Technologizer

Evidence that the Wii will become a $200 console is piling up, with the latest rumor coming from Best Buy management. Engadget scored a screen grab of a company letter, warning that the price drop will happen on Sunday, following an official announcement this Friday.

Alongside price cuts for the Playstation 3 and the Xbox 360 Elite, this is great news for anyone looking to buy a gaming console this holiday season. But even if you’ve got the itch now, consider holding out for the inevitable software bundles that will follow.

The Best Buy letter notes that stores should “use bundle bands to create bundles that tell a story and truly meet customers’ needs.” I’m not exactly sure what it means to tell a story with products, but I’ll bet Best Buy will try tacking on games and extra controllers to get you spending a little more. Those deals can work out in your favor if you are, in fact, buying the same things you planned to purchase a la carte.

Another thing to watch for are official bundles from the console maker. Ars Technica has a rumor that Xbox 360 Elites will include two games, Pure and Lego Batman, for the same $300 starting in mid-October. Sure, those wouldn’t be the first two games I’d choose, but for the same price tag they do sweeten the pot. I wouldn’t be surprised if Sony and Nintendo started offering their own added incentives.

Just remember that your brand new gaming console is worthless without at least one game, and it’s not as fun without two controllers. As the holiday shopping season approaches, keep an eye out for bundles that will save you from spending too much beyond the console’s initial price tag.

With Sony launching the download-only PSP Go next month and Microsoft recently launching premium game downloads over Xbox Live, the seeds are planted for a fully digital future.

For the most part, I’ve viewed this as a good thing, but an editorial by Jim Sterling at Destructoid today gave me pause. Entitled “Fearing the future of digital distribution,” Sterling argues that digital distribution, for all its convenience, will come at a price. Game publishers will dominate the marketplace, Sterling writes, offering no refunds, no used game sales and “no accountability whatsoever,” merely because they can. I disagree.

The current behavior of Microsoft and Sony make for inviting red flags in Sterling’s argument. The Xbox 360’s Games on Demand — downloadable games that also sell at retail — are often more expensive to download than they are on disc. And Sony will sell downloadable PSP games that cost more than their boxed counterparts. “The games industry will set its own price at whim, and without any more alternatives, consumers will have no choice but to pay whatever they’re told to pay or simply stop buying games altogether,” Sterling writes.

The problem with this is that it’s based on limited examples. Though Sterling acknowledges that doom-and-gloom is only one possible outcome, it’s hardly the most likely.

Downloads won’t dominate unless consumers endorse the idea, and that requires incentives. Without a reason to go digital — for instance, better value over a hard copy, or rewards for loyalty — consumers will stick with Gamestop. Publishers, in turn, won’t fully commit to digital because there’s no market for it.

Even if console makers slowly grab more market share with downloads, to the point that physical media is out of the equation, it won’t mean the end of competition. In fact, it’ll create more of it. I see a future where a gaming console isn’t only about the best graphics and most exclusive games, but how much value exists in the digital marketplace.

The store that treats its customers the best and offers the most incentive to shop will prosper, while the oppressor will find a smaller audience overall. That’s nothing to be afraid of.

Another day, another stab at the Xbox 360’s failure rate.

This time, the estimate comes from Square Trade (PDF), a third-party electronics warranty company. Based on customer reports, the company says Microsoft’s game console has a 23.7 percent chance of dying within two years of purchase. Half the errors reported to Square Trade involved the infamous Red Ring of Death.

Overall, the Xbox 360’s one in four chance of failure makes it far and away the most unreliable console on the market. By comparison, 10 percent of Playstation 3s were defective, and 2.7 percent of Wiis needed repair.

SquareTrade is the same company that in February 2008 said the Xbox 360 has a 16.4 percent failure rate, and we’ve seen other estimaes all over the map. In 2007, GamePro talked to some EB Games and Best Buy employees, who generally estimated that a third of all Xbox 360s had to be sent back for repair. More recently, Game Informer conducted a poll of readers, 54.2 percent of whom said they’ve dealt with an Xbox 360 hardware failure.

The funny thing is, you tend to be skeptical of such high estimates until the Red Ring of Death happens to you. My Xbox 360 kicked the bucket a few weeks ago, and suddenly I started realizing how many friends have gone through the same thing. If someone told me that 99 percent of Xbox 360s were bound to die within 10 years of ownership, I’d be skeptical of the claim, but not overly surprised if it turned out to be true.

