Double Agent
Greed is good - August 21, 2001 - Chris Jones

Disclaimer: The opinions expressed within this column are those of the participants and the moderator, and do not necessarily reflect those of the GIA. There is coarse language and potentially offensive material afoot. Would you believe I've run out of quotes to put up here? Don't say we didn't warn you.

I would say more in intro, but there are a ton of people just bursting with enthusiasm to explain what the heck is going on with the XBox, and who am I to stand in their way?

Onward.

Basic economics
Microsoft is, quite simply put, the prototype for making money. The company is experienced and is very smart when it comes to juicing the consumer for as much profit as is to be had.

There is a certain level to which prices may be raised before people will stop buying hte product. If Microsoft sells peripherals and games for more money, they WILL lose customers. But they will still make more money because enough people will still buy their products at this elevated cost.

Take recent gasoline prices. An extremely small amount of people purchased less or no gasoline, so the oil retailers simply made more money.

In summary, the prices reflect the consumer's will to pay. If Microsoft did not think the consumer would pay for extra stuff, Microsoft would not sell it for as much or at all.

Thanks,

Conor Richards
"L-Space"

Insofar as there is a "real" reason why Microsoft is doing this, yeah, that's probably it. Those of you who have taken an economics class in high school or college have studied things like demand curves, and there are some demand curves (like those for cigarettes) which dictate that there's a certain market for a product at almost any price, so you might as well jack the price way, way up while you can.

In other words, some marketing task force up in Redmond told Mr. Gates, "we'll get this many sales even at this insanely high price", and he said, ok, go for it. It even makes sense if you assume that there'll be a limited number of consoles at launch, as with the PS2, so Microsoft might as well make the most of what they've got by making sure they'll just be able to sell it at the highest possible price.

Of course, that's the likely, rational reason. Much more interesting are some of the irrational reasons...

Bill Gates == Kenshin?
Why is Bill Gates making the X-Box bundle only? Easy! Because he wants a challenge. Selling an expensive machine that no one really wants into a saturated market that already has two huge multi national corporations competing in it is too easy for Bill. What he wants to do is sell a really really expensive and overpriced machine that no one really wants into a saturated market that already has two huge multi national corporations competing in it. Now that is a challenge!

--
BeerGoggles_FromMARS
Daniel Kaszor

Much like Kenshin fights with a reversed blade, or the legendary Master Musashi would take on armed opponents with only a wooden sword at his side, it's possible Bill Gates has simply grown bored of being able to outfox any competition on a level playing field, and now seeks artificial hinderances to further increase the fun of the game. All I've got to say is, watch out for hubris, Mr. Gates...

Establishing a new baseline
Odd peripherals and specialty controllers generally don't do very well on consoles. Aside from the occasional arcade-figher joystick controller or racing wheel, most unusual controllers generally don't sell much, and certainly don't build enough momentum to justify paying $40 just for somewhat more intuitive control of a handful of games. Almost every light gun since the Zapper has more or less bombed, and the only real justification for buying a Dual Shock joystick is for a frequent flight sim player (and there aren't too many of those with PSXes). It's possible that by introducing a new controller, entire new subgenres of games can be created that simply aren't practical with a gamepad -- but the momentum for this has to come from *somewhere*. Just introducing a controller and a few proprietary games (if they're just as good with a gamepad, it'll never work) will not, and has not, done the trick.

The obvious solution? Strongly influence your customers to buy these new things, thus ENFORCING a solid user base from the beginning."But I don't want to pay a hundred dollars for a single controller/game set!" will no longer be a valid excuse, since so many people already have the former part anyway. Highly original titles and niche games will become much more popular and common, since gameplay design will no longer be chained to the gamepad.

This all ties in towards the strategy that the release lineup seems to be hinting at. Microsoft knows that as a newcomer to the industry, they can't take a frontal assault by directly going to the mainstream, so they've decided to sneak into the market by first getting a foothold among the niche players, and gamers who aren't content to just own one system. The XBox will be a "secondary" system -- something that you buy so you can play "those other games". Once they've gotten a foothold in the market that way, they'll have the resources and name recognition to actually try to dethrone Sony and Nintendo, rather than just fill the cracks between them.

-J.S. Powell

Hmm, interesting notion. Of course, if they were really serious about that, they'd simply make those products part of the actual package rather than going through this charade of "bundling", much like Atari sold everyone two standard controllers and two paddle controllers, long, long ago.

But even so, your suggestion has merit: the actual games the XBox ships with might not be that great, but XBox owners might (theoretically) still find themselves enjoying their purchases more than their Nintendo and Sony peers, just because their XBox can already do things like broadband, DVD-with-remote-control, a mouse/keyboard combo for FPS games, etc. And afterwards, not only can XBox developers count on being able to program for more interesting and varied control schemes, but positive word of mouth might begin to spread about the "complete XBox experience", which could drive future sales of the product up.

