Beyond all the talk of watching the televisions and dogs in Call of Duty, Microsoft’s internet connectivity and software authorisation strategy for the freshly unveiled Xbox One has been a major point of discussion on the console, partly because they involve some arguably anti-consumer decisions with respect to Digital Rights Management (DRM), but also because the company has failed to communicate these new and unproven conditions in an easily understandable way.

Read on as we explore and attempt to make sense of the Xbox One DRM situation; what it means with regards to offline gaming, second hand sales, and general consumer inconvenience, and consider whether there are legitimate justifications for the added security, of it it’s just a play for customer lock-in and anti-piracy.

"We could argue that stamping out piracy will result in enough additional games purchases to justify bigger development budgets for higher quality titles"

Where are the third party reports advocating that piracy has a direct relationship to lost sales? I was under the impression that there has been no conclusive evidence to support that theory, in fact the opposite may be true (please enlighten me if im mistaken). Most download because they can, can't afford it, already own it in a different medium (console owned downloading pc cause they feel entitled) or simply want to try the game before purchase as they have been burnt in the past from marketing hype. If they couldn't obtain it for nothing they would simply go with out; it's not a lost sale and most definitely no where near a 1:1 relationship of pirated copies being lost sales which some publishers throw around.

In contrast a second hand sales from something like gamestop or EB, from a publisher point of view, is 100% lost sale. The consumer spends $5 to $10 less yet the publisher will get $0. As far as a publisher would be concerned used game sales is worse than piracy. This model is purely to stamp it out OR to get a healthy cut possibly leading to a heavily controlled market. It'd be like Holden/Ford demanding people send a cut for every used car sale - Im sure they'd love to do it too.

I really hope consumers are smart enough to see the writing on the wall. Seriously if your wanting a gaming console PS4 looks to be the much more consumer friendly one - i really hope sales reflect that.

Honestly it's more likely car companies would find a way to prevent 2nd hand sales, than gaming companies backing down from this.

They already do s*** like this:

Automobiles [edit]
Automobiles are often made with certain parts, such as car stereos, which might be interchangeable. Sometimes the manufacturers will attempt to create lock-in by various means; in the case of a stereo, they might make the stereo unit an unusual size and shape instead of a standard one[dubious – discuss], or create a unique way for the dashboard part of the stereo to control a CD Changer in the trunk. Other ways include combining other required components into parts that are often replaced. Many GM vehicles send airbag warning signals to the radio. When the radio is replaced with a non-GM radio, the warning system will no longer work and the airbag system may stop functioning altogether. Either a GM radio must be used or a reverse engineered adapter must be wired in.
Various standards organizations, such as the US Department of Transportation, regulate the design of certain automobile components to prevent vendor lock-in.

http://en.wikipedia.org/wiki/Vendor_lock-in

Guess my WiiU purchase wasn't a bad move after all.

Yer but that is to do with modifying a car. You already can not to do that with games, well you're not supposed to be anyway. s*** look at mods, very few games actively support modding these days - well none that i know of on consoles, instead you have "locked in" DLC which essentially is what you are making a comparison to.

I was trying to make a comparison that if you sold/gave away your car you'd have to send ford/holden a % cut. That's effectively the system MS are trying to introduce.

just buy a ps4 instead. they are both running the same hardware ans sony is more game focused. do it.

Where are the third party reports advocating that piracy has a direct relationship to lost sales?

http://en.wikipedia.org/wiki/Devil's_advocate

When I get a next gen console, it will be a PS4 for sure. I do not like microsoft trying to control all aspects of 2nd hand sales. The automotive analogy works well.

How will prices of used game work when all this comes in. Will game discs be $10 to buy because you have to buy the activation when you stick it in your Xbox?

When I get a next gen console, it will be a PS4 for sure. I do not like microsoft trying to control all aspects of 2nd hand sales.

I don't think there's solid confirmation that Sony won't go down a similar route yet, is there?

@ kos
http://au.gamespot.com/news/playstation-4-will-play-used-games-6404263

@ dan

My point was that piracy has absolutely nothing to do with the restrictions apart from misdirection - it's purely an attempt to get control of the used game market.

Cheers Denthor, that's great news. Last I'd heard was just rumours and no confirmation!

PS4 looks to be the much more consumer friendly on

Sony haven't exactly been the most consumer friendly company though.

Still, if I was to buy 1 of the new consoles it would a PS4 or possibly a WiiU, this stuff on Xbox One sounds pretty weak.

Denthor, regarding PlayStation 4 Sony hasn't actually come out with a clear message on how their system will treat used games. The only thing we know so far in regards to DRM is that it doesn't need to be constantly online (which technically Xbox One doesn't either, just needs a check every 24 hours) and will play used games (which Xbox One can do as well).

I believe we will hear more information on both console makers DRM situations through E3 and beyond as we get closer to launch. Hopefully they will be able to give a clear indicator of what the go is so as not to confuse too many people.

I'm glad I never liked consoles, this whole new system is sickening. Unfortunately there's gonna be many people that are unaware to all of this. The idea is like steam except this is a much harsher method, no backwards compatibility with 360 games, so many restrictions to play a game you rightly paid money for, do people really want to buy this junk of a console? It's not worth it whatever it will cost.

@eorl http://www.eurogamer.net/articles/2013-02-21-sony-tells-eurogamer-playstation-4-will-not-block-used-games

there is no system in place like the ms one. I'm not sure how much clearer the Sony Worldwide Studios boss could make it. that was back in feb

agreed that more info will co.e to light and if ms were smart they would gauge public reaction and dial it back if its too negative. regardless the direction s***s going with media be it gaming or movies I kinda want nothing to do with it. long live the indies?

I could see a potential situation where the big publishers favour the Xbox One due to their used game policy, either prioritizing content or exclusive releases on the Xbox. In the long run they may see that as more of an investment, if you want those games you're going to have to play them on the xbox and you're going to have to buy it in a way that gives the publishers and developers there cuts.

On the flip side with PS4 support of indie devs they will likely gain a lot of content that won't ever appear on xbox one. Making a very weird situation where most of the big AAA games are on xbox and all the cool indie games are on PS4.

Excellent article with very real considerations. Microsoft's DRM move seems arrogant, but I hope they reveal a much more lenient system or price compensation to go with it. Don't forget that when comparing Microsoft to steam that steam often have cheaper than retail game prices. If Microsoft follow suit and sell their games cheaper (because they draw a direct correlation between piracy, lost sales and price increases), then I think customers will be happy with that. It's paying full RRP for a game and getting full DRM restrictions with it that will be the problem. I think it's all about give and take.