It doesn't. However, it's obvious that if you have a larger user base you'll have a larger number of people willing to pay the fee.

Anyway, I'm just playing Devil's Advocate as I hate online gaming and will never use it whether it's free or has subscription fees.

Exactly. Broadband users are still in the minority of internet users. Broadband isn't even available in many areas, and it's still to costly for many people. The X-box and the PS2s broadband only games like Socom, limit their potential user base to those with broadband, and then some companies want to charge another fee on top of this.

Basically mainly only gamers that already have broadband are going to jump on the bandwagon.

People still using dial up are going to be hesitant to pay $40 a month for broadband and then pay more fees to play certain games (or all games on the X-box).

I think the X-box will have more success than the PS2 though, as I bet a larger percentage of X-box owners have broadband than PS2 owners. The X-box is a tech geeks wet dream. But then again, the PS2 user base is so much larger that a percentage comparison is useless, as 10% of PS2 owners is probably a larger number than 50% of X-box owners.

At any rate I don't see online gaming being much of a success this generation. Broadband just isn't widespread enough. Maybe it will do better next generation, if broadband costs get down to $20-25 a month.

However, I also don't think it will be a flop. I figure the companies will make enough to cover the cost of providing the online gaming services, and maybe even make a small profit. It's just not going to be a huge, profitable success this round IMO.

Spanky: 50% of Xbox owners have broadband Internet.

Everquest proved that if you have the best product on the market, you can get 200,000 people to subscribe. Of course, there are other MMORPGs that have gone offline or are losing tons of money because they weren't successful. I think online could be a selling point for mainstream gamers if it's free, but only the hardcore will pay a monthly fee for it, and the hardcore are few.

The numbers that support Everquest simply don't make for good console sales. If XBox Live only gets 200,000 subscribers, I can't imagine them ever making the thing profitable. I know some people believe Microsoft is willing to lose money forever because they have "deep pockets," but it seems unlikely to me.

I think Microsoft just made this number up. I can't imagine they have any idea whether XBox owners have broadband.

Certainly, 50% of XBox owners in Europe and Japan don't have broadband; very few people have broadband in their homes in Europe, and the internet never really caught on in Japan.

They may have done some sort of scientific poll to get this data, but it sounds made-up to me.

I agree. It's not going to be a huge success in this generation. It will probably be profitable but not a massive success. I don't think Microsoft expects online to be a huge success in this generation and they've said as much in numerous interviews with analysts. They only project a user base of 50,000 in the first year of Xbox Live and considering 50% of current Xbox users already have broadband access, I'd say that's a reasonable goal. I don't think anybody is saying it will be mainstream in the near future.

Your mistake is that you believe Microsoft expects to get the mainstream to sign up for Xbox Live. This is not true at all. Long-term (like 4-5 years) they may hope to attract some casual gamers to Xbox Live but for the first few years, they are definitely targeting the hardcore market. They've been quoted to that effect any number of times when talking about their online plan. As mentioned before, they expect only 50,000 users in the first year. That's a fraction of the total Xbox user base. Quite a conservative estimate and probably quite attainable.

Have you ever registered a product before? That's one of many ways companies get this information and it is quite scientific.

Do people actually register their stuff? I can't think of a single person including myself that actually does it. I never registered my Xbox.

As far as 1/2 of Xbox owners having broadband, that number has to be greatly inflated. Broadband is gaining in popularity, but there is no way it has near that many users yet. I know three people out of about 50 with internet access that have broadband. There was a fourth, but he dropped it when Time Warner raised the price a few months ago.

No. I don't think I'm alone here either.

That is a prime example of 'anecdotal' evidence. It just so happens that every one of my friends does have broadband. Does that prove anything? No. Hardcore gamers (which is the group which currently makes up most of the Xbox install base) are early adopters of technology. I does not surprise me in the least that 50 % of current Xbox owners have broadband. Do most casual gamers or the general public have broadband? No but they don't constitute much of the current Xbox install base.

Your right. You're not alone. However, companies do not need everyone to register in order to get an accurate picture of their user base. How do you think that the broadcast networks are able to declare a winner in the presidential election long before all the votes are counted? There is a proven formula used by companies conducting polls which allows them to derive a reasonably accurate number based on a small sampling of people.

I don't buy that. I don't know what type of person registers their products but those people are NOT a good representation of the population.