Which is why I’d like Microsoft to come clean. Let’s clear the air of all these wildly speculative failure rate estimates and get some precise numbers and facts in order. If I treat my console right, can I expect it to last forever? If not, how long is it before every press of the power button is a crapshoot? And what are the odds that the Xbox 360 will outlast the three-year warranty that comes with every new console purchase?

Of course, I’d be foolish to expect such transparency out of the blue, but I doubt the truth could be much worse than third-party guesstimates and anecdotes. Or is it?

During the first week after Microsoft released Shadow Complex for the Xbox 360, something extraordinary happened: Over 200,000 people plunked down $20 $15 to download the game.

That makes Shadow Complex — an exploration-themed shooter in the same vein as the classic Metroid — the most downloaded single-player Xbox Live Arcade game to date. Compared to boxed retail games, 200,000 sales for a downloadable game isn’t too shabby, either.

There are a few reasons why this is important news. Foremost, at $20 $15, Shadow Complex is expensive for an Xbox Live Arcade game. Prices for these downloadable games have been trending upwards lately, not because Microsoft is gouging its customers, but because the games themselves are becoming more substantial. To put it another way, they’re worth the money you pay for them, and the big numbers for Shadow Complex prove that this trend is worthwhile.

Shadow Complex is also a bigger game, in megabytes, than its peers. For a long time, Microsoft restricted the size of Xbox Live Arcade games to 50 MB. This allowed all games to fit on a memory card so Xbox 360 owners who didn’t buy a hard drive could play along, but it put constraints on game development. Since then, Microsoft has slowly let the size of Xbox Live Arcade games creep upwards. Shadow Complex measures 835 MB, and its strong sales show that Xbox Live Arcade games don’t necessarily need to hold back in file size to be successful.

Finally, Shadow Complex is a good, long-lasting game that returns to the 2-D platforming style of the NES and SNES era. It’s not retro, per se, nor is it a cash-in on an old franchise or a casual game with Wii Sports-like appeal, but it nonetheless caught the interest of Xbox 360 owners. Marketing and hype certainly helped, but so did uniformly positive reviews.

With the cost of big-budget game development spiraling upwards, the games industry is practically killing itself. Smaller, downloadable games could be the way out, provided they’re substantial enough to satisfy hungrier gamers. With all this in mind, we should be expecting and hoping for more games like Shadow Complex.

Microsoft’s never been particularly forthcoming about the Xbox 360’s hardware issues. The company said earlier this year that the worst troubles are behind us, only to see new problems spring up. We’ve never heard an official failure rate (estimates vary, wildly), and after all this time, there’s no way to tell whether a working console is destined to get the dreaded Red Ring of Death.

So Eurogamer did the logical thing and asked a third-party console repairman, and learned that a major problem in today’s console failures is “cumulative damage.” In other words, the longer you own and play a console, the more likely it is to die.

Sony fanboys shouldn’t be laughing: Engineer Darren Thickbroom of Colchester Computers told Eurogamer that he’s seeing more and more Playstation 3 consoles come in for the so-called “Yellow Line of Doom.” Sure, Thickbroom is just one engineer, but his analysis does check out with my own Xbox 360 experience. After almost three years of use, my console suddenly and inexplicably stopped working a couple weeks ago, flashing the three red lights I’d heard and written so much about.

Of course, you can’t blame the console owner for playing the console. What’s really problematic, according to Thickbroom, is the general design of the latest machines, which pack powerful hardware into a tiny container. “Everything’s combined into such a small space, the heatsinks on the GPU are relatively small, there’s a lot of heat to dissipate and it can’t do it,” he said. Over time, the trapped heat warps the console’s motherboard, eventually hitting a breaking point.

Maybe instead of wishing for ultrathin consoles, we should by lobbying for the Playstation 3 Big and the Xbox 360 Fat. I’d rather have a fully-functional colossus in my entertainment center than a slim and sexy brick.

With the Playstation 3 looking slimmer and cheaper than ever, all eyes are on Microsoft to retaliate. Rather than speculate on its own, IndustryGamers polled some of gaming’s crystal ball-holding analysts to find out what they thought.

