Microsoft DIY Xbox games follows net trend

Stan Beer
Wednesday, 16 August 2006 10:29

Your IT - Home IT

It's no secret that Microsoft loses money on its games consoles and makes much of it back on the games software and license fees it sells. Now in the best tradition of new media organizations, which derive their content from contributors who also happen to be clients, Microsoft wants to get gamers to develop their own games for Xbox 360 and share them with their friends and the wider community.

While this novel strategy may not go down too well with development studios that spend megabucks on developing titles for the Xbox 360 platform, the benefits for Microsoft are obvious.

For a start, true to form, Microsoft has no intention of giving any of its software away for free. Its new games software development kit will cost would-be games developers US$99 for an annual subscription. Multiply that by a million or two games developer wannabees and that's a handsome high margin recurring moneyspinner - despite what detractors may say.

However, in a medium where content is king, Microsoft appears to have come up with a master stroke. Not only is Microsoft attempting to stoke the fires of content creation in the Xbox 360 space, the plan looks to be a likely way to create a development culture amongst the Xbox 360 user community.

One can imagine a future scenario where a significant proportion of Xbox 360 buyers will opt to take the games development kit as part of a bundle. And of course there will be online development chatrooms, blogs and global collaborative games development efforts. And don't forget the more sophisticated home developers who will opt to buy the more expensive development package.

All of that adds up to the best form of viral marketing and platform lock-in for Microsoft possible. If you want to be part of the games community, you've got to have an Xbox 360. And if you want to be a real player, you have to be a developer. This is the sort of participation you see on news aggregation and social networking sites and it works. Sony PlayStation 3 is a few months away. It will be interesting to see if Microsoft's collaborative development strategy has any effect on Sony's own development plans.