Related to last month’s series on platform monopolies, here’s an interesting article on Microsoft’s baby steps toward opening up the Xbox:
With the hobbyist release, the software giant is hoping to lay the groundwork for what one day will be a thriving network of enthusiasts developing for one another, something akin to a YouTube for games. The company, however, is pretty far from that goal.
In the first incarnation, games developed using the free tools will be available only to like-minded hobbyists, not the Xbox community as a whole. Those who want to develop games will have to pay a $99 fee to be part of a “Creators’ Club,” a name that is likely to change. Games developed using XNA Game Studio Express will be playable only by others who are part of the club.
Next spring, Microsoft hopes to have a broader set of tools that will allow for games to be created that can then be sold online through Microsoft’s Xbox Live Arcade. Microsoft will still control which games get published, and it’ll get a cut of the revenue.
Down the road, probably three to five years from now, Microsoft hopes to have an open approach, where anyone can publish games, and community response helps separate the hits from the flops.
Just so we’re clear, the obstacles to an open Xbox are legal and financial, not technical. If Microsoft’s goal were simply to make Xbox development tools more widely available, they could do that in a matter of months, just as the PC platform is open to development by anybody. What Microsoft wants to do is open up Xbox development to a wider audience of gamers without relinquishing their monopoly on access to the platform for developers. That way they can be sure to get a cut on each game released.
Now, you can make a plausible argument that such a strategy is necessary for Microsoft to recoup the fixed costs of creating the Xbox. But what can’t be denied is that Microsoft’s strategy imposes a real dead-weight cost on the overal value of the platform. There will be games that don’t get made because the prospect of developing new games for a few thousand other hobbyists won’t be as attractive as developing a game for millions of ordinary Xbox users. And there will be games that are made, but which ordinary users will be prevented from playing by Microsoft’s platform restrictions.
Whatever advantages a closed platform strategy might have, they need to be weighed against these very real disadvantages. Microsoft’s restrictions on entry into the Xbox market is shrinking the economic pie relative to how large it would be if anyone was free to create games and publish them for anyone else to play. Obviously, if that’s the cost of getting the Xbox in the first place, that’s probably a price worth paying. But if Microsoft would have been able to turn a profit on the Xbox without those restrictions, which I think is pretty likely, then enacting laws like the DMCA that make closed platforms easier to maintain is bad public policy.
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