Interesting article.  I agree with most of your arguments, except for the anti-import section.  I just don't see a reason to prohibit US gamers from buying/playing Japanese versions of a game.  They bought the hardware (razor), bought the software (razor blades), and just want to play the game (shave?).  I fail to see how this can hurt Microsoft or the game's publisher.  Am I missing something?

-ds

"Interesting article.  I agree with most of your arguments, except for the anti-import section.  I just don't see a reason to prohibit US gamers from buying/playing Japanese versions of a game.  They bought the hardware (razor), bought the software (razor blades), and just want to play the game (shave?).  I fail to see how this can hurt Microsoft or the game's publisher.  Am I missing something?"

At the end of the day it's really up to the publisher to decide. I can't speak for all the reasons that they might choose to not release a game in a region, but some of the reasons I listed (cost of localization, cost of making game suit regional differences, etc) may be some of them. I do think it's becoming less and less of an issue, especially as Japanese companies are seeing the majority of their future growth to be outside of Japan, and hence want to sell their games everywhere.

I think you skipped over a couple of things.  you mentioned backups but never talked about it.  You also did not talk about "invention" or "creativity".

Now, it may be that neither of these topics offer enough value to offset piracy or attach rates, but I think they are legitimate uses of modchips.  

I have never understood "why" MS has not included some backup and restore functionality in the xbox or 360.  If they did, 90% of the need for a modchip would go away.   Especially given all the arcade stuff available and only stored on your harddrive. With game saves and achievements added on,  it would really be valuable to have a backup of your 360 harddrive.  

A number of "modchip" accomplishments lead to creative inovation that can add to later functionality of a console, making the "standard" console much more playable and usefull in future models.

Those are two "good" things that come from some modchps.

Re: backups, I do sort of talk to it with this quote: "While I imagine there may be a few folks who really do just want to run custom applications on their console and have no intent to pirate games, we have yet to find a way to separate legitimate use from illegitimate."

That's the crux of the problem. If you can find a way to allow people to run homebrew software (and/or allow backups without enabling piracy), I think folks would be interested in exploring. But right now I don't think any of can point to a solution that doesn't enable piracy.

Am I wrong?

"Some people attempt to justify piracy by pointing to the perceived high price of their hobby and/or games, but the argument just doesn’t hold up. You don’t steal a Ferrari that you’d love to drive simply because you can’t afford it, right? Same thing."

No, actually, it's not the same thing. Stealing a Ferrari is theft, while copying a game is copyright infringement. The difference is that in the former, there's one less Ferrari out there, while in the latter, you haven't actually affected the supply of the goods - you've created a new one for yourself. I still agree with you, though, that piracy is unjustified whether you have the ability to buy it or not, although I think it's far less serious than theft. But I wanted to to point this out because confusing those two concepts is more of an RIAA/MPAA tactic (although in their case, it's deliberate - for an example, look at this: http://www.youtube.com/watch?v=ePtXon7eQXo).

I am really enjoying your site. It is not yet full of the mindless ranting that plagues the internet.  

I agree that import games are really the only valid (in my opinion) reason for modding.

If the gamer is the customer, why not make all content available. You mentioned that the razor/razorblade model is used. This a proven method of sales. Why then limit the amount or "type" of blades available? Granted the publisher has many concerns however,  given how rabid gamers can be, the more content and diversity the better.

The unfortunate part of the import argument is that it is for the most part a redirective argument. It is used mainly to counter the less ethical part of the modding process. If the games were region free, this argument could be nullified.

I guess the whole question for me is why do users have to be penalized for a broken business model. The whole razor/blade model is quoted a lot, but if I buy, say, the latest razor from Gilette, am I then obligated to buy their blades? Suppose someone comes out with an aftermarket blade for that razor. Or, consider the printer industry. Since HP makes up the losses on its printers buy selling ink cartridges, am I morally obligated not to use inkjet refill kits? What about the other recycled ink cartridges on the market? What if I only buy used games for the console? Or just rent the games through Gamefly or Blockbuster? Using the "it breaks our business model" excuse to say that it's illegimate for me to run Xbox Media Center seems kind of week.

I don't condone piracy, but your arguments about importing and added functionality simply don't hold water.

A publisher may have concerns about releasing a game in a certain region but that doesn't mean that end users have to share those concerns or abide by them. Frankly, I've always seen region lockouts as a way for publishers to charge vastly different prices, depending on what the local market would bear. That's great for pubs, but why should a user in Europe or the U.S. feel obligated to essentially subsidize the purchase of the same media by users in South America or Malaysia?

Apart from the language barriers, there's no lockout on books, magazines, or other low tech media, despite many of the same concerns about cultural sensitivities, piracy fears or marketing difficulties. If I want to play a non-localized version of an unreleased game, and I can import it, why shouldn't I play it? Heck, if I am going to mod my console to play an imported version anyway, why not go ahead and play a pirated import version (apart from my own conscience)? Really, the argument you make here is an argument against region lockouts, since it would give people one less legitimate reason to mod their consoles. Possibly the best decision Sony has made regarding the PS3 is to make it region free and I sincerely hope Microsoft follows suit.

As for added functionality, homebrew and related uses, you give a great argument ... from the platform holder's point of view. The viability of your business model is of no concern to end users, nor should it be. If I purchase a piece of hardware, I believe I have the right to do with it as I wish. If my use breaks your business model, perhaps that model is flawed. If the platform holder wishes to have a legal avenue to prevent this, try leasing us the hardware, like the ISPs and cable companies do. If you still own it and I pay you a small amount to use it, then I have no right to modify it. Once you sell it to me ... well, if I want to use it as a doorstop (a purpose that it is clearly not intended for) don't I have the right to do so? And if the hardware is capable of advanced uses, it would behoove Microsoft (or whomever) to either build in those capabilities or license the right to do so to a third-party, again removing the desire to mod the box for what should be legitimate uses. Obviously, there is demand and where there is demand there is potential for profit.

I've long wondered why console manufacturers don't sell a homebrew SDK to "legitimize" those that desire to tinker or play with the toys created by tinkerers. Sell me a disc that allows the use of homebrew code! Let me develop it on my PC, copy it to a memory stick or CD-R to transfer to the HD and require the use of the "homebrew wrapper" disc in the drive to execute it. It might not have worked until the Xbox/PS2 generation, but there's no reason I can see it wouldn't have worked since then. Indie guys can sell games and apps on their own, but as long as everyone that wants to play them has to buy your disc to execute it, who loses? You get your attach rate, I get my homebrew.

Remove the need to mod to get those things (imported games, advanced functionality and homebrew) and the desire to mod will dwindle down to a minority who want to pirate. Give me a legitimate reason to mod, and I will. I never had a desire to mod when the only purpose was to play pirated games, but I have been seriously tempted to chip my old Xbox to turn it into a media player for my bedroom, and I was about five minutes away from buying a modded PS1 at a garage sale solely for the purpose of finally playing the Vib Ribbon disc my buddy bought me in Japan, until a 12 year old bought it ... to  play the 50 pirated games it came with (that was the thing, I just wanted the console and was trying to talk the guy into knocking $5 off the price if I "let" him keep his folder

I would love it if my Xbox 360 could function as a portable media player.  I often take my box to friends houses and would like to be able to watch some video files on their big new HDTV.  I know I can do this with a media center on the network but that just isn't practical during quick visits.  Enabling media player functions is the primary reason I have seen many Xbox users mod their consoles.  I think the USB support for music and pictures on the 360 is great, please let us watch our videos too!

I'm afraid I only agree on Ozymandias' statements regarding the piracy part, and even then only in a half...

Regarding the playing import games I think it is another boost to the market actually. The company still sells the game with no further development/localization cost (although in a minimal quantity for sure), game import/export companies get a share of benefits and the player gets the game he wants. I really fail to see the harm in that situation, specially now that the 50/60Hz problems are about to disappear finally (its highly unlikely to find a PAL tv not supporting NTSC these days). Would it be preferable to have a normal release of a game in a certain region? For sure, specially for the player, but that is far from being happening. Of course USA isn't on a big toruble in games not reachign there, but here on Europe is much much much more different. There are a damn lot of titles we never see here and sometimes it is quite frustrating. Not only that, but even those games that are brought here sometimes are even worse than importing them straight away (if you want an example lets take a big one - Oblivion, which spanish version has not yet a single patch to solve any of the issues the PC version has since it was originally released whle english has 2, german has 1 and french has 1).

About the hardware modification to add extra features... well... while I do understand in part your point, sometimes this comes to an incredibly ridiculous point (such as the need to purchase a remote controler to be able to play DVDs on my original Xbox when it is fully capable of doing it on its own). On the other hand, some of this modifications enable features the console creators sometimes have not even thought of (I modified my xbox to add a SPDIF output on it given I couldnt use the optical digital connection as I have it already used on my speaker system, how come no one of the creators thought of that?... ok it has nothing to do with the modchip but with modding in general but still...). You simply can't blame smart users to investigate on certain fields and come to certain modifications. specially if the official solutions sometimes are really overpriced (not always, not all, but quite a few).  

Finally, on the piracy issue, while I do agree in spirit, there is also a severe trouble. I know its unlikely to happen, but since it happened to me a couple weeks ago with a music disc I guess it is not so strange, what would you do if your favourite xbox360 disc gets scratched so you cannot play any longer? I had luck with my music disc because I had a mp3 copy on my hard drive and the cd player on my room accepts all kind of discs, but that is not going to happen on the console without modification. Would the game publisher give you another copy if you present the scratched disc? I guess that after all this is not so unlikely given the long delay of HDDVD and BlueRay because of the private copy issues being debated... ON the other side, what about custom apps/games? I mean, really, why would anyone use the upcoming XNA framework to code anything if they cannot actually give it a try on the 360 (and no, I wont purchase the managed DX will be outdated by then excuse)

Speaking of the devil and about tricky questions... DRM, fancy giving us your thoughts on this?

