Counting Rupees: The Network is the Platform

Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

"The Network is the Computer" - John Gage, Sun Microsystems, 1984

When John Gage said this in 1984 it was a fairly controversial statement. Computers were getting smarter and more powerful and seemed to be moving away from the DUMB terminals of the past to more application-oriented, personal computing. At the time, most people probably weren't considering that an incredibly powerful, pervasive, interconnected web of servers and computers allowing for petabytes of data all over the world to be stored, accessed, manipulated and interacted with, would be used by more than 20% of the world's population, and nearly 75% of the US population. Looking at where we are today, his words seem fairly prescient. Not that the technology and power in computers hasn't also been improving at an astonishing rate, but there's certainly been a shift in how people use computers as internet penetration has increased. After all, would things like the iPhone or EeePC or Mini 12s or email terminals really serve much of a purpose if not for their ability to connect to a network?

So, what does this really have to do with gaming? Well, there's certainly been some interest in creating web games, ranging from incredibly simple but fun diversions like Desktop Tower Defense, to more complex first-person shooters like Fallen Empire: Legions or the Quake 3: Arena remake, Quake Live. But this is really just the start.

Recently, people have been mostly puzzled as to why Microsoft would continue to try and keep "Games for Windows Live" alive when it was so unpopular when it launched. Indeed, people were not very interested in paying for services that they were already used to getting for free. A few months ago, Microsoft had to scrap the idea of making people pay for the service and now, more recently, it has launched a new client for it. Judging from the response, it doesn't seem like most people care about the service. What's Microsoft thinking here?

Convergence.

This means a few different things. To begin with, digitally downloadable content, both large and small, is now being regularly served. Both Sony and Microsoft have been releasing past console content on their machines, and Sony has actually moved on to full-blown PS3 releases, including the previously disc-only game, Burnout Paradise. There are now some rumblings indicating that Microsoft may intend to do the same.

While it's unlikely that the next generation of consoles will completely forgo disc-based media, downloads are quickly becoming a much bigger part of the experience. Some games, such as Rock Band 2 and Gears of War 2, are now shipping with codes for free downloads. This isn't because the publishers like you and want to give you free stuff. It's part of a larger strategy to increase the importance of the online presence, where content can be tightly controlled and decrease the importance of physical media, and thus, used-game sales and rentals. Once a code is used it essentially ties the content to your online account and therefore a secondhand buyer will not be able to take advantage of it. Eventually, the same will likely be true for all content, even if it doesn't specifically require you to enter a code. Both online and disc media will act in exactly the same way by registering a specific game to your account, making the disc itself virtually worthless. We already have this in the PC-space with services like Steam. Whether you buy a Valve game in a store or through Steam itself, you still end up having to register your product through Steam, and launching your product through Steam.

The benefit of this, of course, is the ability to play your games anywhere you have access to your Steam account, or the ability to simply re-download whatever registered games you want on the service for as long as the service exists (even if you lose your original CDs/DVDs). With so much content already downloaded to 360 hard drives, I imagine Microsoft's customers probably wouldn't be too happy to lose all of that content with a new console release. Because of the fact that this kind of content will no longer be able to be sold or handed down so easily anymore (unlike consoles of old), backwards compatibility, at the very least for downloaded content, will probably become much more important. But at the same time, it's very likely that Microsoft (and Sony) will be moving in a direction that ties games to specific accounts rather than to a disc, just as Steam does already.

But this is where Games for Windows Live comes in and potentially gives Microsoft a major advantage in the next generation of console wars (over Sony, anyway ... Nintendo is a matter for another column). Microsoft already allows some interaction between Games for Windows Live and Xbox Live users, including a few games that have cross-platform multiplayer available. The next step would be for Microsoft to actually leverage its Windows platform and allow Xbox games to be played directly on a PC. This could possibly start with a client that allows some Xbox Live Arcade games to be played on Windows, but eventually Microsoft could support full releases on it as well. They could offer a certification that allows computers to be advertised as "Xbox-compatible" to ensure that particular machines could run new Xbox-branded games (Microsoft could even make it a requirement to run the games). Then Xbox users would have the freedom to basically take their games anywhere ... On their TV, a friend's TV, their desktop PC, maybe even a laptop. As long as they can login to their Live account, they can access their games. Suddenly, Microsoft doesn't need the money from "Games for Windows Live". They can just get it from "Xbox Live" users, whether they are PC or console users.

In this way, "Xbox Live" ends up being the standard. Yes, a specific kind of hardware configuration would also be required and could even evolve, but the real access to running your games comes from Xbox Live. The network is the platform.

As co-editors of A Link To The Future, Geoff and Jeff like to discuss, among many other topics, the business aspects of gaming. Game companies often make decisions that on their face appear baffling, or even infuriating, to many gamers. Yet when you think hard about them from the company's perspective, many other decisions are eminently sensible, or at least appeared to be so based on the conditions at the time those choices were made. Our goal with this column is to start a conversation about just those topics. While neither Geoff nor Jeff are employed in the game industry, they do have professional backgrounds that are relevant to the discussion. More to the point, they don't claim to have all the answers -- but this is a conversation worth having. You can reach them at