#aaa gaming

Video game debuts are a little like movies. Most of the revenue is made on the release and sometimes on the merch/marketing/placement that features the media. Sure, sometimes additional money can be made with a movie or a game sometimes with continued sales, but only if those sales come from the publisher or label that has the license for the media. This is why many big movies and games re-release so many times: so many new editions of old Star Wars, why Skyrim keeps getting re-re-released, etc. Because if labels don’t consistently put out content or find new sources of revenue, they don’t make money. If people continue to consume Star Wars or Skyrim, if there is still a demand or a market for buying these things over again, the publisher will try to profit from it.

But the used games/rental industry filled this demand without giving money back to the publisher. Or even the simple act of handing over your copy of the disk to your friend. Game publishers make 0 dollars off used game sales. Same way that movie rental stores paid no or only a minimal fee to media labels to be able to re-sell movies and rent them out. So a single purchase of one game (often a purchase the used games store didn't have to make, as they can get people to trade in things for nearly free!) means that potentially infinite people can buy that one copy again, and again, and again. The label only gets a portion of the original sale.

For a while, this was the primary panic in the AAA game industry. They feared that used game sales would drive them out of business. To them, it was seen as a form of non-prosecutable piracy. They wanted to control all supply of what they had released to the public and make money off of every single person to purchase their games, they didn’t want their consumers to sell their games to each other, or to a third party distributor, or even just trade them for free.

So the extremely user-unfriendly features of the Xbox One were designed to make it extremely hard to have ‘used games.’ They thought that the brand loyalty of their consumers would lend them to tolerate this; as that post said, ‘Xbox’ was nearly synonymous with console gaming for a while. And with that domination of the market came the big numbers of lost revenue as a large percentage of game sales were used games, not new games.

Microsoft underestimated how much their actions would piss off their consumers, how little brand loyalty they actually had, or the type of consumer loyalty those consumers expressed instead. For example, Many Nintendo fans are ‘loyal’ to Nintendo not because of the brand’s actions (which often are the most corrupt of the lot!) but because they like the proprietary properties that Nintendo owns, and will jump any height to reach the next Mario game or Zelda game. Nintendo does not often license their properties to any other platforms but their own, so if you want Zelda, you’ve got to sing their song. Not exactly the same as ‘brand loyalty.’

Fans of the Xbox enjoyed its large library and relative economy next to Sony’s PlayStation III at the time. There will always be die-hard console war brand ambassadors. But if you sabotage the average game consumer’s ability to enjoy those features, they’ll leave for the next company that offers those features instead.

The attempts to grab money back from the used games market resulted in Microsoft tanking all the features in the Xbox 360 that their consumers were there to enjoy. Unlike Nintendo, Microsoft doesn’t have that many exclusive properties of its own that would cause people to endure that kind of nonsense.