Another interesting mod case is enabling the 480p mode on a PAL XBox. For some (unknown) reason, the 480p mode is disabled on all PAL Xbox consoles, although there are quite a few Xbox games that support 480p. Is using a mod to enable functionality that greatly enhances the gaming experience, but is artificially withheld from a certain group of consumers, unethical?

"Possibly the best decision Sony has made regarding the PS3 is to make it region free and I sincerely hope Microsoft follows suit."

Cory, I think this is an interesting trend by Sony, and I'm curious what it means in the long run.  Of course, the real reason there is no regional encoding on the PS3 is because Blu-Ray doesn't use regional encoding, opting instead for other approaches to reduce piracy.  

I agree with Ozymandias in all points but the import games. It's not just because you can get the games earlier from Japan or in my case the United States - there are also some games that are never released outside of Japan, because it's not profitable for the publisher to release a localized version. But still, there is plenty of interest even for a japanese version. So actually because gamers from US or EU are not able to play some Japan-only games the publishers are losing profit.

For example Wrestle Kingdom. I know at least 5 people who would have loved to play that game and would have even actually bought it, if it was regional code free.

Or Winning Eleven. Every year thousands of WE copies are imported by european gamers. Most of them also buy the European Version called "Pro Evolution Soccer" and Konami gets twice the money.

From what I gather, the reason some publishers don't release games outside of a local market is cost.

From a consumer angle it doesn't make much sense. But the publisher would have to pay for distribution, localization, and advertising.

At the end of the day, most games aren't good enough to justify that cost. A lot of developers and publishers simply can't afford it.

Especially when you remember that the majority of consumers won't buy a non-localized game. Most won't even watch a non-localized movie!

Re: "Possibly the best decision Sony has made regarding the PS3 is to make it region free and I sincerely hope Microsoft follows suit."

Just be aware that you can have a console be region-free (meaning it can technically play discs from any region), but publishers *may* still choose to have region lockouts on *games* which would then not run on that console. In other words, I'm not convinced that there will be a single disc printed and made available worldwide for the Playstation 3. But I guess we'll see.

"I have never understood "why" MS has not included some backup and restore functionality in the xbox or 360.  If they did, 90% of the need for a modchip would go away.   Especially given all the arcade stuff available and only stored on your harddrive. With game saves and achievements added on,  it would really be valuable to have a backup of your 360 harddrive."

Right when I read that, the first thing that came to mind was how many games I could rent and save to the hard drive and save me $60 each time.  While I think back-ups of some things are good, I know I wouldn't be able to resist the rent and save path.

And anyways, the 360 only comes with a 20gb hard drive.... isn't yours full yet?

I think you guys should head over to majornelson.com and read or listen to some o his archives.

With respect to foreign games being played on other system, According to Majornelson , this is all up to the publishers. If you want proof you cna head up to play-asia.com . a few games by the publishers have the region unlocked. the only difference bettwen SONY and Microsoft is that Sony has told all the developers not to lock the games, whether if this is a problem with region encoding on blu-ray is left up in the air. There are roughly about 8+ 360 games out in the market that are not region encoded and there also a few xbox( i am referring to the pre-360 console over here) which also are not encoded. but this is all that it boils down to. THe main mass of playstation audience either 1) like Anime or anime style games or 2) want to play RPG's which are sold only in japan. the sales of other titles out of japan which are not RPG or Anime influenced are close to 3%. so by sony unlocking the regions really does not increase the sale of anyone. instead it's rather going to hurt the market. Why? simple. Publishers tend to price a game at a price that the majority of the gamres in community will buy. example in the US a game on a next gen system can easily be sold at $60. in the UK the same game can be sold at 50 pounds ( mainly because of the economy). in japan and some asian countries you will find it extremely difficult to price a game to the equivalent of $60 mainly because of economic standing and also because of market penetration, so you will have to sell it at a discount.

With respect to people installing modchips i believe that the onces developing these chips are the onces using it properly.The community behind modding the xbox 1 console is huge and has very impressive result's.. look at some of the mini servers people are creating by stacking multiple xbox's. For one they are way way cheaper than buying a new pc. i don't think attacking the mod community is the best way. look at this way, if i buy a pc and use it to hack other people's pc's you can't tell me that the pc is a bad device it all depennds on the people that it is handed over too.

The best thing microsoft has done is listen to the community and tried to integrate alot of what people wanted. but in the end, this all goes back to the main thing. Microosft is making more money of these ideas and leaving us mainly in the dark moving people to even demand mod chips higher. one very good example is the gamerpic and the xbox theme. When it was anounced everyone was thrilled . We can all now sit down and create our very own theme and better yet we cna publish it on the marketplace and make some points if others love it. but instead what do we get. Poorly made gamerpics and some equally bad themes.

look at this link

http://www.xbox360fanboy.com/2006/07/31/mc360-xbmc-superman-returns-theme/

that is one theme no 360 official theme to date can beat. and better off this is free.

the only reason modchips exist is because someone along the lines wants to make sure that in the end they cna profit. if any compnay wnats to suceed all they have to doo is simple. keep the onces interested in homebrewed games ,interested by given out development packages( even if it cost $100 a lot of people will jump on this and the result will be impressive. want to see a good example look at xbox live arcade.), and allow the general community to maxmise their use with the console. ( such as user made gamertags, and user made themes). Now i know lots of people will jump the wagoon and say that the gamerpics are being doen this way so that people do not abuse it and put images that might be insulting to another..  then why don't you create a simple program like paint wihch peopl

Sorry guys, you are wrong about the PS3 code thing. Bluray movies will still have a region code, but the games will be definately code free.

If I really want a game, and I know it can be played on my European 360, but it won't come out here for weeks while in the US people are playing it, I will import it.

That difference in release dates is not Microsoft's fault, but the distributors' and if Microsoft doesn't want people importing games, they should do something about it by working with the distributors.

Take Dead Rising (http://xbox360.ign.com/objects/748/748396.html), for example. US release date: August 8, European release date: September 8.

As soon as sites like Play.com and Play-Asia.com can tell if it's region free, you can bet your bum hundreds if not thousands of Europeans will order their copy of Dead Rising there instead of waiting for Capcom to finally release in Europe.

I agree with the piracy issue and part of the homebrew issue.  If you look at what the original Xbox can do with a mod chip and XBMC it is simply amazing.  Compare what XBMC offers you versus what the 360 does for media capabilities.  They are not even in the same league.  Even if you hook your 360 up to a Windows Media Center Edition PC the 360 is still lacking.  Why can't we stream Xvid and Divx movies on the 360 over a network?

Andre, maybe Microsoft should offer us some way to send in ideas on how to improve the 360 so the ideas we have won't go wasted in chatter among friends.

Take Travis' comment about streaming videos... why can't we watch movies from portable devices? Why can't we watch movies that are on our computers?

Why do all visualisations on the music player have to be so dang hippie and screamingly bright?

Why do all pictures move around when you're watching a slideshow?

Why does my 360 sound like a vacume cleaner when it's idleing, while it's nice and quiet when I'm watching a movie (or have stopped a movie but not returned to the dashboard)?

Why can't we pick multiple pictures to use as dashboard backgrounds?

Why can't we....

If our ideas and requests for features wouldn't go unnoticed but instead would get implemented, why would anyone want to mod their console to add the same functionality?

Microsoft pretends to listen to their customers, but how can they do that when you can't send them your ideas? And please don't say to email support, because they answer one question and ignore the others, as proven by the fact that despite 3 emails, two of the four links to support forms on the Dutch support page remained switched for months.

Sorry for the rant.

Re: "I've long wondered why console manufacturers don't sell a homebrew SDK to "legitimize" those that desire to tinker or play with the toys created by tinkerers. Sell me a disc that allows the use of homebrew code! Let me develop it on my PC, copy it to a memory stick or CD-R to transfer to the HD and require the use of the "homebrew wrapper" disc in the drive to execute it. It might not have worked until the Xbox/PS2 generation, but there's no reason I can see it wouldn't have worked since then. Indie guys can sell games and apps on their own, but as long as everyone that wants to play them has to buy your disc to execute it, who loses? You get your attach rate, I get my homebrew."

This is actually quite a good idea... and it does help address the attach rate issue. Appreciate this sort of productive thinking toward a potential solution!

I agree with mod chips being a bad thing but i cant agree with region coding for dvd's on this console. It is being marketed as an essential item for home entertainment i live in NZ and we basically have a free market policy here for example zone 1 dvd's sit on shelves in this country alongside zone 4 dvd's i can go to my supermarket and buy a $60 dollar dvd player that is multizone yet my $700 dollar console won't.To me it doesn't make sense .Region coding for games is a different thing altogether because of game content etc.

Long (but good) comment, so I'll snip parts out below:

Re: "About the hardware modification to add extra features... well... while I do understand in part your point, sometimes this comes to an incredibly ridiculous point (such as the need to purchase a remote controler to be able to play DVDs on my original Xbox when it is fully capable of doing it on its own)."

Actually, this was done this way so that not every Xbox user would have to pay the codec licensing fee to enable DVD playback... which wouldn't be fair, since not everyone wants to play DVDs (vs. games) on their console.

Re: "[snip] what would you do if your favourite xbox360 disc gets scratched so you cannot play any longer? I had luck with my music disc because I had a mp3 copy on my hard drive and the cd player on my room accepts all kind of discs, but that is not going to happen on the console without modification. Would the game publisher give you another copy if you present the scratched disc?"

