almost unthinkable for most people. Microsoft made a bold, but I think smart, choice when it decided to make the Xbox Live Community Games a marketplace of buyers and sellers; a place where creators can be rewarded for their work and aren’t pressured to work for free. After all what is really so bad about paying someone for something they do?
With the Xbox 360 (or any other console) you have people paying $300-$400 for a console, buying multiple $60 games, extra $40 controllers, and then they are going to balk at paying $45 for 13 months of service? That is only $3.46 per month. Pretty reasonable considering most MMOs cost about three times as much. Do people think that it just goes straight into Steve Balmer’s personal bank account or something?
The money really goes to pay people (regular ones, just like you and I) that work to create the hands-down easiest, most seamless, integrated, and arguably best online gaming experience available. I don’t think it is a coincidence that the only online gaming service you pay for was found to be the best, even amongst PS3 and Wii users, in a recent poll. Obviously this would be a different discussion if the Playstation Network was overwhelming seen as the top platform, but it isn’t.
You Don’t Get What You Don’t Pay For
There is an old adage that says “You get what you pay for.” I use the converse of that statement mostly though, “You don’t get what you don’t pay for.” I’m sorry if this sounds like Econ 101, but in a market driven economy paying is a crucial method of voting (signaling) for what you want so that people will build it. There is essential information inherent in a paying transaction that you approve of what someone did, and that they created value beyond what you are paying them.
If you have a situation like is common on the Internet today, the people who pay are actually the advertisers. So many sites and services are slaves to their advertisers because their users won’t pay a dime. I have asked many people I know who live and die by Facebook how much they would pay for it, and they all said zero. They all spend at least an hour a day on it, but it is apparently worthless to them, and much of what they want is never conveyed in any meaningful transaction.
So Facebook becomes a slave to advertising and pimping out their users’ information for every cent they can get. It isn’t unrealistic to think that if people paid for more services that their personal information wouldn’t be shared quite so freely. The sites don’t work for you though, they work for the advertisers. I’m not saying all online services or sites should shun advertising, but it is ridiculous how much the solution to every Web 2.0 business model is advertising.
In many ways the Internet has been one of the greatest economic tools of all time. Viable marketplaces will have to be developed as more and more things are done online though. Almost everyone shops online for tangible products, but something really needs to be done to make intangibles not a solely advertiser sponsored economy.
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22 Responses to “The Problem Of Free: Why Charging For Xbox Live Is Good”
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I recently jumped into the Xbox 360 scene and have to say that the online gaming/marketplace experience is probably around half the reason I’m ever playing on the thing.
I have a Wii too and wish Nintendo would just copy Microsoft’s model (for the online part).
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Are you mentioning that I have a form of advertising or something? I don’t do this blog to make money, and any ad-type of stuff on the site is only for products or services I personally use and/or endorse. If I was doing this blog to get paid, then all the hours spent writing posts was pretty worthless because it has barely covered the cost of my domain name.
I personally would never pay for online play, period. Microsoft can explain it anyway they like but the truth is no one would pay for the Gold service if Silver offered online play against your pals. The PSN offered this from day 1, for free. The PSN offers all the game play experience that XBL offers. No lag, voice chat in game, cross game invites. The same online modes are COD4 for the 360 and PS3 except you pay to use them on XBL.
You seem to have completely forget that the PC has the best online features and gaming for … free, do you not wonder why microsoft made Live free on the pc ? because it had to compete with other free services like steam, which personally has all the same features but a better price … free… ;)- i totally agree with your last paragraph though. saying that microsoft has its stakes in its hardware business and for that reason should make it free to sell more units, PSN is very close to live in terms of features so in conclusion in my option live will be free in the next 12 to 18 months. but thats just me.
There is no cross game invites on PSN…not yet anyway.
I think Microsoft has started hearing the rumblings of people complaining about them charging and other platforms not…I think that is why they are going to release the “New Xbox Experience” to justify the 50 bucks.
The problem I have is that when I pay $60 for a game, I think I’ve already paid for the right to play the game online. I have no problem is MS wants to charge for advanced online features like unified friends list or voice chat, etc. But it bothers me that they attach basic online multiplayer to those more advanced extras.
So basically, if all you want to do is play online with a friend, you’re forced to pay for all the features of LIVE. I think they should put online multiplayer into the silver featureset. Then you only have to pay if you want things like in game messaging, voice chat etc. This would be more fair than charging you for the game and then charging you again to play it as it was designed to be played, online.
well for me the only problem i have, is that if you pay for the live service why in hell should you have to pay for gamerpics, themes,and extra downloadable content for games that you have already purchased with the price for the points really ridiculous. everything else i would pay for.
[...] Article here [...]
you know I find the we voting aspect equating value to a service that is otherwise required, locked down and forced on the user as completely ridiculous.
we pay for peer to peer networking who’s speed is otherwise dependent on your isp, so what exactly are we getting for our $50 bucks? netflix? please, windows live failed because there is an alternative option. If free online play was allowed microsoft would actually have to provide a service worth paying for, which they proved inadequate in doing on the pc. The service is no better on 360, but the system is locked down with only one option, the vote is fixed and the consumer screwed.
