Squandering Xbox Live Arcade’s potential

Last week I wrote a few posts about what Microsoft is doing wrong with Xbox Live Arcade — the service that lets you download games, old-school and new — and what it’s potentially doing right. Today I see Joystiq has an interview with Ross Erickson, worldwide games portfolio manager for Xbox Live Arcade. The interview shows two things: Erickson is great at saying nothing by saying a lot, and Microsoft doesn’t get the potential it has in Live Arcade.

This quote stands out:

I’d venture to say that if you picked the top 200 games of a certain generation, probably the top 10% of those are the ones that most people really want to play most of the time and the remaining 90% you really start getting on the diminishing curve of value to a market that you’re trying to serve. Is the game that’s 197th on the list really worth bringing back out and can it be provided in such a way that the customers really do care about it or is it just a marketing checklist item?

Erickson clearly hasn’t read The Long Tail (go read my review, then go buy the book). When you don’t have to spend money on putting the 197th most popular game on a disc, packaging it, shipping it — when it’s just a bunch of ones and zeroes you can zip over the Interweb at basically zero cost — there’s no such thing as a “diminishing curve of value.”

On the contrary, as Chris Anderson persuasively shows in his book, the remaining 90 percent of games Erickson derides could be a big source of profits. Someone will care about those less popular games, and since it would cost nothing to sell each additional digital copy of Kangaroo, even if only 10 people download Kangaroo in a month Microsoft would still make money. And because of gamers’ dedication and heavy nostalgia, I’d bet that those 90 percent of less popular games have a much bigger nascent following than Erickson expects.

This is why the souped-up Frogger annoys me. Erickson’s right that if Microsoft tried to update every game and spent time and money on them all, it wouldn’t be worth it. But with an emulator (hello MAME) that can play every old-school arcade or console game, Microsoft wouldn’t have to spend anything (other than cases where two-player modes and getting high scores onto leaderboards have to be worked out). They could price the games fairly, and marvel as a long tail kicked in.

UPDATE: In fairness to Microsoft, the success and potential of Xbox Live Arcade really seems to have taken them by surprise judging by this interview at IGN. But I still think that when it comes to most retro games — as opposed to the Geometry Wars types, where I know there are actual development costs so I don’t mind the $5 or $8 price or whatever it is — they should just throw as much as they can out there in its original form for cheap.

— July 25, 2006

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