September 3, 2004

Xbox Live Closed? Boo-F*cking-Hoo...

Computer And Video Games - Xbox 'Closed' To Final Fantasy

I found this article linked on Blue's News, and I can tell you this much right now...Tanaka-san is not speaking the entire truth.

I was at Microsoft while the design for Xbox Live was being hammered out, and while it is true that Microsoft does control the service, Microsoft's primary goals were to prevent cheating and protect the end-user.

Every single packet is encrypted, sequenced and digitally signed. The only part of the stream that is never encrypted is the voice stream.

If you want to do a server-based game like an MMORPG, you can. If you want your server-based game to speak to other servers, they can. However, Microsoft has a few conditions. First, your server software must be certified in order to get the decryption software. That means that a very strict battery of tests is run against the server. Second, your server must be up for at least five years. Third, your server must either be hosted by Microsoft or at a Microsoft-approved hosting facility in order to protect the decryption software for Live. Finally, any updates to the server software or downloadable content must be certified the same way the original software was.

Is this a fairly heinous set of requirements? Yes. Is the end result better for consumers? Yes. Admittedly, for Live 1.0, a server was not allowed to communicate with the outside world, but that requirement was loosened with Live 2.0. Live 3.0 has been released since I left Microsoft, so I can't speak for those requirements.

Besides, Electronic Arts' three major objections to Live were not that it was a closed system. First, EA wanted to be able to disable Live for their sports titles when the next version became available. In other words, they wanted it so that if you bought Madden 2005, once Madden 2006 came out, you would not be able to play Madden 2005 online. They weren't planning on doing it, but they wanted the ability.

The second was that they had invested nearly $1 billion in their online architecture, and they were hoping to monetize the customer information they got from that system. Because Xbox Live servers host all of the downloadable content and Microsoft handles all of the billing, Microsoft takes a percentage of any payment for downloadable content and subscriptions. Right now, that works out to about $0.75 on a $5 piece of content. Not bad, considering that unlike other consoles, Microsoft eats the certification costs, which run between $20,000 and $50,000 per certification submission.

The final is that content providers don't get any of the money you pay for your yearly subscription. The reason: Xbox Live is priced in such a way that it is a zero-sum product. You pay $49.95 a year, which is enough to pay for the development work on the service, new and replacement servers, technical support, marketing and a development hot team that not only creates easier-to-use libraries for other developers, but also actively helps other studios create compelling Live titles.

So, Tanaka-san, while you could do Live, you should at least be honest about your reasons. I'm sure that your architecture has technical reasons why splitting servers between your hosting location and a MS-certified hosting location would not work. I'm sure that you don't like not being allowed to have a multiple sign-in (GamerTag, then your own). I'm sure that giving Microsoft a slice of your subscription revenue doesn't make sense to you. But Microsoft's decisions were based on what is best for the gamer, not what is best for the developer. Microsoft gets enough flack for making decisions based off of what is best for Microsoft. They shouldn't get flack for making decisions based off of what is best for gamers.

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