Ok, it's a pipe dream, but an intriguing one.

Over Bill Gates' money-grubbing corpse!
What is the reason for MS's bundling operations? I think the answer(s) is fairly simple. They are going to take a bath on the hardware alone so they have to force cheap extras down the consumers throats to make some profit on this venture. Or we can always go with the idea that Bill Gates didn't want PC gamers grabbing his X-box a $299 and hacking it up and getting around $500 worth of components out of it. Lets see a GForce 3 graphics chip a 10g harddrive and if I can rig it up a free ethernet port. Sounds better then a trip to CompUSA.

-bigdvs
neo-epicurean

I wouldn't be too quick to dismiss this, since I personally was already too eager in saying "the XBox will not be a PC", and was then promptly proved wrong when I got to see one crash and restart at E3. Of course, I think a lot of those people who are looking for a top-of-the-line PC experience at a bottom-of-the-barrel XBox price will be somewhat disappointed at how smoothly their system hacks actually run, but at least it'll give the freeware OS community a new toy to play with for a while.

A brief aside about swords and guns
i must say that i disagree with your saying that if there are guns..that it should revolve around guns..and that swords would be more useles..

Guns are more effective against humans..and in the real world..because all it takes is a little puncture wound to kill someone.. but think about it..cutting a large jagged slash with a blade is doing more DAMAGE than a little puncture wound..

in the RPG worlds..you're not fighting just humans..you're fighting monsters..and some things not made of flesh and blood.

swords do make sense, of course a gun would be the easiest way to kill a person, but could you see a gun stopping any of the WEAPONS from ff7?

Let me get this straight: you're under the impression that swords, realistically or quasi-realistically, make more sense for combat than guns?

Just think about it for a second: yes, in the right circumstances, swords can cause a tremendous amount of damage, but there are at least two complicating factors with regard to that damage.

First off, in a melee against any kind of opponent, human or whatever, you're going to find yourself hard pressed to actually hit anything with a sword, because your weapon has a very limited range and your opponent's going to be running, dodging, blocking, and attacking while you're doing all this, all of which makes it much more difficult to land that critical attack. Meanwhile, unless you're made of solid titanium, there's no way to avoid taking damage from an accurately aimed gunshot.

Second, and more importantly, you usually don't need to slice someone in half to get rid of them. Again, anything short of a solid block of metal or stone should have a wide array of weak spots - just shoot out a few of them and have done with it. And if you are going against a solid block of stone... well, I'd rather have a sledgehammer than a sword, in that case.

And last but not least: let Cloud have as big a sword as you want, but do you honestly think he'd ever have a realistic chance of stopping a Weapon?

Ok, that was a pointless, fanboyish topic, but isn't that what this column's supposed to be about in the first place?

Painted into a corner
I honestly can not think of a reason for Microsoft to do such a thing.You have GameCube launching a mere three days before at a much lower price and they make it so you have to spend an absurd amount of cash.It would be close to Christmas after the launches and parents are the ones that buy the systems for their kids.Do you think they care how much polys the XBOX can push or that DOA3 is an XBOX exclusive?Hell no!They will see the price and immediately buy the GameCube.No ifs ands or buts.Microsoft has been in the the entertainment business for a while now.You would think they would learn how to market their products better.

Ninja_gamer

One thing to keep in mind is that the proximity of the XBox and Gamecube launches wasn't really Microsoft's decision: both companies announced their launch date on the same day, with Microsoft's announcement coming a few short hours before the Nintendo press conference.

Now, there's no way of knowing what actually happened, or who knew what before hand, but more than a few people commented immediately after hearing the GC's launch date that Nintendo hadn't set anything in stone until Microsoft announced, and then picked a date designed to cause maximum disruption to Microsoft's plans. That's just a somewhat far-fetched theory, of course, but Microsoft is in an unfortunate market position, and this may simply be their way of trying to minimize the resulting damage. We'll see what happens, I guess...

That's just crazy enough to work...
At first glance it does seem patently absurd for Microsoft to set up marketing for the X-box as it currently is. Newcomers to the console market, devoid of credibility in the eyes of most, fighting uphill against established giants Sony and Nintendo, with a machine that has certain design flaws (such as the need for product installation), the understanding that X-box games will be shipped and patched later just like computer games, and now this, the ultimate blow: the requirement to blow 1200 bucks on various games and doohickeys simply to even own an X-box in the first place. All of which would make any rational soul think Bill Gates mad as an oxygen deprived sterno freak trapped in a leaking bathysphere.

Ho! Not so, say I !!!!

Oh, certainly the X-box is being groomed to die a spectacular dogs death, the kind of truly abyssal failure that can usually be found only in urban legends about mustangs equipped with stolen JATO rocket units plowing meters deep into sheer rock escarpments, but this is all part of a truly, amazingly cunning plan.

