Michael Pachter’s job is to predict the future of the video games industry, which entails making sweeping accusations that usually cause quite a stir. As a guest on the most recent episode of Game Trailers’ Bonus Round, he kept his hot streak going with a new prediction that stunned everyone. Apparently his crystal ball has informed him Xbox Live will eventually cost $100 a year.
Pachter bases this assumption on the fact the Xbox 360 has become deeply entrenched as the main online console for many gamers around the world. With Microsoft’s hooks deep into us, these people would have no other choice buy to pay the money if the price went up. Well I’m here to completely disagree with that statement, because I think increasing the yearly cost of Xbox Live could be the absolute worst thing for the system.
I do have to admit that Michael Pachter’s logic for why Microsoft could increase the price of Live does make sense in a way. He states that, “You really want to hook every gamer who has a 360, you want them to buy all their games on 360, play everything multiplayer, pay you 50 bucks a year so that, in a couple years, it’s a 100 bucks a year.” Take a note of this people, because this is something straight out of business 101.
Microsoft has been following this business plan for the last four years. They released a high quality, pay-to-play online service on a powerful, yet affordable console with a slew of highly acclaimed games. Considering that their only real competition during this time has been the PS3, a more expensive console with a sub-par online service, it’s no shock the Xbox has garnered a huge following.
I have been a die-hard Sony fan since the original Playstation launched, but even I’ve converted to buying all of my games for the 360. It’s hard not to when most of my friends own the system and all play online with it for around $50 a year. By this point we’ve all built up huge libraries of games that number well into the twenties and thirties. We are, in essence, the exact people Pachter is describing.
One problem with his logic though is he really underestimates the grand strides Sony has made recently to get the PS3 on the same level as the Xbox 360. The shiny black box is no longer the $600 or $400 behemoth it used to be. It’s not even shiny any more. It’s got a brand new slimmer figure, and a shockingly low $300 price tag that has sent sales through the roof.
If you consider that the PS3 has more built-in features than the 360, like a blu-ray player and wi-fi support, it should come as no surprise that people are finally jumping on the Playstation bandwagon.
The library of games is also arguably starting to surpass that of the Xbox. With the age of 3rd party exclusives behind us, Sony is starting to separate itself from the competition with a long list of highly anticipated and acclaimed titles like Little Big Planet, Killzone 2, inFamous, Uncharted 2, God of War 3, MAG, and Gran Turismo 5. With so many exclusives to choose from, Microsoft simply can’t continue to rely upon the Halo, Fable, Gears of War, and Forza series anymore to differentiate themselves.
What’s really on trial here is the online service, and the Playstation Network gets a little closer every day to being as good as Xbox Live. What used to be considered little more than a joke, has slowly blossomed into a reliable service that has millions of subscribers who play tens of thousands of online matches a day.
With the exception of cross-game voice chat and a party system (both of which are in the works), Sony’s network has the exact same feature set as Microsoft’s at the low price of FREE! What more could you ask for?
With the PS3 having a $300 price tag, more built-in features, an incredible software lineup, and an almost identical online service, I don’t understand how Microsoft could ever charge $100 for Xbox Live without losing tons of customers to Sony. Pachter needs to remember that the console war is far from over and while the 360 might be in the lead, it’s not by much.
There are still millions of people out there who haven’t purchased a next-gen console yet and they are looking for the best value proposition. Not only that, but there are mass numbers of Xbox 360 customers who have been unhappy with the poor hardware quality that threatens to red ring their systems. These people have been looking for an excuse to jump over to the PS3 to finally enjoy the incredible lineup of 1st party exclusives.
Increasing the price of Live would only give all these people another reason to join the ranks of the PS3 elite. Not only that, but it would give gamers like me who own both systems, a reason to finally stop paying for the service and switch exclusively to PS3 games.
While I might love the 360 and its great online network, I have been extremely impressed lately with the quality of the Playstation Network. Both Killzone 2 and Uncharted 2 launched without any lag, server, or network problems at all. With titles like Resistance 2 and MAG pushing player counts past the 60 person mark, Sony has proven the PSN can handle large amounts of traffic. I’m honestly starting to run out of reasons to continue paying $50 for Live, so why would I ever pay $100?
Now let’s assume that Microsoft does raise the price and some people pay, while others cancel their service. At twice the price, you would think that even if half the subscribers left, Live would still make the same amount of money it’s making now. That’s not the case though, as Microsoft would also lose the royalties from the huge loss of software sales that would accompany the mass exit of people. Then there are all the new customers who wouldn’t even buy the system in favor of the cheaper PS3.
Simply put, Microsoft will be signing its own death sentence if it ever decides to raise the price of Xbox Live. Considering how well the PS3 is doing and how far the Playstation Network has come, in time they will probably find that charging $50 won’t be accepted anymore. Microsoft is slowly but surely losing its grip on the online console market, and if they don’t shape up soon, they might find themselves on the losing side of the console war. I think Michael Pachter might have been dreaming too far outside the box when he made this prediction.