The question: Do you think Microsoft will release an Xbox 360 Slim?

The response was mixed, with a few strong “yays” and “nays” on each side. That’s to be expected, but what surprised me was how only one analyst, Broadpoint AmTech’s Ben Schachter, flat-out predicted a redesign to complement the upcoming “Project Natal” motion-sensing camera. I think that’s the most likely scenario of all.

Earlier this year, it was rumored that Microsoft would do this, and Microsoft CEO Steve Ballmer goofed up and said as much. The PR backlash that followed left a lot of mixed messages — designed, I think, to squash the notion that Natal wouldn’t work on existing Xbox 360s — but ultimately a redesign wasn’t left off the table.

It doesn’t make sense for Microsoft to redesign its console in the near future, because it would smack of copying Sony. But it does make sense for Microsoft to reshape the Xbox 360 into something less hulky when Project Natal comes around. After all, the casual, non-gamer demographic is what Microsoft is going for with Project Natal, and a slimmer console would look less intimidating in the average living room.

I’ll admit that my opinion is tinged by the mock-ups that started floating around the Internet (pictured above) long before this story came to light. Sure, it’s totally fake just a rebranded PS2, but it kind of looks like the Wii, and I wouldn’t be surprised if “Wii-esque” is the strategy Microsoft adopts if it does plan an Xbox 360 Slim.

Then again, I don’t own a crystal ball.

So, E3 didn’t really pan out as the place to announce price cuts for video game consoles. The rumored PS3 Slim/$100 price cut remains a rumor, and the Xbox 360 is holding steady at $200 for the Arcade model, $300 for the Pro and $400 for the Elite.

Things will reportedly change at GamesCom, a conference in Cologne, Germany, which starts a week from today. While nothing matches the pre-conference hype of E3, we’ve got two rumors that could shake up the holiday gaming season if they come true.

First, Hong Kong gaming magazine GameWave brings word (via Joystiq) that the PS3 Slim will be announced at Sony’s press conference on Tuesday. An earlier report from French media outlet JVN said the same thing, quoting a “dealer specializing in video games” who said a price cut would accompany the announcement. Additionally, MCV wrote that PS3 stocks are drying up in the U.K., signaling a price cut.

We also heard from Kotaku today that Microsoft will discontinue the Xbox 360 Pro, replacing it with the Elite model at the Pro’s old price of $300. The Elite console has double the hard drive capacity (120 GB) and includes an HDMI cable. This rumor also comes from two places: a Meijer catalog due on August 30 and photos sent by Gamestop employees.

Neither rumor comes out of the blue. In June, a reliable source told Ars Technica that the Pro would be discontinued, and said some killer game and console bundles would help move the console off shelves. As for the PS3 Slim, there are simply too many rumors to mention here. Check out Joystiq’s PS3 Slim category tag to see them all.

What does all of this chatter leave us with? Nothing, of course, but I like the idea of GamesCom as the launching point for lower-priced game consoles. The holiday game rush gets its first legs in September, making an end-of-August price cut attractive to fence-sitters, especially if they’re tempted by the latest blockbusters. I’m generally not a fan of these price cut rumors, because they mostly just inflate our expectations with hot air, but this seems like the best possible time to expect things to happen.

A big hoopla was made in the games and tech blogosphere today when Microsoft bragged about its exclusive partnership with Netflix. The agreement brings streaming Netflix movies to the Xbox 360, and not to competing consoles. (Of course there are still plenty of other non-gaming options.)

As Crispy Gamer’s Kyle Orland points out, this exclusivity has been known about ever since the partnership began last summer. In other words, today’s reports messed up. (And for the record, I previously overlooked the deal when asking if the Playstation 3 would ever get Netflix support.)

Nonetheless, I think the question of how long Microsoft will hang on to this partnership is perfectly valid. Microsoft has stayed quiet on that matter, fitting with consumer tech companies’ natural secretiveness about exclusive deals. Understandably, the company doesn’t want people glancing at their watches. If you’re on the fence about which console to buy, and Netflix support is a major consideration, you’d obviously be less concerned if you knew when, if ever, the service would migrate to all consoles.

