Unfettered Blather

Related hilarity here

There have always been complaints about Microsoft Points and how Microsoft refuses to do anything in actual dollars. Part of the problem is the wonky conversion. In the United States, 400 MS Points is equal to $5 but the smallest unit you can buy is 500, which comes out to $6.25. This causes no end of complaints, especially when Wii Points are essentially 100 per $1. However, I find Microsoft Points to be entirely consistent with how Microsoft does business and especially how it treats its customers.

So how do you win this “game”?

There really are only two options.

1. Refuse to play
2. Don’t worry about it.

Any other solution causes heartache and grief over a business practice that is unlikely to change this hardware generation. The simple fact is that the way MS points work the most you’re likely to be out is a couple of cents, maybe a buck at the most. In the meantime, all the ranting, raving, and obsessing doesn’t do anything but create unnecessary stress.

I don’t worry about it because points don’t expire. If I don’t have enough I don’t worry about the fact that I will have to purchase more than I need. The unused points will just go to a future purchase. I’ve carried a balance as low as 30 points, which is essentially worthless. Those 30 points are worth less than half a dollar, though I can still use them in conjunction with a future points purchase.

At best, Microsoft may end up profitting a few cents that I’ll never spend. I’m able to afford a 360, a subscription to X-Box Live, and have enough disposable income to actually buy things off the service. I think I can afford to lose a few random cents over the next few years.

I made a prediction back in December that PC gaming as we know it would end. The new OnLive service seems to support my vision of the future.

What I haven’t seen yet is the real potential of a service like OnLive, but when people talk about “A new way to play games on the PC” they’re thinking too small. If all the heavy lifting is done on a server somewhere, why would this be limited to a PC?

Let’s get a few things out of the way, I’m well aware of the technical limitations right now. At some point in the future someone is going to figure this out and make it work. Maybe it won’t be OnLive, but this is a direction the industry has been looking at for awhile. OnLive is possibly just the first to really make a go. We already have browser gaming thanks to GameTap, so the ability to deliver content through a browser is possible and happens already. What OnLive introduces is more reliance on the server side and a true thin client. Honestly, lots of non-gaming applications already do this. The question now is “when” not “if” they can get it to work.

When OnLive, or whatever, finally becomes available there is nothing that says you will actually need a PC to make it work. They might be saying it now, but all you really need is enough processor to handle the content and rendering graphics. A console with the ability to interact with OnLive could do this, a blackberry hooked up to a monitor and keyboard like I suggested in my original article could do it if it had the rendering capabilities, older PC’s in need of an upgrade suddenly become viable. The possibilities are endless.

Not only that, but it’s not really a bold and daring idea. On demand content is already becoming commonplace with movies. This fits the general public’s expectations just fine. The only thing holding all this back is that the infrastructure may just not be ready to handle this kind of service on a massive scale.

I appreciate that it’s difficult to keep work and personal separate. With the convenience of modern technology, it is all too easy to take care of personal business during working hours. Considering how often work tends to intrude on personal time I’m pretty apathetic to employees, co-workers, and supervisors who tend to personal business during work hours. I used to feel differently until I met someone who was always browsing the web that got assigned to my project. I used to think he was the biggest slacker I ever met, but he was an incredibly hard worker. He got his assignments turned in on time, he was always willing to help, and was quick to pick up the concepts I was trying to teach. I never quite figured out how he was spending so much time surfing the web and getting his work done, but I decided it wasn’t worth pursuing. He was getting his job done.

That is what I care about. Are you getting the job done? As much as businesses obsess over personal phone calls, surfing the web, posting to blogs, and other activities, I can’t help but notice that there are some people who simply don’t accomplish much even though they appear to always be busy. Yes, there are people who goof off on company time as well. As far as I’m concerned, someone’s output and accomplishments are the real measure of their worth to the company. So I have quit worrying about what people are doing.

At the same time, there are some lines that just should not be crossed. I don’t mean fine lines but rather lines that would be analogous to the double yellow line on a highway that clearly marks you should not cross them. In my mind, one of those lines is e-mail. Specifically, using your company e-mail address for personal business.

I keep a Yahoo! account for personal reasons. If I want to send something to my wife, respond to a friend, or attend to an important matter that is not work related, I use it. Even if I need something urgently I don’t use my work e-mail even though the Yahoo! mail is not actively open all the time. Honestly, if I need to know something urgently I’ll probably use a cell phone for that. I get really peeved when I see someone has sent me something from their work e-mail. Why? Why is that necessary? Why are you cluttering up the company mail server with your personal crap? Are you telling me that joke couldn’t wait till you get home? Did you really have to send all those attachments? Is your boss ok with this?

I’ve walked in on employees before and caught them with gmail or Yahoo! mail open on several occasions. I’ve never said a word. Cracking down on that would just encourage them to cross a line I’d rather they not. If you’re going to engage in personal business during company time, make sure you keep it as separate as possible. Do you really want some network weenie possibly reading your personal business? At least if they check server logs all they’ll see is you used webmail. Thankfully, our company doesn’t block that. Even when I worked at places that did I simply waited till I got home and did my personal business then. Now, I do make an exception if this is internal and someone decides to share something with their co-workers. We don’t all know each others personal information, but I have someone outside of work who sends me stuff to my personal e-mail from his work account all the time!

Look, in the white collar world where you typically get paid well above the median salary work and personal does tend to intermingle. At the same time, out of a sense of professionalism it’s a best practice to keep the two as distinct as possible. For one thing, it’s mentally healthier. For another, it just sets a much more professional tone. No, it doesn’t look good on the surface to be caught sending something via Hotmail. On the other hand, it is a more professional tactic to do so. Besides, the technically savvy know you can send e-mail by phone now, it’s not like companies can stop it. Technology makes it too easy. If your boss gets this, there is no reason to be using work e-mail for non-work related business.

