Xbox One is Secretly an All Digital Console

And it all started out so well. And then not so well. And then so well again, only to be shot down again. There are quite a lot of things a bit off with Microsoft’s upcoming console, the Xbox One. At this point, we of the gaming population have gotten used to silly naming conventions. Nintendo is to blame, as is Project Natal, Kinect, and of course the various degrees of ridiculous PC gaming devices that are supposed to communicate the manliness of the product. But I digress. 

Before the official unveiling, Microsoft tended to deny their successor for the Xbox 360 platform to be an all digital console, as in a console that only gets new games through downloads, to be purchased at the dedicated Xbox Live Marketplace app store. Now we know the console will have a Blu Ray drive and games will be delivered on optical media. But there’s a big caveat. 

Imagine a world, in which Valve’s Steam Box was real. But in order to get maximum market penetration, Valve would have to sell their box at retail outlets as well. Remember the PSP Go? Neither do I. Why? Retailers didn’t sell it, because there were no games for them sell alongside with. The PSP Go was a fully digital console, which would have not given them a share of the revenue of the games. 

Are you still with me? Valve. Let’s imagine for a minute, the only way to buy those PC games that are sold on Steam was through Steam. Let’s imagine there are no more boxed copies sold. What would Valve have to do to get the retail chains to sell their boxes? Put the games back on the shelf. 

What Microsoft has done, is introduce a fully digital console with optional retail sales.

Now, let’s stay with this hypothetical situation a bit longer. People buy a Steam Box at Best Buy, and a bunch of games. They go home, and install those games on their boxes. Since the games are full installs, and since Steam is an effective way of digital rights management that doesn’t require the customer to keep the disc in the drive (not that the proposed Steam Box would have an optical drive, but that’s another story), the customer ends up with an install disc. Now, that customer can take that disc with him to a friend, pop the disc in, install the game, log in with his Steam account and play the game. 

What he cannot do, is resell the disc. Or effectively lend it to his friend. That already works that way today with a number of Steam Works enabled games. And that is essentially the process Phil Harrison describes in this interview. 

Essentially—think about it—this means that the Xbox One is a fully digital console when it comes to games. Of course you can still buy your games wherever you want. But those purchases will be tied to your XBox Live account, just as any purchase you make in Steam is tied to your account there. What Microsoft has done, is introduce a fully digital console with optional retail sales. 

Personally, I highly doubt that reselling of Xbox One games will be possible. All the benefits that a physical disc brings to the customer — to the FIRST customer — is being able to chose the vendor and maybe get a discount somewhere. Maybe even import a game — which reminds me that I haven’t heard any comments on region locking yet. But beyond that? There are no benefits. The disc is just a glorified download, the actual game, the license to access the content, is bound to the XBox Live account. And at least so far, there’s no option of trading anything through that. 

This might not be very customer friendly. And it will probably drive GameStop’s stock through the floor. But essentially that’s what it is. The Xbox One is a digital platform with all the things that entails.