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Open Letter to Sony and Microsoft on Game Consoles

Chad is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

I recently read several Motley Fool articles commenting on some of the new rumored specs for the new PlayStation 4, aka. Orbis. Rick Munarriz wrote an article, where he suggested that Sony (NYSE: SNE) could essentially lock games to one console. Since in theory this would kill off a huge used games industry, this would be a major problem. Rick also suggests that changing the name of the system from PlayStation 4 to Orbis is a good idea. He doesn't believe that the PlayStation name captures the audience that it once did. Anders Bylund covered the same topic from a different angle in his article, talking about how the system might not be backward compatible. He also suggested that by 2014 there would be all new consoles, from Sony, Microsoft (NASDAQ: MSFT), and Nintendo to compete against the rise of mobile gaming. Gaming web site Kotaku started all of this, by detailing some of these expected changes.

Corrections

So first, let's get the corrections out of the way so we start off on the right foot. Kotaku does not say that the system will be called Orbis, the comment is, “...at least its codename / working title – is apparently Orbis.” Given that about 200 million “PlayStation” consoles have been sold, and the online store is called PlayStation Store, it doesn't make a lot of sense that Sony would so quickly abandon this name. The whole thing about used games being non-usable (or locked) isn't totally accurate. The Kotaku article says, “the pre-owned customer picking it (the game) up will be limited in what they can do...with consumers having to pay a fee to unlock/register the full game.” The article from Kotaku specifically mentions this would allow outlets like GameStop to continue to sell used games, while also allowing major publishers to avoid their own haphazard approaches to online passes. (i.e. EA games online pass does not work on used games if it has already been used). Now that we've gotten the right information together, let's get to the letter.

Dear Sony and Microsoft:

There are three different issues facing the future of gaming consoles. As a gamer of over 20 years, I would like to give you my personal take. I want to address the two major issues that are reported to be up in the air about your next generation consoles. I also want to give you some of my suggestions of how to improve your competitive position versus mobile games. First, let's start with the issue of backward compatibility.

Backward Compatibility

I'll be honest, backward compatibility would be great, but it's not the deal-breaker that some would think. As a good example, look at the PS3, most of the systems on the market are not backward compatible. Rather than making the hardware backward compatible, a better idea is to re-design older games for the newer hardware. I've seen game trilogies come out touted as HD versions of older console games. This allows game producers to get paid again for older games. This also gives buyers a good value, because they get multiple games, produced in better quality than if the original game. For excellent titles like Tomb Raider, Lord of the Rings, Devil May Cry, etc. this provides a better option to gamers then just making the new hardware backward compatible. While backward compatibility isn't a deal-breaker, being able to play used games could be.

Used Games Can Work For Both Of Us

Here is the deal, if you truly block people from being able to buy and play used games, you will push more people away from console games. With the advent of app games and Internet games, console game players are already being stolen away. The rumors of locking down a game to one console, which would hurt GameStop, Best Buy, eBay, Gamefly, and Redbox to name a few, cannot be an option. What will happen is, those free-to-play and Internet games will look more and more attractive. Electronic Arts (Nasdaq: EA) already has a system that works to avoid piracy, and helps to avoid game trading. There should be a code for each game, that can only be used one time. When the person buys the game at retail, they get this game code included. The game code allows the game to connect to additional online content, such as multi-player and additional maps, items, etc. If you buy a used game and you want access to online content, you pay $9.99 as a one time fee. Utilize this idea and allow the used games industry to thrive. Locking out used games by tying them to one console, would effectively kill off the used game industry. Since used games represent a driving factor in why gamers purchase consoles in the first place, this is a critical issue. Killing off a thriving part of the console gaming business is a fast track to no where.

The Threat Of Mobile Gaming, What You Can Do

Mobile gaming and console gaming can exist side-by-side. The only way this happens is through better access to games on consoles that can port to tablets. For instance, if I'm playing Modern Warfare 3 on my PS3 or Xbox 360, I should be able to port my stats, profile, and game saves onto a tablet of my choice. This information should be usable on any other legitimate copy of the same game. This would also work in particular for sports games. Allow users to change their settings, update their rosters, depth charts, etc. on their tablet. Game producers could also build in mini-games designed for tablets with each title. These mini-games could be tied to player upgrades for the console title. This would tie gamers to their console title, and also make part of the title portable.

In conclusion, the next generation of consoles has to get it right. Console games are still the most immersive, and the best experience available to gamers. Make sure this doesn't change, by trying to make a few extra bucks.

Sincerely;

Chad Henage


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