So you have to wonder who stands to gain the most from the partnership. The advantage for Microsoft is intangible. It’s essentially a selling point for the console, but there’s no way to tell exactly how well this is working. For Netflix, the Xbox 360 is another set-top delivery box, but it’s a big one. In February, Netflix and Microsoft said 1 million people had signed up for a free Netflix trial over the Xbox 360, potentially translating to a lot of new customers.

On the other hand, Netflix is missing out on the opportunity to be on the Wii and the Playstation 3. I’m not privy to the details of the agreement, but as all the consoles get bigger install bases, Microsoft will find it harder to keep Netflix by its side unless it threatens to pull support, which I doubt will happen.

We don’t know specifically how long the deal between Netflix and Microsoft will last, but when the contract expires, I expect Netflix to cozy up to the Xbox 360’s competition.

Come Tuesday, Microsoft will begin selling major Xbox 360 games for download through its Xbox Live service, but from the prices we’ve seen so far, it’s not a sound investment.

Endsights got a hold of the pricing for nine of the 24 games that will be available initially. Using the online retailer Newegg as a comparison (because of its consistent pricing and free shipping), it’s clear that in some cases you’ll pay $10 or even $15 more to download the game than you would to order a boxed copy over the Internet.

A chart, and some more thoughts on Microsoft’s bold venture away from retail, after the jump.

Continue reading this story…

Xbox Live Arcade is no longer a purveyor of quick-hit, $5 video game downloads, but a place where $15 games are beginning to thrive.

That’s what Kotaku found after looking at the cost of downloadable Xbox 360 games, from the console’s launch in 2005 up to last month. The average cost of video game downloads has climbed, especially in the last two years, but the reason is a shift in how many of these games cost $10, $15 or even $20 for a purely electronic copy. The tell-all chart, compiled by Stephen Totilo and Andrew Freedman, is located here.

The rise in prices on Xbox Live Arcade isn’t a bad thing. It means the kinds of available games are richer experiences, coming closer to what you’d get from a boxed title. Braid, an indie game priced at $15, is the perfect example. Same goes for the recently released Sam & Max Save the World ($20) and upcoming Shadow Complex (likely to cost at least $20).

Digesting this, my mind jumped to the iPhone’s App Store, whose free market is a mixture of zero-dollar “Lite” games, $10 offerings from major publishers and everything in between. A recent report by Pocket Gamer found that the average price of top 10 titles is $1.89, while top 100 games average $3.80. So I wonder: Will App Store games get better, causing a surge in prices?

Before I go on, let me acknowledge that I’m totally comparing apples (har har) and oranges. Not only are the two data sets different, but the gaming platforms don’t necessarily lend themselves to the same demographics or same style of play. But my point isn’t to make a direct comparison between two non-competitive marketplaces.

What interests me is how Xbox Live Arcade is cleverly evolving into a place for high-quality game downloads, while the App Store is not. Pocket Gamer notes that the most successful $10 iPhone games are big-name franchises, such as Doom: Resurrection and The Sims 3, but those are just dumbed down versions of their computer counterparts, and even they’re undermined by the amount of inexpensive and simple games available. Meanwhile, Xbox Live Arcade is bringing in entirely new games while phasing out the cheap stuff.

The difference, of course, is that Microsoft takes on a greater role in regulating its market. I’m not saying Apple should do the same, but when it comes time to spend $15 on a downloadable game, I know which market will get my money.

Sony likes to boast that it’s selling “future technology” in the Playstation 3, but let’s be honest, most games hardly show it.

An exception could come from Doom 4, a distant release that will apparently take full advantage of the PS3’s Blu-ray discs. In a Game Informer interview (via VG247), id Software’s John Carmack said the game will “almost certainly” be split into three DVDs for the Xbox 360, while the PS3 version will only require one Blu-ray disc.

This, I think, is more important than any advantage you might see in graphics. Give me a big-screen HDTV, and I’ll generally be pretty happy no matter which console you put in front of me. Making me get up after a cliffhanger moment to swap out discs — twice — is a different story.

The Xbox 360’s inability to store everything on one disc poses other challenges if games begin demanding more storage space. Carmack said another upcoming id game, a racing and shooting adventure called Rage, will need two discs for the Xbox 360 version, but still just one for Blu-ray. It would’ve been easier to split Rage in thirds for the Xbox 360 version, Carmack said, but the game is designed around two major wastelands, so three discs wouldn’t work as well.

