The Xbox One’s Two Potential Problems: Price and Indie Games

Microsoft's public relations work is far from over.

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As I wrote yesterday, Microsoft’s unprecedented Xbox One DRM reversal, whether enacted earnestly or cynically, bodes well for everyone (including, in my view, Microsoft). And no, to all the cynics and doomsayers, it’s not too little, too late, nor has “the damage been done,” which is just a shortcut to thinking about a bit of melodrama that’s played out over the space of less than two weeks.

Microsoft announced plans to restrict used games and force players online every 24 hours on June 6, then rescinded those policies on June 19. That sort of reversal’s unheard of in the games industry. Consider how long it took Nintendo, by comparison, to fix the 3DS’s pricing problem (six months). And at the time, we considered that extremely unusual.

Speaking of price, some are suggesting Microsoft ought to counter Sony’s PlayStation 4 and lop $100 off the Xbox One’s $500 tag. Is $500 too much for a souped-up game console that comes with the next-gen version of a 3D camera? Microsoft still charges $100 for the standalone version of Kinect 1.0 for the Xbox 360, after all, and the Xbox One will ship with more in the box than the Xbox 360 did.

Trotting out inflation-adjusted price indexes only tells part of the story. If, as the Bureau of Labor Statistics’ CPI Inflation Calculator tells us, $500 in 2013 has the same buying power as $419.20 in 2005, the Xbox One is only slightly more expensive than Microsoft’s $400 Xbox 360 when it launched in November 2005. And yet income growth has been stagnant for decades — earnings simply haven’t kept up — meaning, without turning this into an economics seminar, that comparing prices across the years isn’t as simple as plugging before and after inflation-adjusted numbers into spreadsheets and spitting out color-coded bar charts.

Income growth aside, here’s another way to look at it: Does the Xbox One offer as much value as something like Apple’s Retina iPad? The latter starts at $500, and the price skyrockets from there if you add cellular options or increase the slate’s flash storage. If, like me, you’re the sort of consumer who’ll spend far more time in front of a console like the Xbox One than tapping on a tablet, does $500 for a game system in 2013 seem so unusual or unfair? (Not saying, just asking — I won’t opine until I’ve spent time with the Xbox One.)

There’s another important wrinkle here worth thinking about when weighing your options: indie games (if they matter to you, which, if you’re a fan of stuff like Ancient TraderI MAED A GAM3 W1TH Z0MBIES 1N IT!!!1 and Dark, they should). Nick Diamon at Quarter to Three nicely summarizes the problem: Microsoft’s indie game approval process isn’t changing with the Xbox One, and indie developers, broadly speaking, have long been torqued off about Microsoft’s approach to indie gaming on the Xbox 360.

The problems: Indie developers can’t self-publish on Xbox LIVE. Microsoft requires that indie developers first find a publisher, which, you know, undermines the notion of the label “indie.” Alternately, they can contract with Microsoft (as their publisher), but they have to sign their souls away and agree to a period of exclusivity. And if they want to patch their games, they’ll have to pay for the privilege. “For tiny developers, a charge for a patch is the difference between paying rent and closing up shop,” adds Diamon.

Developers — at least the ones complaining in public — are nonplussed. Take Lorne Lanning, co-founder and president of game developer Oddworld Inhabitants (he’s the guy that created the Oddworld series). Here’s what he said about the program, speaking to Eurogamer last week:

Why do we need a publisher when we self-finance our games, we build our own IP, we manage our own IP and we’ve turned nearly two million units online as indie publishers sold – not free downloads? Why? What’s wrong with us? … Who’s in touch with their audience? And who seems out of touch with their audience? All we know is we’ve tried to get our games on their platform and we can’t do it – and I even helped them release the box.

Or take this damning recent statement from Phil Fish (via Polygon), creator of puzzle-platformer Fez, on publishing prospects for his forthcoming indie sequel Fez 2:

PS4 seems to be doing everything right. It’s too early to tell how everything is going to unfold but their heart definitely seems to be in the right place. Which is a weird thing to say when talking about giant monolithic corporation, but there’s a handful of people working at Sony today who are really trying to do some good. And whether or not I would develop for it comes down to how the platform holder treats me. With Microsoft they’ve made it painfully clear they don’t want my ilk on their platform. I can’t even self-publish there. Whereas on PS4, I can. It’s that simple. Microsoft won’t let me develop for their console. But Sony will.

It’s oversimplifying the matter to suggest Microsoft doesn’t care about indie games — clearly Microsoft does, given its respectable existing Xbox LIVE indie scene — and there’s arguably a benefit to creating filters that in theory prevent these ecosystems from devolving into something like Apple’s ginormous and yet largely junk-laden iOS App Store. (I also don’t take it for granted that every self-described indie developer deserves to be on these stores — plenty of these games play like shameless cash grabs that cheapen the overall milieu.)

But taking some of these premiere indie developers at their word, yes, it seems Microsoft has significant work to do if it wants to woo the triple-A indie crowd and ensure that the Xbox One becomes a dependable launching ground for the next out-of-nowhere works of indie genius.