... not exactly the example I would have chosen... -smile-

Exit polls are completely different from compiling data from product registrations. Most people probably don't register products, and to base data on that doesn't necessarily indicate anything about the entire market.

What's more, broadband is very uncommon outside of the US right now. Some businesses use it in Europe, but it doesn't get to a lot of homes.

What's more, gamers with broadband are already playing online games free on their PCs. Why would they pay to play online on their XBox consoles?

I think online will end up being like 4 player multiplay; it will be an extra selling point for games, but it won't be an additional moneymaker.

It's not all that common inside the US either. I know for a fact that there's no decent broadband service in the Lehigh Valley area and I couldn't get broadband in northern NJ (a highly populated and affluent area) until a few months ago.

For the Xbox 2 I think a company that makes all their own hardware should make them - like IBM or even have MS pump a little money into nVidia so they can create the mainboard and the graphics chip and maybe expand into the hard drive market - that way maybe Microsoft can make money on each console rather than giving them away... that's been a key point of success for Sony and Nintendo in the past. Microsoft maybe spread themselves too thin by having 3rd parties assemble their consoles. I'm sure they've got inmates assembling them and are only paying them 30 cents a day. That's how they used to have their software packaged iirc.

So Microsoft's 'anecdotal' evidence is better than mine huh? I would love to see some real evidence from Microsoft to prove their 50% claim. The national average is still under 20%.

The Hardcore gamer thing is weak as well. I might believe it with PC gamers. You spend two or three thousand on a PC and the extra $50 a month for broadband seems less a problem. However, we are talking about a $200 console. I don't see how being a hardcore console gamer makes you automatically have broadband. Also keep in mind that the Hardcore group is not going to make up 50% of the Xbox owners. Most (as with all consoles) will be casual gamers and I doubt online gaming is going to be that much of an issue to many of them.

I will wait and see once Xbox Live is rolled out. I would bet money that the 1 million user goal is going to be a tough one to reach though. My opinion is still that Microsoft is heavily overestimating what their online service will do, but time will tell.

I for one will be among those that have broadband, but will still not play games online. That goes for PS2 and Game Cube as well.

Well put. Here's another analogy.

It will basically be like extra features on a DVD. They are a bonus for people who were already planning on buying the movie, but not many people buy the movie because of the extra features.

Online gaming will be the same. It will be a plus for those who buy the game, but not many people are going to buy the game specifically for the online play.

Obviously that doesn't include online only games like Everquest or FFXI, but only games with an offline and online mode like NFL2K3 or an FPS.

Well, if I buy Smash Bros or Twisted Metal, multiplay is a big part of that. Likewise, when I buy Warcraft 3 for my PC, multiplay will be more than just the extras.

If Smash Bros. was single player only, I wouldn't buy it. The multiplay sells that game. Online will probably be the same thing. I probably wouldn't buy a shooter for the PC with no online features, and, in the future, people probably won't buy console shooters without online support either.

DVD extra features are more an excuse to ratchet up DVD prices. Features are dirt cheap, and buyers justify paying $29.99 instead of $14.99 because you get to listen to the director complaining about how bad the caterer was for two hours.

You think the national average is the same group of people who own Xboxes?

Why all this hostility toward such an excellent plan by MS? I don't get why everyone wants it to fail?

I registered my xbox when I had broadband.

I sold it to someone that doesn't.

The surveys are wrong! All wrong!



Seriously folks. MS is going to need something amazing to make the network worth producing titles for. Oh yes, I nearly forgot, developers will settle for the cash on the spot and not worry about the user base. Nevermind. It's all good.

Ever heard of a field of study called 'Statistics'? I used the election analogy because everyone is familiar with it. Have you ever noticed what percentage of precincts have reported when they declare a winner? It's usually much less than 10%. How do they work this magic with so little data? By using a statistical formula just like every company does when they are compiling data on their user base.

No, my point is that anecdotal evidence doesn't prove anything.

Actually, until a week ago, it was a $300 console. Who are the early adopters of consoles? Anybody will tell you it's hardcore gamers. When Microsoft claimed that 50% of Xbox owners have broadband, they were talking about their current user base as of last week. At that time, the vast majority of Xbox owners were hardcore gamers. Obviously, in the future, that 50% number will come down as more and more casual gamers buy Xbox. But that's in the future, not now.