Now, think about non-linear games, such as Grand Theft Auto. I can’t say it would be impossible to split this kind of adventure into several discs, but it could be problematic unless each disc contained the entire game world.

On the flip side, Carmack said programming for the PS3 required much more “sweat equity” than the Xbox 360, despite its lack of size constraints. But if game developers someday embrace the roominess afforded by the PS3’s Blu-ray discs, Microsoft will find itself at a real technical disadvantage.

Microsoft left us mostly in the dark at E3 when announcing that Last.fm, the Internet radio station, is coming to Xbox Live. Now, Joystiq has filled in some of the blanks with Xbox Live general manager Christina DeRosa.

Silver-level subscribers — i.e. the ones who don’t pay — can listen for “a trial period” of three hours per month, with occasional video advertisements, DeRosa said. Gold users will get unlimited ad-supported access. A third, commercial-free tier will cost extra.

That’s all good to know, but what’s really interesting is that Microsoft is finally opening the door to ad-supported content. In its current state, Xbox Live is transaction-based. You’ll get a free map pack here and there — and some of them have been sponsored by a third party — but most of the content on Xbox Live requires money, regardless of whether your a paying member or not. Last.fm is either an outlier or a sign of what’s to come.

With Twitter and Facebook integration coming to the service, I wonder if Microsoft has a similar ad-supported plan in mind. It seems likely, considering a recent report by MediaPost that says Microsoft will bring Silverlight to Xbox Live within a year, making it easier for advertisers to get their message onto multiple platforms. If there’s any Xbox Live feature that seems ripe for ads, it’s social networking.

Looking further ahead, could all of this signify a completely ad-supported Xbox Live, as Official Xbox Magazine suggests? I doubt it. My instinct says Microsoft wouldn’t want a free service to cannibalize the paid one, but I can’t say for sure without knowing the ratio of Gold to Silver subscribers, and the company doesn’t disclose that information. I do know that Xbox Live is rich with features, and sticking ads into all its nooks and crannies would be a Godawful mess.

At the risk of beating this story to death, I’m going to dip back into the Xbox 360/Project Natal hysteria to parse out what’s actually been established over the last week. As 1Up wrote after the most recent-back-and forth, Microsoft is “creating reasonable doubt until they unveil their plans.” Here’s how, using the original 1UP story and Steve Ballmer’s remarks along with official comments that followed:

Rumor has it: Project Natal, Microsoft’s 3D motion-sensing camera, will be released in 2010.

Microsofs official statement: The company says “we have not confirmed a launch date at this time.” That could mean anything. It certainly doesn’t rule out a release for next year.

Rumor has it: Project Natal will be sold as a standalone device for the Xbox 360.

Microsoft’s official statement: “Natal will run on Xbox 360 so no new console investment will be necessary.” This wasn’t much of a rumor to begin with, as the technology was showcased on the Xbox 360 at E3, but here’s the confirmation.

Rumor has it: Microsoft will also launch a new console with Project Natal built-in.

Microsoft’s official statement: “We’re not going to be launching a new console any time soon.” This is vague, I suspect deliberately. It’s like that scene in Spaceballs: “When will then be now?” “Soon.” “How soon?”

Rumor has it: The Natal-integrated console will have slightly better hardware than the existing Xbox 360, though publishers will be able to support both platforms simultaneously.

Microsoft’s official statement: “There will be no new console.” Okay, but that could be interpreted two ways. A slight CPU/GPU upgrade with the same interface, running the same software, could constitute a new console. Or it could be considered a different model in the Xbox 360 family, kind of like how some Xbox 360s have HDMI support and bigger hard drives.

Despite Microsoft’s supposed debunkings, there’s plenty of careful wording in the company’s statements, with wiggle room for everything 1UP reported to come true. Or not. Give Microsoft’s PR department a hand for “clarifying” this ordeal — with a smokescreen.

Microsoft’s motion-sensing video game controller will be integrated with a new Xbox 360 model, due to arrive in 2010, according to Microsoft CEO Steve Ballmer.

Ballmer, quoted by TG Daily at an Executive’s Club of Chicago event today, said the console will have a “natural interface” with a built-in camera that can detect movement and voice. That sounds like Project Natal, the 3D motion-tracking camera announced at E3, to me.