Actually, if you look at the back of most game manuals you'll find that warranty information that tells you how you can get a replacement disc from the publisher. I did a quick unscientific survey of a few games I had on my desk today and they all had a way to get a replacement (albeit after proving you originally owned the game, either by sending in the damaged disc, showing a reciept, etc.) So I still don't understand the "backup" argument.

Re: "Speaking of the devil and about tricky questions... DRM, fancy giving us your thoughts on this?"

Super-broad topic, so it's hard to answer in a comment... you'd need to give more details on what you're looking for. That said, I can quickly say that my personal opinion is that DRM is a necessary evil at this point in time. Sure, life would be easier without it, but content providers just don't feel (probably correctly) safe in releasing their content without some sort of protection. Another one of those "don't like it, but understand it" situations.

Re: "Andre, maybe Microsoft should offer us some way to send in ideas on how to improve the 360 so the ideas we have won't go wasted in chatter among friends."

One of the challenges we always have with this sort of thing is that the teams really do hear and listen to these suggestions, but at the end of the day there's a finite amount of work anyone can do. Yes, even with Microsoft's deep pockets. :)

One example - I remember back in the day when we were in the product defining stage of Xbox 360. Teams spent days in rooms covering whiteboards with thousands of feature ideas, concepts, and just cool things we'd want to be able to do with the box. At the end of the process we probably had 10 years of work in front of us, and the teams had to boil that down to get to the core of what the Xbox 360 was going to be. The good news is that a huge chunk of the really cool stuff made it into the product we shipped last fall (and the rest is carefully filed away for future use - not forgotten!)

We have the same problem with hearing ideas. We can listen, the teams may even want to do it, but some ideas just can't happen and even though they were heard people assume we didn't listen. The best I can suggest is to send out your suggestions (just as you have today), and people at Microsoft can read them. I think you'll be surprised at what comes down the pipe given time. :)

All the "holier than thou" crap put aside, i see no harm in modifying a piece of equipment i bought. It's mine, i can do with it whatever I want.

If I buy a car with a chipped limiter in it's engine block, and chiptune it for more breakhorsepower, no law prevents me. If I buy a sattelite receiver, and buy a CAS so I can watch tv channels from other country's, no law prevents me.

But as soon as we get to the precious consoles, there is suddenly an ethical reason not to do it? Come on.. that's just bull.

The average player owns around 10 to twelve games, some own more, some own less. With the massive flood of games being put out there there is a huge amount of crap , and few really good games. Even with a chipped box, most people will buy the games they like, simply because they are worth the money.

Then there is this:

When the game producers create for a platform they pay license fees. The hight of this fee is based on the number of consoles sold. Because I have one chipped box, for media center, and one unchipped for playing on live, M$ actually can put me down for two boxes. eg. The sales of their product goes up, and the license fees do as well.

This fable that the end user buys a game and then this earns m$ a small bit of cash is not true. m$ earns for every game PRODUCED. Production goes up if a game is popular, but this hinges more on the game itself then on the amount of chipped boxes out there.

I do not beleive chipping a box hurts microsoft of any other console company. They do their due dilligence to keep an air of unapproval, but in the end they profit from it.

I love mod chips first and formost.  I don't pirate games becuase i really enjoy playing online as it is.  And the hardcore modders don't even discuss piracy on thier forums .  Playing backups is just a side effect of running your own code.  Another fact that you state is that buying addons is a main reason for not adding a new features using a mod chip and correct me if im wrong but addons arnt really that popular of a thing anyway; boy do remember something called the 32X and sega CD or even the 64DD.  Addons like that just dont sell.  The only reason i see the HD-DVD drive even selling is because its new technology and it lets you play HD-DVD movies.  Now down the road something like that would'nt sell because most people would already have a player for that.  I love the ability to play VCD's or playing HD content burned on a disk.  Or just to re-encode in divx and store it on my hard drive to play on the fly when i want(I dont pirate movies ether).  Playing homebrew and adding new features is really the only reason i bought a mod chip in the first place.  Now if microsoft plans on releasing an update that lets you do the features i described above i might not even get a mod chip when it gets released for the Xbox 360.

Wasn't there a "homebrew" version of the playstation at some point? A special dev kit-like console made just for the purpose of people making there own games on it? I seem to remember something like this a few years back... but old age is keeping me from remembering the details. (and laziness is keeping me from digging around the 'net... *sigh*)

Think you might have been thinking of this? Linux for the Playstation 2, with a special runtime environment to run games?

http://en.wikipedia.org/wiki/PlayStation_2#Home_development

Actually, I was looking around on wiki and found it. The "Net Yaroze" version of the first playstation.

http://en.wikipedia.org/wiki/Playstation#Net_Yaroze

Got over my laziness! heh  (still old however... *sigh*)

Have you personally seen and used Xbox Media Center, Ozymandias? It is amazing to see how much better a homebrew dashboard is compared to the original Xbox dashboard. Twenty times as much functionality and it's extremely customizable. It's stunning how much talent some of the people have who write these applications; and they do it seeking absolutely no profit.

When an individual can increase the value of their Xbox tenfold simply by paying $40 for a modchip, I have a hard time feeling bad for the huge companies who _may_ indirectly lose $5-10 somehow, something I don't even personally believe is true.

Once I chipped my Xbox, I started pouring hundreds of dollars into buying Xbox games and accessories because I got so much more enjoyment out of playing my Xbox that I started prioritizing my wants for Xbox games and such over other inane things like buying new rims for my car or faceplates for my cell phone.

Re: Region Freedom

Of note is that many of the games currently available for Xbox 360 are not region locked.  Most of the US games are not region encoded (although I'm not sure about EA's games).

Unfortunately, the Japanese-developed games are locked, so while those in other regions are potentially able to benefit from access to US games, we don't get reciprocity from the guys in Japan.  That irks me quite a bit.

You type too much, and can't see the reality...

* the ability to copy and play pirated games

Answer: pirates are wrong... but copies are backups of original games... to fix this, start offering disk replacements for a small fee, if we send back our originals scratched (sometimes by faulty 360 readers)... After all we paid for the rights already, and the disc cost is so cheap.

* the ability to play import games

Answer: Offer better prices in all regions, and simultaneous launch

* the ability to add new functionality (such as running homebrew software)

Answer: this will be allowed by PS3, legally... why don't let us do what we want with our boxes? The 360 is so limited in software, a Xbox1 does much more then 360 does, see XMBC homebrew

I would love for the ability to develop home Xbox 360 applications to be added to the Xbox 360 feature list, even if it's something simple, like, developing flash applications.

I would even like something like FPSCreator:

http://www.fpscreator.com/

The only reasons I've modded consoles is to play imports.  Just because you make a console region free, does not mean you have to sell the games everywhere.  Someone who mods thier console to import games already has the import part figured out.  If the console was region free, they import it, but thier console is still unmodded, and everyone is happy.  Game is legit, console is unmodded, no harm done.

I think it would be less tempting to mod the 360 for homebrew if it could do some of the things I knew it could do. For example, playing streamed DivX video from my PC. I'd even pay some amount of points ($25-$50?) for this functionality as a downloadable addon. I just have so much DivX video that I'd like to watch, and even with my Media Center I can't do it because the codecs aren't there. But XBMC on the old Xbox (modded) can do it. It just kinda burns when your shiny new machine can be out-performed on simple tasks (video playback, in this case) by its older sibling.

About the replacement disk option... that's up to each publisher, and most of them actually will replace a scratched disk.

"About the replacement disk option... that's up to each publisher, and most of them actually will replace a scratched disk."

M$ should make this mandatory. The same way all publishers are obliged to launch 720p, 5.1 and achievements in all games, they should be obliged to offer disk replacement on small fees.

Great article, not just looking from the companies point of view, but with a view to how you would like to use a console.  Keep up the good work

"we have yet to find a way to separate legitimate use from illegitimate"

I have an idea that addresses this concern. It's called Xbox Live! If MS were that interested in the homebrew community, they could have a section on Live (something like XBLH - Xbox Live Homebrew). As people create their custom apps they could submit them to MS to be signed then posted on Live. No need for a modchip, and it would have no effect on the razor/razor blade model that you speak of (unless it was software that happened to be better than something that can be bought seperately for x360).

I sure as hell know if custom apps could be run legally without a modchip I would have bought an x360 from day one. I don't want copied games. There's some great games on 360 but not one yet that makes me 'have to have it'. XBMC on 360 however, now THAT would be a killer app!

As I was thinking this through I could think of one flaw in my idea, and that's the lack of being able to test your own apps instantly on your x360 before submitting them. The solution? Each user account could have a 'my homebrew' section. You upload your homebrew app, which is then signed and sent into this section.

The only thing I can agree with you on is anti-piracy. Except, all video games are not Ferraris. It seem every game comes out for the same price, say 50$. I'm happy to shell out the money for a ferrari type game. Then you have your "VW golf" and "Ford Focus" and "(that car that blows up if you get rearended)" type of games, they still come out at 50$. "Why would anyone want to buy or pirate this game at any price?" Well you don't know what you got till you play it sometimes. Video games are personal taste.

Importing, whats wrong with that? I imported donkey konga jap for the extra songs. Once I buy it, its my problem if i cant read the menu. I'm sure the publisher thought about it, but what cant you condone?

Mods: Let me take a brief aside, I bought a cell phone. I decided I didnt like my carrier. My phone was technologically compatable with another carrier. I called up carrier 1 and asked for the special code to "unlock" my phone. I was informed that carrier 1 owned my phone. ??? I bought it, I have the receipt, its mine. Now this debate falls short in the fact Carrier 2 doesnt have to accept my phone. I would have to buy a new phone for carrier 2 for them to service it. Why? Greed, pure and simple. You should try swapping out the word "attachment" with words like "dependance". The point is, once I buy any console, its mine. Why should any maker be able to control what I buy after it leaves the store. You lose money on it, that's your problem. If you cant servive, change your business model. Fire those marketing guys anyway cause they are not worth 2 pieces of poo to begin with.