I agree that dedicated servers would be nice, but for $3.50 a month I don’t know what I can really expect.
As for Live for Windows, you really can say that it is really anything like Xbox Live. The value of Xbox Live is the integrated seamless way you can perform updates, talk to and invite friends in any game on the whole platform, download demos, XBLA, etc.
You can’t do anything like that on Live for Windows. So far it is just another way to do online gaming on PC and it doesn’t bring anything special to the table. I personally know people who are PC gamers with Live for Windows games that were blown away when they got an Xbox with Live.
I understand where this article is coming from but there is one big sticking point for me. IF Microsoft is going to charge for the online service, fine. But I don’t want to see any advertisements. I pay for a gold membership
and still have to look at adverts every time I start up my 360. So apparently just getting my money isn’t good enough. I just gets to a point where its greedy. If you’re gonna charge for the service you don’t need adverts.
Totally agreed. Gold shouldn’t have ads. I don’t know if there is a perfect example of what I really mean, but Xbox Live is a well known decent example.
Who really cares about paying for LIVE? I haven’t heard anyone complain about the few bucks a month. Most of the people playing seem to be 10 yr. olds whose mommy’s and daddy’s pay for everything.
If anything, Microsoft should raise prices, because, nobody is going to quit playing. Hundreds of thousands online gaming at the same time, addicted, little thumbs and fingers moving. If anything microsoft could help out the poor little pudgy kids who aren’t getting as much exercise (read: real sports, outdoor activities).
You think blizzard needs 160 million a month, which is almost 2 billion a year or half the annual budget for NASA just to maintain their servers for their 10 million players. Take Microsoft live membership fees, multiply by approximated number of members, do the math, compare to competitor offerings and wake up. I own all 3 systems, MS just has us by the balls.
For the money paid each month i think it’s quite reasonable to ask for dedicated servers. (What i say now is not fanboyism, I have both consoles) PSN has dedicated servers on a number of titles. A free service provides better gameplay than a paid for one. Not on…
A previous post estimated that Live would be free in 12 to 18 months. I believe it will be the other away around, Sony will start charging for PSN. Just for the sake of expedience lets say there are 10 million Gold members (I’m sure it’s higher), that have no problem paying and are perfectly happy with the service they get from Live. At $3.45 a month per member, well you get my drift. So Microsoft has already proven that people will pay for this service to the tune of $34.5 million a month (and that’s using my low ball figure). Don’t you think Sony and its shareholders are looking at that. Their predicament is that by hyping their free service over Live they would lose face (Japanese) if they start charging. But that is a revenue stream that can’t be ignored and the shareholders are probably going to force the issue. I think the waters were already being tested when the started up a fee based online magazine. The rabidly loyal Sony fans will see this as another slap in the face but in the end will most likely stand by Sony. They should actually welcome it, because it would be a much needed infusion of cash for Sony that could pay huge dividends in other areas of the gaming division. IMO.
[...] Shark, this ones for you. Why paying for LIVE is a good thing. [...]
[...] A common complaint about Xbox Live is that Microsoft is charging for something that you get for free on any other platform (PC, PS3, Wii). For many people free is their favorite four-letter word, and it is just a price you cannot beat. The inability to charge for online services of any sort (read: not just gaming) is a major problem though. This isn’t just about games, here’s why. continue here http://pseudosavant.com/blog/2008/08/06/the-problem-of-free-why-charging-for-xbox-live-is-good/ [...]
[...] – bookmarked by 5 members originally found by helmi on 2008-09-25 The Problem Of Free: Why Charging For Xbox Live Is Good http://pseudosavant.com/blog/2008/08/06/the-problem-of-free-why-charging-for-xbox-live-is-good/ – [...]
While XBL only costs 3.50 a month with a 1 year membership, the cost will always be a deterrent. The difference between even having to pay 1 dollar vs free can cause people to pass on something. The point is that, while I paid for XBL when I owned a 360, none of my friends did, and nothing I said to them could convince them to part with their cash to get an account. So not only did I pay, but I also ended up not getting the entire value of my membership due to the fact that none of my friends would pay for XBL, and none of my friends would buy 360 games if they had the option to buy the same game on PC or PS3 (due to free multiplayer).
I eventually ebay’d my 360 and bought a PS3. I now play online for free with my friends, and the only game I miss is Halo 3. The point is, even if MS made XBL $0.01 for a lifetime gold membership, some people would not pay, because the cost is a deterrent in and of itself. They make money by skimming the top of those XBL mini transactions (DLC, Arcade, Vids, etc), so I think at this point they can drop the fee to play.
not only is money the root of all evil but it is also a bunch of pieces of paper with an imaginary value based on an imaginary set of rules called the economy