Why did the Yaroze fail? Exclusivity was part of the problem. While the system technically let anyone with a computer and a few hundred dollars develop for the PlayStation, the games were only playable by a few thousand other Net Yaroze users. To get a game out to the millions of PlayStation users worldwide, a Net Yaroze programmer still had to go through the established gauntlet of publishers and retailers. This made it hard for the small, quirky games developed on the system to gain a following.
The system was also hampered by technical problems. Games for the Net Yaroze had to be squeezed onto the PlayStation's internal RAM, meaning they couldn't be much larger than a few megabytes in size. It was still possible to make very impressive games within this constraint -- the original Ridge Racer is run completely from the RAM, for instance -- but creating expansive games with detailed art or vast levels was tough. The Net Yaroze also reportedly lacked some of the more advanced hardware and software features of a full development kit.
What can Microsoft learn from all of this? The first lesson is to make the system as accessible as possible. Microsoft has indicated a vision for a "community arcade" where developers can "share this stuff with people online, potentially sell it in time to people online," but it's not yet clear how this system will manifest itself. Anyone with Xbox Live should have access to anything created by XNA developers, without additional hardware or subscription fees. If Microsoft puts up too many walls to distribution, it could prevent a hot game from finding its niche and breaking out into the mainstream..
Another lesson is to give XNA developers some form of support structure for their projects. Net Yaroze users could collaborate on a Sony-supported web site, sharing tips and routines and working together on problems. Microsoft's "creators club" will offer a similar environment for XNA coders to develop and thrive. They should make sure this club has full support and information from Microsoft engineers to make it invaluable to XNA coders.
Given Sony's history with Net Yaroze, could a similar system for the PS3 be in the works? Sony has hinted that homebrew Linux coding will be allowed on the system, it remains to be seen if this sort of development will be encouraged or merely tolerated. Nintendo has also hinted at support for indie developers on its virtual console, though how these games would be presented next to Nintendo's massive library of classics remains to be seen. Overall, though, it seems the environment for independent development on consoles has never been so open and potentially fruitful.
Read -- Net Yaroze on Wikipedia
Read -- Sony Net Yaroze FAQ
Read -- May 28, 1998 N.Y. Times article on Net Yaroze