You all forgot to mention something, how many xbox games are really even worth pirating? Close to None. A fully funtional media player is what sells people. The ability stream porn from the network to the bedroom. That is what 50-80 percent of non tech mod clients are. Now I am speaking of mature people in mind. Kids and teenagers, well that is just plain old piracy at its roots.

Now if only companys would makes games on better media so we wouldn't have to back them up....

Props to all the other comments

In some cases, homebrew software/dashboard application(s) can cause anomolies in games that do not desire those anomolies.  Example: Halo 2 cheating. I figure that's what was meant by "damaging the business". Honestly speaking, I have no problems with either the Xbox dashboard of old, or this new Xbox 360 dashboard.  I've seen XBMC, I'm not interested at all with it.

Great article, Ozymandias.  I'm sure MS will be sent plenty of "Ideas" in the near future about homebrew.  I'm a wanna-be C# coder, working with Windows Live Messenger Add-ins, and if I had something like their WLM Add-in SDK for the 360, to make homebrew for dashboard that was "legal", well then I'd probably need to be held down from the amount of "Ideas" I'd have.

While I can agree with your reasoning on the first and third points--and certainly have no arguement with the first--I'm gonna have to jump on the band wagon against region locking.

(Though speaking personally, I'd accept a less capable machine if it meant ending this razor/razor-blades rubbish... I appreciate your position, but putting yourself in an adversarial relationship with your legitimate customers is something to be avoided. Besides, it's about gameplay, not glitz.)

Most of the reasons you listed for locking (marketing, ads, localization, culture) don't really seem to hold water. They ignore the reality that people want to go out of there way to play games from other regions--without any additional prompting or advertising on the part of publishers. The fact that the language and culture are different from our own is part of the appeal. Even distribution probably wouldn't be much more complicated, since importers would do much of the heavy lifting, as they do with CDs and other merchandise today.

What seems to be the primary impetus, as others have mentioned, is market segmentation--the desire to charge each region the maximum ammount the local market can endure. First, I'm not sure how much of a difference region locking makes; given a choice, most people will choose to play a game in their native language, and so they'll likely pay the price for that localization. Second, I honestly hate the idea of using technology to squeeze people like this. No one likes to feel like they're getting ripped off (serendipity answers: http://joelonsoftware.com/items/2006/07/31.html). If I'm a paying customer, I should be able to enjoy the content no matter where I happen to live.

Getting around region locks is a strong source of demand for mod chips--perhaps even the strongest and certainly the most legitimate of those you listed. From an economic perspective, putting an end to region locking could hurt the mod chip market, making their development less appealing. Unfortunately I can't find any data that would validate that presumption--a result of mod chips being a grey market phenomenon. But it seems reasonable given that many gamers may not be tech savvy enough to add functionality or repurpose the hardware.

Ahh the piracy debate has found new form!

Agreed that you shouldn't steal a Ferarri, you should buy it. But you can be sure that once I buy it then nobody is telling me what I can and can't do to it! The only deterrent is that I might, heaven forbid, void my warranty. It doesn't really stack up. So I think the overwhelming 'vibe' from your post Ozymandias is that if a mod improves the functionality of my 360 why shouldn't I go ahead with it?

So the real issue as you said, is how to prevent modding as an enabler for piracy. The short answer is from a technology stand point, you can't. The modders will always be only a half step behind the latest unbreakable security mechanism.

However Microsoft have already worked this out I think and are on the right track with stopping piracy - Xbox Live. I would be willing to bet piracy on Halo2 is nearly non-existent. If someone offered me a pirated copy for $1 and said 'by the way the only catch is that you can't connect to Live and use matchmaking', I would tell him to get stuffed. The key is intergrating the game with xbox live to the extent where the feature set is something like Halo2 - i.e. 10% of the fun single player offline, 90% multiplayer online. That's a simple but extreme example but I think you get the point. Deep and enjoyable online intergration = massively increased incentive not to pirate games.

This article has interesting views on the whole mod-chip argument, but only one is 100% valid:  Your stance on modding for the purposes of pirating/copying.

"... sometimes companies have good reasons to either not release a title into a region or release it at different dates."

If a game is NOT going to be released in my region(N. America), I am going to import it.  Because a game MIGHT not be released in my region, I am going to import.  If importing is wrong, I suppose I should deprive myself of games not released in my region forever.  

Also, in some cases, not so much these days, the content is edited in someway to make a game acceptable to our standards(part of localization).  This accomplishes two things:  

1.)It frees a company from blame for including content deemed unacceptable.  Obviously due to the fact that the content has been completely removed, or edited.

2.)It creates a market for gamers who want to play the game as it was created and meant to be played.

We live in a global market, and companies, not just MS, need to realize this.  If people can import the Asian version of "Ghost Recon:  AWF" for $40 + shipping(~$45 total), why would they pay $60 for the domestic version(both of which can be played in English)?

"The console business is a razor/razor blade model... Some folks point to the fact that they bought the hardware and believe they should be able to do anything they wish with it. Unfortunately, this argument ignores the fact that they’re buying that hardware at below cost, and it’s the razor/razor blade model that makes it even possible to buy at that price."

This is absurd.  I AM A CONSUMER.  I do not go to MS board meetings to hear about how "we" are going to turn a profit in fiscal 2008.  I buy your stupid product and do what I want with it.  As a consumer, I NEVER stop and say, "Wait, I better not do this.  I don't think it fits with XCorp's business model."

Since I am an informed consumer, I do know that game systems are sold at a loss.  However, it is just not realistic to think that your consumer knows/cares about your business model.  When the model fails, a new one is created.

So a publisher has a good reason not to market a game in a specific reason. That's fine by me. They might not have the resources to market it and localise it.

However, what does that have to do with importing a game? It's not an action taken out of malice towards the publisher. It's not like we're saying "**** you, publisher, you didn't release the game in my region, so I'm going to IMPORT it." It's saying "the game is not available where I live, so I'm going to legitimately purchase the game, and legitimately import it to my country. I understand that the company does not have the resources to localise and market the product for my region, but I do not care, and so I'm going to support the company anyway by purchasing the game."

The argument you make against import games is completely irrelavent, to the point of non-existance. You're arguing that publishers can't be expected to release games everywhere. I agree! But why can't we import them? Instead of answering the question, you circumvent it by bringing up a relatively unrelated argument. Why can't we play games of all regions? So what if the game isn't localised? If I want to play it regardless of whether or not I understand it, why aren't I able to do so? If I purchase a game legitimately, and the publisher gets a sale off of my purchase, why can't I play the game on my machine?

Your post answers none of these questions. We ALL understand that localising and releasing a game in multiple markets is difficult. You did not introduce a viable reason AT ALL why we can't import games.

Huh...i love modchips not becuse i will steal games or whatever stuff you just said...You see i already have 3 games here that my xbox360 made it unreadble...and then when i get back to my shop they start yelling at me we wont give you another game nor your money back ? I MEAN WTF ? Am glad that there are such creative ppl who create Modchips that i can safely backup my game!

I hope you will are read just this !

I had Xbox1 and modchip in it and i had it just becuse of that...so i can store the friking game on my disk that way i protected my game dvd and the game itself even ran and load faster ! Yes thanks to the modchip!

and btw XBL is a rip-off but anyway i still have to buy frikin fee's to play online huh !

Modchips are great,but i hate ppl when they use modchips to play piracy games on ! I agree thats bad thing...Huh...Cant think much more

See ya

ObjectiveOpinion has a very good point with both his points, both boiling down to this not being the customers' problem but that of Microsoft and the games' distributors/developers.

We don't like getting screwed sideways by anyone asking US$X in country A and US$Y in country B. If you're worried about localizing the booklets, offer me the chance to buy the original with the English-language booklet and save myself some money.

Very real examples:

Prey costs €52.99 here. That's US$67.54

In the UK Prey costs £39.97, which is US$74.53.

And in the US Prey costs $57.99

Hitman: Blood Money; € 62,99 (US$80.28)/£34.99 (US$65.25)/$59.99

(prices taken from amazon.co.uk, amazon.com and www.nl.bol.com)

So just because a bigshot company says it's wrong, that it's a form of stealing, we're supposed to get milked?

An interesting article with some good arguments why a company might not favour mod chips and why it may not be healthy in the short term for the industry surrounding a console that is being modded.

A longer term view which takes into account the extendability of a platform's lifespan (which in the console market isn't necessarily desirable, so far as manufacturers of the newer model are concerned) that community driven initiatives like mod chips, custom software, custom hardware, etc. can bring shows us that an overt anti modding stance isn't necessarily in the best interests of the platform.

Regardless whether or not modding is beneficial to your business model or not, if you impart ownership of property, then the new owner should be free to do what they like.

If I buy a car and then choose to fit it with a flight yoke, I may not be able to get it registered as roadworthy and be able to drive it on public roads, but as the car is my property, I'm free to do that.

If Microsoft wants to stop people with modded consoles from using xBox Live and so forth, then that's fine.

The razor/razor blade model comes with some risks, and you'll find that all razor manufacturers factor the risk of people adopting generic blades or finding some other use for the razor that doesn't involve purchasing blades for it into their business plans.

At the end of the day, it's an expected site effect ofthe razor/razor blade business model.

"Some folks point to the fact that they bought the hardware and believe they should be able to do anything they wish with it. Unfortunately, this argument ignores the fact that they’re buying that hardware at below cost, and it’s the razor/razor blade model that makes it even possible to buy at that price."

