Counting Rupees: Once bitten, twice shy
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
This past week, my 360 finally gave up the ghost. It began with an occasional hard freeze, and a day later was freezing every two or three minutes – a tell-tale symptom of impending red rings of death. Unfortunately, my Xbox exhibited all of the symptoms except an actual series of red rings: a problem that, as the Microsoft support agent informed me, meant that my device was no longer covered by the extended warranty. There goes $99. A series of problems sending me e-mails (and later the actual shipping box) have cost me at least a month of playing time ... during the busiest gaming season of the year.
The point is not to complain about my problems per se – I'm hardly the first gamer to have experienced these issues and I'm sure that I won't be the last. But since I haven't been playing, I've had a lot of time to think about the implications of these issues on hardware manufacturers, publishers, developers, and even retailers. Do my problems matter to the businesses that care about me?
By one standard, they clearly aren't as important as I'd like to believe. The 360 hasn't outsold the Wii yet, but it's standing above a respectable 20M units sold despite all of the negative publicity. I paid my $99 grudgingly, but I definitely paid it, and I plan to continue gaming uninterrupted as soon as my box gets shipped back from Redmond. As much as I might grumble, the financial and personal impact hasn't altered my day-to-day behavior significantly.
Of course, this is mainly of interest to Microsoft. The remainder of the players in the gaming industry is probably less pleased: I was planning on purchasing at least 5 games for the 360 this month, including Gears, Fallout, Sonic, Mirror's Edge, and potentially several others. That's $300 in lost revenue for a GameStop to share with the publisher and developer of each of those games, and when you consider the magnitude of the problems experienced by the 360 over the past few years, we're talking about a significant amount of money. At best, I'll get them later (probably at a reduced price); but gaming is a fast-paced industry and the hot game of today is likely to be in the bargain bin next month. I may never get around to playing some perfectly good game simply because of this.
And at the same time, my long-term behavior is likely to change. I didn't buy a 360 at launch out of a fear of this very same problem; in fact, I was reasonably certain that most of the hardware issues had been ironed out by the time I went to my local Best Buy. So when the next Xbox comes out, I'm going to think long and hard about whether or not it's going to make a good investment. And to the extent that I do decide to buy, it's going to be considerably later. This is probably going to ripple down the chain as well; consoles rise and fall based on their publisher support, and to the extent that the consoles launch more slowly than expected, there may very well be a problem.
So what's the answer? I'm not changing much in the near future. I'll still play my 360, and I'll still enjoy it. But there will definitely be an impact on my spending in the future, and I'm less inclined to trust Microsoft for charging me to repair a well-known manufacturing flaw in their already expensive product.
As it happened, I received an e-mail as I typed this, informing me that my 360 had just been received by the support center. Let's be honest here: most of us will be making a purchase decision based on the games that are set for release for a given device, not purely on their technical stability. But manufacturers would be fooling themselves to pretend that each generation represents a clean break with the previous one. Once bitten, twice shy.
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
