A rogue Microsoft employee recently spilled the beans online about a number of innovations planned for the new XBox One console, much to the delight of gamers everywhere. However amongst the revelations is a plan that may put the gears in motion for a war between Microsoft and games retailers such as GameStop. That plan: an Xbox One to be released without a built-in optical drive.
Currently the Xbox one is offered with a 500GB hard drive and a built-in Blu Ray for games and movies, all retailing at a price of $499. The leaks suggest that this will be joined by a console with a 1TB hard drive and no optical drive for a mere $399. Users of the discless console would purchase games through Microsoft’s Xbox Live service and store them on their hard drive. The rumors behind this device seem to be somewhat confirmed by reports in The Verge that such a device has been tested.
If true, the plans could plunge Microsoft into a controversy that surrounded the initial Xbox One announcement. Initial gossip of disc-less and always-on consoles caused much consternation amongst gamers who mainly hated the idea of not being able to sell on their finished game discs to others, or to buy older games at a discount. Forcing all purchases through Xbox Live would effectively end that market.
If that’s a nuisance for gamers, it is practically a declaration of war against retailers such as GameStop. Stores specializing in other forms of fixed media, such as CDs and DVDs, have systematically collapsed over the past decade, but the games retail industry has managed to hang in there. Investment analysts believe that the GameStop business model still has some ten years remaining in it before succumbing to downloads and online retail.
Those predictions are based on the three main players in console gaming—Sony, Microsoft and Nintendo—sticking with the existing model of distributing their games one physical discs. Already, newer consoles are showing that this can be sidestepped. The Kickstarter-funded Ouya is download only, while the Steam console looks to extend that company’s hugely successful distribution model for PC games. The day when all games are download-only seems to be coming, but that doesn’t mean that GameStop will go without a fight.
One ace up GameStop’s sleeve is the PowerUp Rewards loyalty scheme. There are 26 million users of this scheme in the US, and that kind of user base offers the company some leverage against Microsoft. The Xbox One is already lagging behind its arch-rival PlayStation 4 in terms of sales, and GameStop would be likely to drive their customers towards Sony’s console if Microsoft started undermining games on disc.
All of this may be a moot point anyway. Microsoft have not officially denied the rumors but some senior people on the Xbox team have poured cold water on the ideas. Others have pointed to the technical challenges of a discless Xbox, asking if existing broadband infrastructure could handle a game like Halo 5 or Gears Of War 4 being downloaded by millions of users on release day, given a file size of 30GB to 50GB for each game. The world may not be ready for a discless Xbox One quite yet, so it looks like GameStop can breathe easy.
By Bernard O’Leary
Wall St Cheat Sheet
2 thoughts on “Xbox One Gears up for War With GameStop”
That is great for people who have high speed internet, a lot of people can’t get fast internet or can’t afford it.
This is a great idea to have a disc-less gaming system. For many of us who use Steam or Origin we are already there. I’d love to be able to buy xbox one games on the fly and never have to worry about having a disc based game again.
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