Just because modding a console doesn't agree with your business model doesn't mean that the owner of the product should lose the right to do what they like to their property.

you know the prices of games are so high DUE to piracy.... less piracy means cheaper games.

I actually think its really cool that some one from the inside of microsoft actually spent the time to explain why we shouldn't mod. I agree with a lot of what u said, especially the part about why we get the powerful console at such a cheap price. Im gonna share my view on the topic. In the original xbox, people either modded their system to run homebrew or to play their games and have fun without the price, however, modding an xbox to play games turns out to be even more expensive/time consuming than playing the games, not to mention the knowledge you have to have to actually modify your console. When halo 2 came out, alot of people that had modded xbox's went out and bought another xbox just so they could play on xbox live. With a modded box, u cant play live, and live is fun, and fun is the reason u modded your xbox in the first place. Now with the 360, there is no way you can get the same experience without connecting your console to xbox live, and from what I understand, if you modify the on board bios of the xbox, you will get a perma ban from live, so its not worth it to do it. Now I know there are FW mods for the dvd drive, but even with that its risky to go on xbox live, and the vast majority of people would rather just pay the money for the game they want and play it online with their friends without any hassle. Thats my take on it. I still love to be the tech freak I am and explore all the realms of geeky stuff that my new tech gadgets have to offer, but I get my fix with things like trying to get windows vista media center to work with my 360 (quite the challenge), or even just play the games!

After re-reading your article and all the comments, I have come to the conclusion that, perhaps you should bow out of the blogging game, Mr. Vrignaud.  The consensus is that you only have one valid argument - anti-piracy.  

In truth, I did not realize your lack of support for your anti-import stance, until I wrote a comment and tried to counter-point your best objections.  Barryman put it best: "The argument you make against import games is completely irrelavent, to the point of non-existance."  Your last 'argument' was an easy one.  My previous comment makes clear, your objection to 'modding to change functionality' is a joke.

All this makes me wonder what your true motivation is.  Are you simply a buffoon?  I joke that MS has mostly idiots working for them, but surely there is no validity to this, right?  I think your true reason for writing this was to create a dialogue featuring people you knew to be your target demographic(who else would read this).  To help you,

"look out ahead one to two years and try to project where we, our competition, and the game industry in general will be."

(Taken from your "about" page)

While it is a brilliant way to get the input of your target audience, it is also underhanded.  This is the reason people are mistrustful of big corporations.  Of course, I could be way off.  You could just be a buffoon.

Hey,

Downloading or copying a game while being morally and illegal is not "stealing" it is in fact copyright infringement.

An analogy about stealing a Ferrari and how it is the same when you steal software is 100% wrong and extremely misleading.

If a Ferrari could be copied perfectly without depriving the original owner of its use then... hmm?

Would you ever have bought the Ferrari in the first place if you couldn’t copy it.. hmm?

What about the massive free exposure and advertising piracy gives companies for free? Never talked about?

Please we are not stupid don’t talk like a moronic company executive about piracy.

I don’t condone piracy, copyright infringement or stealing in anyway, I just get sick of the same false arguments over and over.

Cheers

I feel that almost all of Ozymandais comments are very valid and I've appreciated a little more insight to the console model.  It makes sense too - my PC system is pretty hardcore and can handle anything I throw at it, but it cost me 7 times more than an Xbox 360.

However there is one area where this post comes crashing down in flames as totally in error.

Region coding is about one thing and always will be -Price fixing, Price fixing, Price fixing.  I'm an Englishman currently living in Hong Kong and I see the massive differences in these two markets first hand, whilst also having a good view of the Japanese one.

A brand new title is released in Hong Kong at less than half the price of the same game in the UK.  Hong Kong can be a little slow for things to come out - often a month or two behind, but occasionally the games come out here at the same time.

The simple fact that some markets can be overcharged and manufacturers are most unscrupulous in identifying this fact and exploiting the very people who keep then in business time and time again.

Of course if games weren't region coded how can a manufacturer charge a Englishman 20% more than an American and 50% more than a Chinese guy for his game???  He'll just import one instead.

Much respect to Ozy though for replying to many of these posts - the fact you have responded to the feedback has made this article 100 times more interesting.

This is obviously a topic of interest to a lot of folks. I do appreciate the time all of you have spent crafting your arguments - and there are a few great ideas in there that I'll be sure to pass on to the product teams.

As with any passionate discussion there are always some areas where it's just hard to come to a solid agreement (region-locking comes to mind from this conversation). Reminds me of a comment I once heard: "You can't argue opinion." I guess that's the fun of the conversation, right? :)

Re: "Have you personally seen and used Xbox Media Center, Ozymandias? It is amazing to see how much better a homebrew dashboard is compared to the original Xbox dashboard. Twenty times as much functionality and it's extremely customizable. It's stunning how much talent some of the people have who write these applications; and they do it seeking absolutely no profit."

Yes, I have. And I think that sort of innovation is great... *if* we can balance the potential of piracy issue. That's the double-edged sword. As I said in the article, I think there's interest in trying to enable all that creativity... and I personally find that pretty exciting. Cross your fingers...

The problem with excusing this all away by saying "you can't argue away opinion" is that you're NOT arguing opinion, in regards to import games. In fact, you're not really arguing anything at all! Your stance is against forcing publishers to release their games in all regions, which NO ONE IS ASKING FOR! We're asking for the ability to play legitimately owned Xbox 360 games on our legitimately owned Xbox 360s, and yet you are attempting to argue against that basic right, without providing an argument bearing any semblance of coherence or relevance!

Region Freedomalitizationality would be really nice. Power to the Pea pals!

At the end of the day, some of my favourite games were never released here in the UK, or even over in the states.

Totally understandable that X game might not be financially viable to market in a region, but publishers really shouldn't dictate what games people can and cannot play.

My opinion anyway.  Totally understand your stance mate, but the idea that I might naver have played some of my favourite games if I'd of played it how the publishers wanted just remind me how broken the model is.

Naturally, if the game is released in my region, retaining all the features of the original version, then I will support the release.

I dunno, I can see the difficulty from MS's point of view.  But from the gamers point of view, it's not being allowed to play X game, simple as.

How can copying a game and playing a back up the same as  

stealing a sports car...thats just silly.

First there is the price difference, second a sports car is not just a small object is it. third you can't download a sports car. (not a real one any how)

I don't beleive copying software is a good thing but comparing it to a sports car is not the same.

Its like those pirate DVD adverts in europe we get...DOWNLOADING A DVD IS LIKE STEALING A CAR. no its not is it...

Yeah that is all well and good. Except it's a standard blah blah blah from big corporation. You try to seem open by sharing your thoughs on blogs and stuff when in fact all you'd have to do is listen to the community.

Not all people who mod their consoles do that to pirate games.

Some do that to play imports. Embrace the region-free politics and you shave that portion off.

Some mod consoles to play homebrew software. Jeez - if you'd had a slightest interest in community needs XBMC guys would be sitting in Redmond by now. 360's PVR functionality is lightyears behind XBMC.

You fail to address community needs so the community balances the things by itself using modchips. And when modchip is in place it is awfully hard to jus save those 50 bucks. An all you do is play the broken record over and over again whining about kids stealing your ferra... oh games.

QUOTE:first timer said:

You know the prices of games are so high DUE to piracy.... less piracy means cheaper games.

I highly doubt that. Retail Game Prices have been fixed since 1986. It was $50 then and it's $50 now.

I don't buy your repsonse to the 3rd reason. It's the manufacturer that decides to sell below cost, It's not the consumer's decision. And while I agree that selling below cost does help get the console into more homes. I know that is only part of the reason it's done.

MS/Nintendo know if they console price is too high then people will just not buy it. (sony will learn this later this year). So MS/Nintendo Choose[/b] to sell below cost so the console will actually sell.

As a customer it's not my problem or my concern if you do not make up the difference between cost and price. Personally I could care less if MS lost money on 360. I bought the console with my money and If I want to run homebrew thats my choice/problem. The piracy concern I can see and agree with 100%.

Also, before someone says "If MS lost money they wouldnt make another console." I respond with if MS decided it was a bad idea to release a Next next-gen console I'm sure Nintendo or Sony would fill in the gap. But the truth is MS will make another system even if they lost xxx dollars on this one.

Okay, some things seem to go in the wrong direction here it seems.

Ozymandias, while I partially understand your arguments, you're a Microsoft representative right? So very likely, your arguments are made in such a way to represent the interests of your employer. How come you think this is the way the average customer thinks? Personally, I couldn't care less if Microsoft makes profit with their console/games/peripherals or not.

If, for some reason I just can't think of, Microsoft should decide to drop their console gaming products (which we all know won't happen), customers will shrug and turn to your competitors (as they did all along before Microsoft felt the urge to get their fair share of the console game market).

Sorry, but that's the truth. It's not that most of your customers are avid Microsoft-Fanboys who like to miss out on features because your revenues (is that the word?) dropped from 40 billion to 35 billion (forgive me that I have no accurate numbers, but I think we can all agree that Microsoft's revenues are large enough to call a 500 million antitrust fine "peanuts").

But we don't want to get off-topic here. My point is, from a customer's perspective, all your points become invalid. A rational (economic thinking) customer always thinks in terms of how he can better his situation for the least cost. If someone decides to mod his Xbox and to run homebrew software on it, it's probably because he was missing features in the product you delivered. Saying or believing that he would rather miss out on these because it implies a loss for Microsoft is just ridiculous.

Speaking of which, how come you think homebrew software implies a loss for Microsoft sales at all?! In which way do I buy less if I install a homebrew music player? Or a filesystem browser? All these are missing features for which you do not even OFFER us a solution. The number one reason why I installed a modchip in my Xbox 1 (yes, it's legal in my country) was to run a decent media player software, an FTP server and a filesystem browser. Sorry, I can't see in which way that harms Microsoft.