Ballmer’s comments confirm — in a roundabout way, perhaps, as TG Daily’s report doesn’t mention Project Natal by name – at least a portion of earlier rumors. 1UP had reported that Project Natal will be integrated into Xbox 360 hardware in 2010 as a rebranded console, along with some minor boosts to the hardware. The motion camera will also be sold as a standalone product for existing Xbox 360s, 1UP’s story said.

This week, the Xbox 360’s director of product management, Aaron Greenberg, halfheartedly debunked the rumors, telling Eurogamer that Natal will run on the Xbox 360 and that “no new console investment” will be necessary to enjoy the motion controller. Another anonymous Microsoft source said the company urged people not to believe the “nonsense on the Internet.” Neither of those comments are firm denials of upgraded hardware, and TG Daily had nothing to report on the matter.

I’ve already talked about why a new console with shinier graphics is a bad idea. In short, the headaches for existing console owners and for game developers would outweigh the benefits of more processing power. But it’s perfectly logical for Microsoft to release an Xbox 360 SKU with the motion camera built in. If the company’s looking to attract new gamers, selling an all-in-one bundle is the best way to do it.

Update: Here’s what Microsoft is saying on the matter; it seems very similar to what Eurogamer got this week: “As the Xbox team stated at E3 two weeks ago, we are not even halfway through the current console generation lifecycle and believe Xbox 360 will be the entertainment center in the home for long into the next decade.  Project Natal will be an important part of this platform, but we have not confirmed a launch date at this time.”

1UP, whose scoop on the PSP Go was dead-on, is now reporting a rumor that Microsoft will release the Project Natal motion-sensing camera standard with its next console. And it’s coming in Fall 2010.

It’s not clear where the information is coming from, but 1UP Editorial Director Sam Kennedy writes that the camera will also be sold as an add-on for the Xbox 360. The new console will only upgrade hardware slightly, and publishers will be able to release games that run on both platforms.

I’ve said before that Microsoft should wait until the next console generation to introduce motion controls. That’ll allow the company to court third-party publishers and launch with the best possible line up of games. However, Don Mattrick , the Xbox division’s senior vice president, said at E3 that Natal allows Microsoft to “leap into a new era of interactive entertainment without having to launch a new console.”

Rebranding the existing wares while offering Natal as an Xbox 360 peripheral represents the best of both worlds. Publishers might be more willing to develop for Natal if they can sell to new and old console owners, and Microsoft could catch up with Sony’s Playstation 3 in hardware power without significant costs.

On the other hand, I’m not thrilled with the possible PC-ification of console gaming. It reminds me of the Nintendo 64’s Expansion Pak, a memory cartridge that improved graphics in some games and unlocked new features in others. Incremental upgrades are exactly what I don’t like about PC gaming. If the rumors come true, I hope Microsoft doesn’t push an upgrade on its existing Xbox 360 user base.

If you own an Xbox 360, consider hanging on to any box that might fit your console, just in case you get the Red Ring of Death.

Joystiq reports that Microsoft will no longer ship out its custom-fitted “coffins” — somehow I don’t think this is the company’s lingo — in which to return broken Xbox 360s. Customers can still print out shipping labels on Microsoft’s dime, but they’ll have to find a suitable transport container themselves.

Microsoft’s confirmation is a change of course from what Joystiq learned in March, when a representative denied that customers weren’t getting the option of a coffin. All customers from every region around the world got to choose a prepaid label or a container with the shipping label appended, the representative said back then. The new policy went into effect on May 26.

A Microsoft representative told Joystiq that this move will “expedite the shipping process” because there’s no need to wait for Microsoft’s packaging, but you should be able to recognize the spin from a mile away. If killing the coffin is meant to help the customer, some sort of box should at least be optional for people who don’t have one sitting around. Its more likely that this is a cost-saving measure.

Joystiq recommends using any old box to ship a red ringed Xbox 360, but that raises more concerns. Are customers then expected buy packing peanuts or bubble wrap to keep the console secure? If not, what if some other component of the console breaks in transit? I’m going out on a limb here, but Microsoft could face either higher costs to repair additional parts or another PR nightmare when customers have to pay more to take care of a problem they didn’t cause.

The big takeaway? Either Microsoft is getting really stingy, or the company has been shipping a lot of boxes.