The real issue is actually Microsoft's Dot-Net strategy, where all software, from operating systems such as Windows, to word processors, to games, will have to be paid for on a per-use basis, every single blessed time they are booted up. The Dot-Net scheme would ultimately cause programs that once cost thirty or forty bucks to pull in hundreds or even thousands over the course of a few years use, by having the user quietly bleed money in tiny, almost unnoticeable amounts, that quickly accumulate into mighty torrents of rushing, flowing lucre. Surely nothing on earth could convince consumers to accept such a thing...save one emotion: pity.

The entire hideous, blood-soaked X-Box debacle will deliberately devastate Microsoft. With cunning not seen since the great New Coke/ Original Coke advertising scam, the apparent Fall Of Microsoft will change public opinion from that of Persecution Of The Evil Corporation into a mad scramble to Preserve The Noble Archetype Of American Capitalism. Bill Gates will be spun into the Horatio Alger of our time, the plucky, goodhearted little fellow who singlehandedly invented computers, the internet, and 'mom', much less apple pie and God, but who was grievously betrayed by his deep, honest trust in the evil bastards that told him that games are good. By the time this unfolds, the country should be fully convinced that all games instantly brainwash children into becoming sweaty, trench-coated, homosexual, sheepshagging axe murderers, and the nation will weep for the loss of the Grand American Dream that is Microsoft.

Naturally, immediately after this, the whole steaming shaft of 'dot-net' will be swallowed down with the sort of fierce, hot desire known only to those adorable 'online-teenage-bondage-enema-semen-slurping-sluts-who-only want-your-man-candy', and the whole nation will be more than glad to 'become Dot-Net members now'. Oh, Bill Gates, you are suuuuch a hunky beefcake with your cunning, cunning plans!

Jennifer Diane Reitz
UnicornJelly.com

Good golly, I like this theory; it's got just enough behind it to sound reasonable, or even fairly crafty, while still maintaining that sweet, refreshing paranoid conspiracy aftertaste we've all come to love. Smokin'!

The reality is simply that Bill Gates has a number of irons in the fire at any one time, and whatever setbacks the company may take on one front will get offset by victories and fallback positions elsewhere.

However, there is a certain eerie resemblance between the XBox pricing policy and the Dot-Net/Windows XP stuff: both take as a base assumption that people can't live without Microsoft products, and both are intent on ultimately charging the user an arm and a leg for those products. Of course, both have a little more going for them than pure, naked opportunism: the XBox seems to have arisen because there's no fundamental reason an American company shouldn't be a major player in the lucrative home console market, and the Dot-Net programming tools put Microsoft's aging Visual Studio development suite in a better position to take on Java, while the XP pricing stuff may be the only real way to combat rampant software piracy in the Far East.

Still, I'm becoming exceedingly glad that I've got three things: a Gamecube preorder, a laptop running the non-Microsoft Mac OS X, and a working knowledge of how to program C, C++ and Java, so I don't have to deal with C-sharp or VB for a living. Yikes.

Form blazing sword!
Well, I think we all know the real reason. The Xbox is a superintelligent, superpowerful, silicon based lifeform. Once an Xbox is connected with the Microsoft XBox Force Feedback Omnidirectional Steering Wheel, the Microsoft XBox Force Feedback Omnidirectional Joystick, the Microsoft XBox Force Feedback Omnidirectional Fighter Controller, the Microsoft XBox 200 GB Hard Drive, Microsoft Owns Bungie XBox Only Edition of Halo, the Microsoft XBox aDSL/Cable Modem adapter, and Microsoft XBox MSN service for only $19.95 a month, it is only 65 downloadable patches away from becoming the Microsoft XBox Voltron Force Attack Robot.

That and I think Bill Gates likes hats made of money.

skye

And there you have it, folks. All I can say is, when a major company leaves itself open for us to make these kind of jokes about it, something's gone horribly, terribly wrong... but at least it makes good copy for the DA column.

Late breaking news
It is not true that Microsoft is REQUIRING people to preorder other accessories with a system reservation. That is an Electronic Boutique deal. I am employed by Gamestop (at a Software Etc) and the policy is NOT IN ENACTMENT at our stores. We just got an e-mail from the higher-ups about it; we may begin taking reservations again, and we will not require the "accessories" to be purchased as well.

Rob

Of course, given how upset this policy has made some people, it's not unreasonable that Microsoft would change its mind or somebody would start to break rank. Haven't had a chance to check this out myself, but if true then it might end up being even worse news for Microsoft - not only does this mess with the pricing logic Conor talked about in his first letter, but the XBox now has to deal with the PR damage caused by this whole ploy. What a mess...

Closing Comments:

Your topic for tomorrow is this: we've talked the XBox launch to death, but I honestly don't think we've had any standard, reasonable discussion about the Gamecube launch. You've got a pretty good idea of what it'll cost, and what games will be available with it: what are you getting on GC launch day, and why? Adios for now.

-Chris Jones, getting Smash Bros. at the very least

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