Maybe you should think how to keep people from buying modchips in the first place, instead of making lame (sorry) arguments about how bad they are for your company's profit.

Matt out. :-)

I agree on all points except the last.  Its true that if I buy the console its mine therefore I can do what I like with it.  Its really not my problem that Microsoft subsidised the cost and therefore they lose money on it.  MS is trying to do what the mobile telecoms industry works on - subsidised handsets that are covered by monthly subscriptions to make it a lower cost at the outset.  Microsoft have to adapt their model if they want to ensure they don't make losses because of people modding.  

What about xbox live over a 3 year subscription or something like that? $10 per month?  That wouldn't hurt my pocket but it would ensure they got their costs back...

"Cory, I think this is an interesting trend by Sony, and I'm curious what it means in the long run.  Of course, the real reason there is no regional encoding on the PS3 is because Blu-Ray doesn't use regional encoding, opting instead for other approaches to reduce piracy."

The fact that the discs and the OS do not enforce regional encoding fundamentally is moot: the Xbox 360 is also region free. It allows publishers to region lock their game, but does not enforce it. Similarly, as long as game developers will be able to read out on the PS3 whether it's a PAL, NTSC-J or other NTSC box (and yes they can), they can enforce region locking without even the OS cooperating. No diff between 360 and PS3 there.

As for the import locking itself: the real subject of region locking is simply "Logistics". Publishers use region locking to enable them to better predict market supply and demand, and to control their losses if a game doesn't catch on. And if a game will be a sure or highly probable success, they use region locking to be able to supply one region sufficiently first before having to ship thousands of copies to the next region, instead of being continuously sold out in both regions for a month, costing them lots of valid sales. With stores like Play-Asia shipping worldwide at low cost, the risk is all too realistic.

"But we don't want to get off-topic here. My point is, from a customer's perspective, all your points become invalid. A rational (economic thinking) customer always thinks in terms of how he can better his situation for the least cost. If someone decides to mod his Xbox and to run homebrew software on it, it's probably because he was missing features in the product you delivered. Saying or believing that he would rather miss out on these because it implies a loss for Microsoft is just ridiculous."

In your perfect world, everyone would be stealing their groceries (cheaper than buying after all), chip tuning their cars (a Fiat driving 300km/h is worth more than a regular one) and robbing old ladies (the cheapest way to better your own situation).

Face it, the licence agreements on your console's BIOS, Kernel, games and chips make modifying or copying them equivalent to stealing groceries and robbing old ladies. The real question is why otherwise law-abiding citizens become sneaky lowlife robbers in the confines of their own house when there's less chance of getting caught than outside on the street.

On the razor/razor model, did you ever notice supermarkets sell sugar, soda, milk and lots of other popular products at a loss? It's common practice since the 70s when competition between supermarkets started to grow. Customers compare prices on those common products, hence being more expensive on those would lose them customers directly. Thus the companies elected to adapt their business model and make the actual profits on non-food, diapers and other products.

I disagree with the import philosophy.  Say I like playing those Japanese romance adventure games - you know, the kind that have *never* been released in the US.  Now, though I have decided what type of game I like to play, you're saying that I shouldn't be able to play it if it hasn't been localized.  You're basically telling me that publishers in the US have a right to decide for me what games I should like.  I'm sorry, but if the business model for Microsoft is this facist, I'm not sure how they can expect their end-users not to mod their consoles.

I don't understand how people can say that they don't want M$ to be profitable with the 360.

The way I see it is that if M$ is succesfull then we all win eventually with better support, better games and better consoles in the future.  If M$ lose we all lose too.

However, if this means I get screwed out of money everywhich way I turn then I can do without it. I hate the fact that there is no worthy competition right now and that M$ deems it appropriate to charge me for EVERYTHING from actual online play (free on pc for example) to gamerpics (free to upload whatever you wish using gamespy) and horse armour (WTF were they thinking?)!!!!!!!!

If getting my console cheaper at retail is the justification for all of the above then I hope the higher price of the Playstation3 demonstrates better aftersales value.

It's hard to browse the marketplace without feeling like an imminent victim.  Hey at least the downloadable advertisements, cough sorry, I mean the demos and videos are free.

The idea of homebrew content stems from PC gaming and recognizing that a console is in fact a processing centre. I would put forth that is the sole reason mod chips are OK.

On the other hand, I gotta say that Piracy has helped MS and Sony grow to enormous sizes. Windows is the most pirated piece of software; this has allowed them to flourish as they've gained market footprint even though they didn't get to collect revenue from every user.

Sony's PS1 and PS2 were the easiest hardware to mod. The benefits of piracy are a tempting fruit, and has brought people into their fold. I can't tell you how many people I've heard say "Well, I'm going to buy a PS2, and then get it modded when it's off warranty".

That doesn't mean I expect the company mfgring the product to CONDONE the actions, however. :) As it turns out, I am rational. :D

I think this a great article, so thanks.  I do understand things a little better from I console company's point of view.

I think when most people (read "US readers") think of "piracy", they imagine someone downloading a ROM, ISO or the like and playing it for a few hours.  "What's the harm?  I wanted to try it before I buy it and it sucked."  There is no harm, IMO, to that.  But what they don't think of or see pictures of is the MASSIVE, HUGE piracy problems that, though world wide, tend to center in southeast Asia.  This is so for many reasons, including economy, high demand and low supply.  Lots of reasons for these, but one I'll mention is logistics and cost.  As we move to digital distribution, this will help eliminate the logistics of shipping hard product around the world.

Piracy will always be around in some form.  At the end of the day, whether you want to argue whether it's law or ethics, if you play and don't pay, you're getting something for nothing.

This from a reformed modder, hard and soft across five platforms, though I've never used an Xbox, only own a 360.  I understand XBMC is amazing, and if I ever were to mod my 360, it would be for some similar functionality.

With a 90 day warranty, there isn't a lot of incentive to avoid cracking its case to mod.  One question that affects the 360 modding that I'm sure MS would never give a direct answer to is, "Are the mods, firmware or hardware, detectable by Xbox Live?  If they aren't, they would never admit to it, but it's a burning question.  Would I mod my 360 for XBMC like functionality?  Absolutely.  Would I do it if it affected my Live functionality?  A very, very bitter no.

Curry,

"In your perfect world, everyone would be stealing their groceries (cheaper than buying after all), chip tuning their cars (a Fiat driving 300km/h is worth more than a regular one) and robbing old ladies (the cheapest way to better your own situation)."

This analogy is not reflecting adequately what I said, because installing a modchip is

a) not illegal in many countries (it's certainly not here)

b) does not mean harm to Microsoft's pockets, since as I said, most software which requires a modchip is simply not available as an officialy signed MS counterpart. Bottom line, you can't steal something which does not exist right?

By your logic it would be illegal to own a knife, because you could potentially kill someone with it.

Addition:

Notice how I talk about homebrew software, not pirated games (which of course imply a loss in sales for Microsoft). Though I'm very aware that modchips enable you to play pirated games, it does not imply that modchips in general encourage illegal activities.

Here the same idea I mentioned in my last post applies, namely the fact that it's the individual who performs an illegal action, not the device (I'm referring to the knife-analogy).

Saying we forbid modchips because someone may possibly abuse it doesn't make any sense to me (though for some reason, some countries have seemingly been compromised by the industry to make modchips illegal). By the same logic you could make DVD-Burners illegal, because they allow you to make illegal copies of a game.

Taking a look at the modded xbox, many people use that for one homebrew app, and one alone. Xbox Media Centre. It makes a terrific home entertainment hub. It's clear that with the 360, MS had a good look at XBMC and thought about providing similar functionality. Had they gone the whole hog then I'm sure that many people who're thinking about modding the 360 one day just wouldn't bother.

What do most folk want out of a console these days, ignoring pirate games? Movie playback. They want to be able to download a movie, whether that's something illicit (naughty), something from their video camera, or whatever. They want to be able to play their own movies, streamed from their PC/Mac. In any format, be that avi, mpg, divx, xvid. That's all. Movies that can be played on any PC or Mac, requiring nothing more than a codec for the player.

If the 360 did that then you could kiss goodbye to at least 50% of modders. They just want to watch these movies on their TV instead of computer. Live games knock a large chunk of the remainder on the head as people buy games to play online and you can't (or couldn't on Xbox) play those online with a modded box.

But MS won't let you play movies on the 360. Not unless they come via WMCE, recorded via it's PVR. Or the odd WMCE avi. No Mac support. No support for the vast majority of PCs running XP. No support for any codec other than the standard WMCE avi codec.

Why? To drive sales of WMCE? Until WMCE has RGB scart and HDMI inputs and outputs it's just not going to do well in Europe anyway. Is it to stop movie piracy? Downloaded TV shows? What? That's not MS's responsibility, and in trying to block that out you also kill off legitimate use too.

The 360 could replace a modded XB with XBMC in one fell swoop, with no mods, and probably a high attach rate by allowing you to setup shares on your PC/Mac and point the 360 to them. Allowing you to play any format of music of movie file. It's not difficult to implement and needs little more than new codecs. It's a shame. It was the biggest disappointment at launch for many. It still dodges the Homebrew and Import scene, but it would appease the majority and wouldn't harm MS, or their business model.

Oh I wish so much you lived in Germany. Example Oblivion: No patch yet, no additional quest downloads. Example Burnout Revenge: No additional car downloads.

