Consoul's Blog Consoul Games: September 2006

Tuesday, September 12, 2006

New & Used: are you entitled?

The rumour that Sony are preparing to implement an "entitlements" system for PS3 has been going around for a while now and the widely held belief is that it's a knock-off of XBox360's "achievements" system. Well, I don't believe that to be the case. I think Sony's entitlements are more analogous to XBox360's Microsoft points. They're for currency - not vanity.

The entitlement system may well be a key part of Sony's plan to shake up the videogame market and solve a growing problem in the industry: the used game market.

Anyone who has been to an Electronics Boutique recently will have noticed just how the pre-owned game market has changed. There was a time not long ago, when all used games were significantly cheaper than new ones. Now you'll find used games on EB shelves for only $5 or $10 dollars less than the brand new copies. EB have worked out that many consumers won't care if a game is pre-owned if it saves them a few bucks. Indeed, on many occasions, I've seen EB clerks actually suggest that customers fronting up to buy new games buy the pre-owned ones instead.

So what's the problem exactly? Consumers can purchase the games they want for a few dollars less, and when they don't want a game anymore they can take it to EB for a bit of trade-in credit, and someone else can buy it for cheaper than retail. That's all good right? Well, no.

Think about piracy. Most of us accept that piracy isn't good for the industry. The industry has worked with law enforcement agencies all over the world to try to put a stop to commercial pirates who profit from the sale of illegally reproduced games. We all understand the reason why: Developers and publishers don't make a cent from pirated games. That's obvious.

Now take another look at the used game market. Developers and publishers don't make a cent from used games. There's a huge amount of money being made every day from the sale of used games, and the people who made and published the games aren't seeing any of it. Of course the game stores want you to buy their pre-owned game instead of the new one. Which one do you think they're making more profit out of? Developers and publishers see the used game market as a commercial threat in much the same way as piracy. The only significant difference is that piracy is illegal, whereas trading in used games is not.

It's a situation that the industry has begrudgingly accepted. You as the consumer do have the right to sell the game you bought. Sony are looking for a way to reconcile the consumers right to sell, and the industry's desire for a piece of the action. Entitlements may be the answer. Sony's chief technical officer, Mayasuki Chatani, recently filed a variation on of one of their previously lodged patents. It's called "Incentivizing software sharing through incentive points". You can read the full patent here, but the abstract tells us that the patent covers:
"A method for incentivizing sharing of a software product through awarding incentive points utilizing unique identifiers including removable storage identification, user console identification and user identification. The granting of access permissions and the awarding of incentive points are facilitated through a host server."

Thanks to an in-depth analysis of the patent by Panajev at NeoGAF, it's evident that the patent describes a system where gamers are actually encouraged to pass on game discs that they have tired of. You'll be rewarded with points for doing so. While the patent never actually uses the word "entitlements", it's clear that the points in question are an online currency:
"Points have value, and may, for example, be redeemed for rebates on disc purchases, publisher promotional items, updated versions of discs or user consoles, or may be traded among users."

Well, isn't that lovely? Sony want us to play nice and share. It must be time for DRM to rear it's ugly head. The system outlined in the patent relies on a set of unique identifiers and a centralized network. Each game disc will have it's own unique ID code, as will the consoles and the gamers themselves. When you first switch on your console, the setup process will have you establish a gamer ID (in much the same way XBox360 has you create a "gamertag") and the first time the console goes online, it will register you and your console's codes with Sony's centralized servers.

Any discs that you play from then on will be registered against your gamer and console codes. That way Sony can keep track of who originally bought a game disc and who has played it subsequently. The original purchaser of the game will be authorised to play it. When that disc finds it's way into another gamer's console however, that gamer may or may not be entitled to play it.
"The DISC UNIQUE ID 230 uniquely identifies the disc 110. The contents of the disc 110 cannot be played on the user console 115 or other devices without access permission for the disc 110."

Permission to access the disc content is granted by the servers on the Sony network. The exact details of the circumstances under which permission would be granted or denied aren't clear, but would certainly be based on the records in the Disc Database.