This builds on yesterday’s post.

Let’s say game prices today are purely arbitrary, because they are in all honesty. Valve has made great leaps in proving that games can be priced pretty much however a publisher wants to, so this is all about supply and demand. Except that games are not priced according to demand, they’re priced to some arbitrary scale that all the publishers agree on. That would be called “collusion” in most any business model and is the source of trust busting on the part of the government. One of the problems the game industry continues to face is poor price stratification. I think many times a publisher knows they’re releasing a weak game, but they’ll still push it out the door at $60. The irony being that if they would release at $20 then more people would be willing to chance it.

Here is my purely anecdotal scale:

$5 - The game probably stinks and isn’t worth my time. I might pick it up if I’m bored.
$10 - The game has limited replay value, but the price is no longer an indication of quality.
$20 - Greatest hits or a title that has been out awhile. Generally willing to get this at any time.
$30 - Now I feel a little pain. I may be reluctant to pick up a game if I have strong doubts, but willing to try if I have any interest.
$40 - Must have strong interest in the game or it comes recommended by someone I know.
$50 - Must be part of an existing franchise I already have a positive experience with or overwhelmingly good recommendations from a trusted source
$60 - Must be part of a franchise I am a huge fan of, may still need strong word of mouth. Unlikely to be a day one purchase.

Here is how it works in reality. If I have up to $40 cash in hand and the game meets the above criteria I will probably walk out of the store with it. Most any week I do have $40 cash in hand. If I have $60 on hand I am still likely to leave the game on the shelf. In other words, $40 is my upper limit on impulse buys.

Oddly, there are still some real stinkers that have been on shelves awhile that are refusing to budge on price. That’s fine, I won’t buy them. A few I’m curious about, but I’m not going to pay $60 to satiate my curiousity.

If publishers are wringing their hands so much over used games, then they need to start adopting some kind of price stratification. The last game I saw released for less than $60 on the X-Box 360 was Legendary, which debuted at $30. The game was absolutely terrible and the reviews thrashed it. The game industry might think that reinforces how important the $60 price is for a mark of quality, but in reality the message it sent was that the only time the game industry will release at a reduced price is if the game is so terrible that no one would buy it unless you paid them. There are several games at the $60 price that send the same message though.

Highlights of Gabe Newell’s speech at the DICE Summit

I’m not going to rehash what has been said on a number of websites or do the analysis that has been done already elsewhere. All I want to point out is that I have been saying for over a year that a $60 price point for new games was entirely arbitrary.

I think the gaming industry is currently frustrated by how often consumers are turning to used copies of games or outright piracy. I think the problem is that games cost too much and that DRM actually makes your product worse. I have long argued that $50 is the breaking point for games. It’s uncomfortable and a significant chunk of change for most consumers, but it’s still low enough that it feels expensive but not unreachable. The problem is that the people who set the pricing don’t seem to understand that every time you increase the price the perception of cost becomes exponential. In other words, some business troll is thinking “Hey, it’s only $10 difference between $50 and $60. So what?” What they don’t seem to think about is that everyone has a price point where the risk of their purchase being poor is outweighed by the cost of the product. At which point they either will simply not buy or wait till the price is reduced.

What is not taken into account is how much the price of games can hurt potential purchases. I have the money for more games than I currently buy, but most of the games I’m interested are too risky to invest $60 in. If more games would hit $30 I would not buy twice as many games, I’d probably buy three times or maybe even four times as many games. In other words, that $60 I am NOT spending right now would easily turn into $90 I WILL spend. This is not news though. Gamers have long talked about a $30 sweet spot, where a game is priced low enough that they will still buy it on impulse.

Everyone likes to point out that it costs money to sell physical copies. Distribution, packaging, etc. There are two problems with that argument.

Number 1: Part of the current issue is that games are marketed to sell somewhere between 75% to 90% of their overall sales within the first two weeks. This means if a game sells poorly within two weeks of release it is considered a failure. This is an incredibly short-sighted way of doing business. As much as game publishers bemoan the constant push for “the next big thing” they are bigger perpetuators of this trend than the consumers.

Number 2: Distribution and packaging are a very small part of the overall cost of a software product. Obviously as sales drop off the distribution cost per unit grows, but it’s nothing compared to offsetting the cost of the initial development. The truth is that in software your biggest cost is just delivering the product to a completed stage. The handy thing about a $60 price point is that it gets you to your development cost coverage much sooner. Unfortunately, if the game is priced too high then you may never cover your development costs. Even with distribution and packaging, once your development costs are covered every copy you sell is mostly profit. Selling software that has already recouped its costs is essentially like printing money.

When Microsoft and Sony said they’d have to make games more expensive to cover the additional costs of developing in hi-def they were effectively lying to consumers. They didn’t have to raise prices, but what they did show is a lack of confidence in their own products, or perhaps they overstated how sure they were that demand would be high enough that consumers would pay the additional cost. While there have been wildly successful games sold at $60, how many studios have shut down after recent failures? If your game is not a guaranteed stunner right off the shelf, chances are it will not sell.

I don’t see the gaming industry learning a lesson from this anytime soon. I suspect they will stubbornly stick to their guns because people are paying the $60 price tag, for now. On the other hand, people continue to point out the lower cost of the Wii and the lower cost of Wii games. At what point does Microsoft and Sony get tired of Nintendo rubbing their noses in their own excrement?