I only wish I bought a modded 360 in order to play US import games. So, what can I do about it now that it's too late? Basically I can only hope that the support for my Region by future titles will get better. Or I can simply buy the PC version of the given game. I know this is only a complaint and I feel somehow shabby since everyone here is discussing and providing solutions, but the way it is at the moment it's utterly unsatisfying. I really think abut selling my Box and returning to the PC...

i agree with the piracy point 100% but the other points i have my grumbles with, lets start with imports, i dont care about the companies ad campaign if i already want the game why should i care about advertising, if i can read the language the game is released first in then i dont care about localisation and it does not take months to translate a game, im an anime fan, it takes companies like viz media two years to licence and translate a series or movie but fan sub groups who arent even getting paid for their hard work can manage it in 20 hours after it airs in japan, worse still are games that do not need any translation whatsoever ie american games why are they not released in the uk on the same day as the us, and why the hell should i wait, i could wait and pay for it, or just download it on the us release day, if you want the money pick up the pace. not to mention my anger at microsoft for totally shafting its early adopters, we get 2 games a week released until now and itll stay the same all the way until november when around 40 games are released, they wouldnt have just held them back for the ps3 release now would they? why the hell did i buy one last year when the first really worthwhile games arent even getting released until ps3 day. now on to the homebrew issue, why did microsoft not learn from the original xbox brew apps what people wanted, why use the half a*sed windows media center dependant crap when xbmc had proven better could be done, if they had taken inspiriation from these progs or even licenced the apps from the creators and incorporated them into the system people wouldnt need to do it themselves better still just allow homebrew code to be booted in the 360, you could quite easily release corporate and a sensibly priced end user version of the SDK and with decent software protection could still block iso loading and this would even bring some extra revenue for ms on selling the sdk. another point on piracy my 360 isnt connected to the internet as there is no line at the house, not something that bothers me as i hate xbox live its full of annoying little kids slinging pathetic abuse at each other and it annoys me greatly, however this also means i cant et hold of demos with the very small and often repeated ones on the official mag, because of this ive wasted 50 quid on some terrible games (ie quake 4 prey full auto)if i could just download them from the ms site and burn them it would make my and no doubt plenty of other peoples lives very easy, but then i suppose it would bring sales of poor games down heavily if people could find out they are bad before waxing fifty notes on it

I have already read many people make excellent points about importing and adding functionality. I think all the basics have been said, but I'm going to repeat them as a sort of internet shout-down.

First of all, as a native-english speaker living in Japan, I find the ability to play imported games very attractive. How does your response address in any way those gamers who want to play a game that's *not released in their region*? Are you seriously suggesting they should buy another console instead of modding the one they have? As a consumer, what incentive would they have to do so (presumably, none unless you have some obnoxious DRM in there)?

Also, let me add how your anti-importing stance goes against your razor/razor-blade-model point: Microsoft will actually receive LESS MONEY if I buy two consoles to play US- and Japan-region games, precisely because they lose money on the consoles.

Secondly, let me reiterate that the consumers do not bear the responsibility of your broken business model (if, indeed, it is broken). If you lose money because people buy your console to do things besides play games... you should charge more money for your console. Seems pretty basic.

Finally, a closing point about piracy. One big reason that pirates are able to do what they do with modern consoles is that there are legitimate reasons to hack them. If you made a console that could easily change regions, and allowed users to use the console for other tasks without modification, then mod chips would become strictly a piracy tool, and as such, I think they would be much easier to restrict. Just something to think about.

Cory said: "The fact that the discs and the OS do not enforce regional encoding fundamentally is moot: the Xbox 360 is also region free. It allows publishers to region lock their game"

That doesn't sound very region free to me. There currently exist games for the 360 which will play on some versions of the console but not others. This is not region free.

The PS3 may be different, it may be the same. But if your console allows region-locking, and your company policies allow region-locking, and games exist that will only play on the consoles sold in certain regions... that's not region free.

Give me a break, seriously. Allowing companies to make region-free games was an excellent step, but as long as there are region-locked games, people will have a very understandable (and, IMO, legitimate) desire to mod their consoles to play imports.

Did I miss it when MS released XBMC for my original xbox so I could by it and support razor/razor economics?  My Xbox 360 has made unplayable 2 disks, is MS going to replace them?  Just as I never put original CD's in a cd player, it'd be nice to be able to protect my investment in games.  And wtf, let me tell you the region I want my 360 to recognize and I don't need to chip my console in order to play games I paid to import.  The only point you've made that has a modicum of validity is about piracy - but I think most of the people pirating the games would not have been customers of the game anyway.  I'm not on the band wagon that says games are priced to high (I payed $49.95 for a game 20 years ago, I expect a little inflation), but I don't think most pirates would have bought the game if they couldn't pirate it so I think the losses due to piracy are way over blown.  And razor/razor - what a bad business model - I thought the computer industry had learned that proprietary=BAD long ago.  MS is touting this because they had to take huge losses on the original xbox to get a foot in the market, don't spout this r/r bs and ask us to believe it.  

Microsoft says they listen.

Ok then.....I've read through each and every reply here, and I'd say about 30% of them, at least, mention the one reason that I stuck a mod-chip in my xbox.  XBMC.

You, Ozy, have made one little reply about it :

"Yes, I have. And I think that sort of innovation is great... *if* we can balance the potential of piracy issue. That's the double-edged sword. As I said in the article, I think there's interest in trying to enable all that creativity... and I personally find that pretty exciting. Cross your fingers..."

What piracy issue?  A large number of Divx/xvids are copy-write broken files?  So?  MS would not be encouraging the use of those files?  Does a car manufacturer encourage you to break the speed limits?  No, but you can. (Well, if you ignore all their TV ads with the closed-coarsed driver )  So when you, or I break the speed limit, should the car manufacture be held responsible?  (Again, ignore the crazy USA laws where someone will probably sue GMC/FMC for just that)

So, what does MS give us?  A media player that will only play vides from a XPMCE computer.  Huh?  That makes no sense.  Most people have standard XP.  So to watch a video we have to buy another license to windows, re-install our system, and convert our existing videos to the XPMCE format?  I guess thats what you refer to as one of the add-ons to recoup costs.

Give us a media center that will connect to a standard windows share (SMB) and can play any video, and I'd never even consider a mod-chip for the 360.   Don't do it, dont even talk about it, and I'll keep watching the modding scene.  I'd like to be able to remove my xbox1 from my living room....get back one audio/video connection....give it to my daughter (my son has his own xbox) so she will buy the games she wants from it...

I believe there are good reasons for a modchip.  The one and only reason i want a modchip for myself is because i have stupid drunk and stoned friends who love my 360.  They basicaly destroy my games and i force them to buy me a new copy instead of a sack or a six pack. Another reason is since microsft is gay, and won't let me play any of the original xbox games i have. So i have wasted time and money. I would love a modchip for those reasons. As far as piracy is concerned... that's what xbox live is for... ban ban ban. Besides, where do u think the whole "dashboard" idea came from?.... all the pirates out there... how bout listening to music while playin a game? that originated with the pirates...  what about streaming content? like divx and movies from ur pc?  pirates again are responsible for these great qualities.. yet microsoft wont even use the full potential of the hardware. All of which modchips are useful for.

zero,

"Taking a look at the modded xbox, many people use that for one homebrew app, and one alone. Xbox Media Centre. It makes a terrific home entertainment hub. It's clear that with the 360, MS had a good look at XBMC and thought about providing similar functionality. Had they gone the whole hog then I'm sure that many people who're thinking about modding the 360 one day just wouldn't bother."

I 100% agree, so I'm quoting this for emphasis, and it also proves my point that installing a modchip does not necessarily imply illegal activity. The only reason why my modded Xbox 1 still has its central place under my TV is for the mere reason of being able to run XBMC (I even use it as my dashboard; calling XBMC a media player is an ultra-understatement).

And why is this? Because Microsoft isn't capable of delivering a solution to the 360 which is even nearly on par with XBMC. I don't really want to draw conclusions here though.

"So, what does MS give us?  A media player that will only play vides from a XPMCE computer.  Huh?  That makes no sense.  Most people have standard XP.  So to watch a video we have to buy another license to windows, re-install our system, and convert our existing videos to the XPMCE format?  I guess thats what you refer to as one of the add-ons to recoup costs."

A tad off-topic, but... I'm running Linux exclusively on my desktop PC and primarily on my notebook, so I know what you're on about. Check this out: http://www.twonkyvision.de/

Check for their "TwonkeyMedia" solution. They have a trial version which terminates after 30 minutes. I tested it on Ubuntu Breezy, worked like a champ.

MS won't allow imported games simply because it will lose them money in markets outside the US.

I live in Australia and most 360 games retail here at $120 on release, or a little over $91 US.

That's over $30 US on top of the RRP we have to pay.

There's a reason Ozymandias has avoided any critiques of his argument to the import issue whilst trying to seem like he's looking at other viewpoints for his other points, it's bias.

A supposedly informative article on the pros and cons of modchips that's really an advertisement against piracy? They have a name for things like that, propaganda.

I havent had a chance to read through all of the above posts, so forgive me if someone has already touched on this:

"That's the crux of the problem. If you can find a way to allow people to run homebrew software (and/or allow backups without enabling piracy), I think folks would be interested in exploring. But right now I don't think any of can point to a solution that doesn't enable piracy.

Am I wrong?"

How come we can download Xbox live arcade games and play them? Dont they use some sort of encoding/hash key thing that allows them to play on only one hard drive, the one it was downloaded on to? Why can't we download full games at a reduced price? (no packaging and retail cut) Why cant we also download paid for movies on the xbox 360 as well, the capability is there already and it would reduce piracy overall.

