Bloomberg recently reported that former News Corp. president Peter Chernin and Microsoft have discussed the creation of a television channel exclusive to Xbox Live. The channel would offer original shows and reruns aimed at the online service’s young male target audience. There’s been a fair amount of discussion on the benefits and drawbacks of such a move, but I believe the proposed cost offers more food for thought.
To support the establishment of a new channel, Chernin suggested increasing the cost of an XBL subscription by one or two dollars. After hearing about this proposed rate increase, I found myself contemplating the current subscription fee for Xbox Live.
When XBL debuted back in 2002 it was a giant leap forward in the world of multiplayer gaming. It took the basic concept of online console gaming introduced by the Dreamcast and vastly improved upon it. XBL not only gave you the ability to play with other consoles over a broadband connection, it also gave you a consistent profile across all of your games, a unified friends list, and standardized voice chat.
After the failure of the Dreamcast, it was a massive and risky investment by Microsoft, at a time when broadband usage was still low. The service couldn’t have been financially viable without a subscription fee. Fortunately, the investment paid off as XBL grew into one of the major selling points for the Xbox, and many gamers – myself included – were happy to pay for online gaming.
Fast-forward eight years and I find myself still paying the same subscription fee, while wondering why the price hasn’t gone down. Network technology and infrastructure have made massive advances in that time and free online gaming has been available to PC gamers for even longer. More recently, PlayStation gamers have also been given that luxury.
You might argue that XBL has evolved from its original form and requires more investment and maintenance costs; providing features like Netflix, Games on Demand, Messenger integration, and video chat can’t be cheap. There are several problems I have with that assessment:
The first is that the more expensive features like Netflix and Games on Demand are paid services. The cost of downloading movies and games should be reflected in their purchase price, which they are, rather than the subscription fees.
Your average gamer may not even use any of the extra functionality afforded on XBL. Many gamers simply use XBL to play games online and that’s it. I know that I personally don’t use any features on XBL that aren’t also available on PlayStation Network for free.
Gamers outside the U.S. don’t even have access to some of the features like Netflix. If the justification for the subscription fee is the extra functionality, is it fair to charge the same fee to customers who can’t use them?
Microsoft, to their credit, is constantly improving XBL. New features like Facebook and Twitter integration obviously come at a cost, but what comfort is that to someone who doesn’t use them, or prefers to use them on a PC? Additionally, why are we paying for improvements if they plan on raising prices to support features like a TV channel?
No matter how you look at it, XBL is overpriced; or, at the very least, overpriced for those who just want to play games online. This is especially true when you compare it to the free online services offered on PSN. The only problem with that comparison is that XBL offers a better online experience than PSN and many people do in fact use the extra services XBL provides. If it’s unfair to charge the average gamer for features they don’t use, then it’s also unfair to take those features away from those who prefer to pay for a better online experience.
Following that line of thought, I won’t suggest that Microsoft make XBL free, and we all know that’s not going to happen anyway. What I will suggest is that they simply give the silver membership access to XBL Arcade and the ability to play online. That would bring it on par with the rest of the industry, while still giving power users the extra content they desire. They could even introduce a third membership tier that charges you a smaller fee in exchange for select XBL features.
This may just be a pipe dream at this point, because with over ten million gold subscribers and growing, people have shown they’re willing to pay for XBL and Microsoft hasn’t traditionally surrendered any form of additional revenue. That being said, PSN has improved greatly since launch and has significantly closed the gap between the two. The emergence of PSN could force Microsoft’s hand and many Xbox fanboys could find themselves indebted to Sony.
Now that is something I would love to see.