Among the information stored in the Disc Database are fields called "user ID", "user consent" and "transfer charge". "User ID" is the current owner of the disc, "user consent" is who the owner authorizes to use the disc, and "transfer charge" is a point value indicating how much payment the owner should recieve for transferral of ownership. The definition of the "transfer charge" in the patent is broad enough that it can encompass there being no transfer charge at all, if, for example, you just wanted to give a game to your friend. However, "other charges" are mentioned (though not detailed), which may involve fees paid to Sony and/or the game publishers/developers for the transferral of ownership. In this scenario, your friend would still need to pay some amount to 'activate' their ownership of the game, and you as the original owner would receive some reward points for your part in sharing the game with the community.

So every time a game changes hands, Sony and the game's publishers and developers can potentially profit from it. Better still, the system actually encourages you to share your games by rewarding you with entitlement points. Ingenious, eh? The profit that game stores are currently making from used game sales can instead be split between the seller, the publisher, the developer and of course Sony. The downside is that there may no longer be a way of giving a game to someone else without them having to pay for it.

No doubt you're already thinking that the whole system can't work if the console isn't online, and to a degree that's true. Consider however that every PS3 has a hard drive capable of caching data from it's last exchange with the network, and indications from the XBox360 suggest that the majority of next-gen console owners will be online. Furthermore, just like the process of registering and authenticating software in the PC world, less elegant alternatives to automated online registration can exist (authorization codes issued by phone for example).

Rumours suggest that perhaps this system will only affect online play. You may be able to freely play the used game that was given or sold to you, but when you first take it online, you could be prompted for a payment (in entitlement points) to activate it for online play. In the context of a free online gaming environment (unlike XBox Live Gold's subscription service) that doesn't seem unreasonable.

Keep in mind that none of this is confirmed for PS3, PSP or PS2. This is just speculation on what Sony may be planning based on the content of one of their patents. It certainly would punch a hole in EB's share price if true.

Thursday, September 07, 2006

PS3 Delayed. Again.

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The curse of the worldwide launch strikes again. Yesterday, as eager fans across Europe and Australasia counted down the 71 days until the PlayStation3 launch, Sony issued a press release:

Sony Computer Entertainment Europe (SCEE) today announced that it would revise the launch date of its PLAYSTATION® 3 computer entertainment system in the PAL territories of Europe, Russia, Middle East, Africa and Australasia from 17th November 2006, as previously announced to March 2007.

Launch dates for Japan and North America will remain the same, which are November 11th and November 17th respectively.

The revision of the launch date in the SCEE territories is caused by the delay in the mass production schedule of the blue laser diode within the Sony Group, thus affecting the timely procurement of key components to be utilised in PLAYSTATION 3.

Reset your clocks. March 2007: that's six months away. Just when PAL gamers were beginning to think they weren't going to be treated as an underclass in the next generation, they get punked again. You can almost hear the echo of Microsoft's "simultaneous worldwide launch" for XBox360. That ended up taking four months to reach Australia after the US launch.

Not surprisingly, yesterday's announcement was not well received. It was only a few months ago that the launch was delayed until November. Yesterday's news that PAL gamers would have to wait until March next year caused an explosion on the Australian Playstation forums, with the forum moderators inexplicably becoming the targets of so much misdirected anger. The European Playstation forums actually went offline, collapsing under the weight of rampaging fanboy lynchmob.

In reality, no-one would be more disappointed than Sony themselves. Kissing goodbye to the Christmas sales across PAL regions has got to hurt. Knowing that they're delivering those sales to Microsoft and Nintendo on a platter would only make the aftertaste that much more bitter.

As revealed in the press release, the low production yields of the blue laser diode (the key component of the PS3's Blu-ray drives) are the reason for the delay. Sony just can't meet their production schedule. While the launch dates for the US and Japan haven't been pushed back, the news isn't good for those regions either. The number of consoles available for launch has been slashed; the US will only have 400,000 available on day one and Japan will have a mere 100,000. The total number of PS3's expected to ship before the end of the calendar year has been halved from 4 million to 2 million.

Sony's dominance is looking increasingly shaky. Xbox360's user-base continues to grow and it's games are steadily improving. Nintendo's Wii looks set to attract sales with it's innovative control scheme and low price point. PlayStation3's high price and late start into the next-gen race could be serious hurdles in Sony's way. If Microsoft were to drop the price of the 360 before Christmas, PS3 would certainly have a hard time gaining market share.

My own plans to pick up a PS3 in Tokyo on November 11 don't look too good now. There won't even be enough PS3's in Japan to cover the pre-orders.

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PAL May Cry:
one disappointed fan's reworking of the "This is living" European PS3 slogan.