I am a modder and depending on the use of the modchip it is not a bad thing. With the original xbox I used the modchip for XBMC (which frankly kicks ass and still beats the pants off the 360 one... although it is a good start). It is nice to be able to stream movies from my PC (which I ripped from dvds which I own) to my TV. I also downloaded games *gasp*... however here's the neat thing... I would play the game, and you know what, if I liked it... I would BUY it. I bought dreamfall, megaman AC and a whole slew of other games recently because I could try them before I bought them. And this is why the demos on the 360 are so good. Hell I had finished dreamfall and I still bought it, how is that for trying to support the publisher?

Here are the problems with the 360 right now. First I understand the reason to link the arcade games to the specific box, hell I applaud it. Problem... I had to have my 360 replaces, and I no longer can play the game on my 360 without being on live (and since I take it to the cottage that lacks internet, this can be a problem). There is no reason why Microsoft cannot enable backups to work the same way as the arcade games. You pop in a 360 title, say: I want to back up this game to this console. If you insert a burned copy of the disc into the 360, you can play it, so long as it is hooked up to live. Sure you may end up with 2 copies of the game out there, but that is a big improvement.

I am also still waiting for the ridgeracer 6 patch that makes it impossible to stream from your PC and connect to live at the same time (doing so causes the game to lag to 1 frame/second). Namco refused to give me a refund or anything, and I cannot return an opened game... so I am stuck.

Microsoft should really let people customize their 360 more. I would love to make my own skin. And until people can fully do stuff like that, modchips will continue to exist.

What about DRM technologies? I am not one to jump out there and promote open ended DRM use but I think that you could easily do so with Xbox/360 and other "next gen" console with DRM and backup.

Setup the system so the original owner of a game can copy the game to their HD or whatever the backup medium is, though use of a software key, that is checked on load using the XBL service.

This allows for a few things, faster loading times (loading from the HD instead of the device), better storage options, as well as the need for larger storage devices (hint hint).

I think that MS of all people should be able to make strides in this arena.

The razor/Razorblade model does not apply. I didn't force you to sell it below cost. So since you sold it to me below cost, do I have an obligation to play or purchase other things, what if i never buy anythign else but  the console.

The second it leaves the store it is mine and I can do what I want to it. With that said there are certan things I give up by doing those things such as support, XboxLive Service, etc. I'm not ofr the whole pirate thing but i like the homebrew scene, I like the added functionality that the original developers never thought of. I like the fact that people are using there brains to create a better product.

ahh well thats my 2 cents

just another short point about imports, technically all imports are illegal as licences are issued by region and do not extend past the border of the country in which it is licenced and hence they can only sell them within these borders or they are encroaching on some other countries possible revenue, however if said game is not licenced in your county you cannot be charged with piracy as no one owns the rights to it in your region this is again the same scenario as with anime you can legally download and provide downloads of unlicenced series provided you are not making a profit from it until said item is licenced in your country

Good story, one that needed to be told. Modders are by nature harmful to the gaming community because they use certain advantages not generally made to the larger population. Priacy is of course the most harmful, illegal, and reprehensable act. Most people understand that when you pirate you are denying the content creator compensation for their efforts. The bypass of geographic regioning is also harmful in a lessor in the sense that certain sales and marketing efforts were bypassed. Also the creator is exposed to legal risk running the potential of shipping banned material into prohibited areas (such as depictions of swastika's within Germany). Remember how Rockstar was held responsible for content that only a mod could unlock. There are exceptions soley in my own view that I think are acceptable. One being the ability to play DVD's on the previous Xbox. There was just no justification to force people into paying addition money to unlock a feature the console already had. That was dirty pool IMO. Another case is when somebody buys a console and essentially uses the parts to build some other device such as a computer. I realize consoles are sold at a loss but thats the risk understood and taken. How would that be different than somebody buying the console and simply not using it?

For me, modding my xbox was what kept me interested in the machine.  I probably ended up buying over 20 full games for it--including peripherals like the Silent Scope gun & game, and 2 DDR pads.  However, when there wasn't a game I was interested in, it was all my mods that kept me turning the machine on every single day.  Had I not modified my xbox, I probably wouldn't have bought as much software, because I would have lost interest in the console as a whole.

Furthermore, I do disagree with your stance on imports.  While I didn't play many, there were a few gems that I loved -- especially Metal Wolf Chaos.  Also, I was very disappointed when Red Star was cancelled.  However, with some hard searching I was able to find the game and play it on my modded box anyway.  

Tell me, who is hurt when I play a game that was never, and probably never will be released?  Red Star was completed before Acclaim went down, but the game never got bought by another studio, and so was never released commercially.  It's a shame, too.  I would strongly encourage ANYBODY with the means to find and play this game.  It is a complete blast.

For me, modding my xbox was what kept me interested in the machine.  I probably ended up buying over 20 full games for it--including peripherals like the Silent Scope gun & game, and 2 DDR pads.  However, when there wasn't a game I was interested in, it was all my mods that kept me turning the machine on every single day.  Had I not modified my xbox, I probably wouldn't have bought as much software, because I would have lost interest in the console as a whole.

Furthermore, I do disagree with your stance on imports.  While I didn't play many, there were a few gems that I loved -- especially Metal Wolf Chaos.  Also, I was very disappointed when Red Star was cancelled.  However, with some hard searching I was able to find the game and play it on my modded box anyway.  

Tell me, who is hurt when I play a game that was never, and probably never will be released?  Red Star was completed before Acclaim went down, but the game never got bought by another studio, and so was never released commercially.  It's a shame, too.  I would strongly encourage ANYBODY with the means to find and play this game.  It is a complete blast.

The only reason I back modding is the ability to backup my games I own.  Until Company X is willing to replace my game that I bought free of charge (send in faulty game disc, get new game disc), my stance won't change.  When these games cost us 60-70$ a pop, and something happens to the disc, I don't feel like going and having to repurchase the game all over again (I take care of my property, but face it, accidents happen).  I'd rather make my copy to play from, and keep the original safe.

To encourage homebrew applications and still keep the razor/razor blade model working, I would recommended MS to open/implement some kind of managed runtime environments for homebrew applications. I.e. something like Java runtime environment, .Net framework, Flash etc. So the homebrew developers can create and run some managed code in the corresponding virtual machines to enable applications like tic-tac-toe, reversi etc, and commercial game developers can still sell games created in C/C++ running in native mode. For some non-trial applications written in managed code, the homebrew authors can choose to sell it via xbox arcade or by themselves.

First, I'll agree that most modchips are probably used for playing pirated games.

About the homebrew, though. The PS3 is supposedly going to include Linux. Thus, Sony is officially allowing homebrew. Why do they do that? Despite being more expensive than the 360, they're still losing money on every console sold.

Why can't Microsoft have something like Xbox Media Center on the 360? Yes, I know you're trying to sell media center PCs, but not everyone wants one of those. The DVRs of cable and satellite providers are more convenient. And why doesn't the 360 support DivX at all? I know an official product like XBMC can't be released because of all the patents it's breaking, but you could at least let the users buy a DivX licence.

And to Spud_Hed, how are imports illegal? First, if your country doesn't respect the copyright of a particular game, it would be legal to pirate it. Although, because of international copyright laws, I don't know if that ever happens.

If you're buying the actual item, and the makers/publishers get money, I don't see how it could be illegal. Perhaps the retailer who sends the games to other countries would be breaking their contract with the publisher, but I'm guessing most companies who do that don't have such a contract barring export.

As to bypassing region locking, I don't know if it's legal. It obvious seems like it is with the Gamecube and the Freeloader, as Datel didn't get in trouble for selling that.

Why I am modding my Xbox:

1) I have 50 games for my Xbox, its a hell of a lot easier to install a big hard drive and rip them onto it and bring just my machine plus controllers to school than carrying a bunch of games cases that take up a bunch of space and are at risk for damage etc - plus they load near instantaneously.

2) I'm a Mac user, and so far I have no option to stream any media from my computer to either my Xbox or Xbox 360... that and XBMC is a lot better than anything out there.  Maybe if Microsoft just supported simple Windows sharing and SAMBA that any OS can work with to share media it would not be necessary?  No, I will not buy Vista to do this - you are on crack to expect that :)  Maybe if you guys supported a protocol that any platform could use there'd be less reason to hack your machine to work with it.

3) I don't play XboxLive on my Xbox 1 anymore.

Sorry, but your arguements just don't hold any water.  Imports are completely legal and mod chips are great enablers for people to play games that publishers won't release here.  I sure would have loved to give Thousand Lands on Xbox a try, and I get pissed off when I hear Square won't be bringing Project Silph for Xbox360 to America.

As for the piracy boogeyman.  I know it makes an impact, but people who pirate mercilessly are going to do so... but I'm completely legit with my game purchasing.  Its the same thing as why DRM sucks.  Sure drm-free media can be "pirated" but why should you punish the legit people?  Those who want to pirate will get around your security anyway.

When you buy a console, at least in the case of the Xbox 360, wasn't there a legal document that popped up on the screen and users had to agree not to modify the console? If so, this is a legal binding agreement that you won't mod a console or illegal pirate software.

When you bought your console then you would have already agreed thus giving up your argument to make later that it is 'your console' and you can do with it what you like.

A game console is more than just an item like a car, it is intellectual property.

The Ferrari argument still holds water because even though you aren't stealing the Ferrari you accessed it with the explicit idea that you would make an exact duplicate thus stealing the worth of the vehicle based on the original plans, concept, research, and engineering.

If you studied how cars are made and then made one on your own it would be a different story but you would be making an exact duplicate of the car based on their designs and that IS stealing regardless of the fact that there isn't a missing physical object.

You have money in your wallet that you earned but that does not give you the right to duplicate it because it devalues the overall dollar.

A ferrari has worth to it, and pardon the pun but it's grand theft auto to steal a vehicle like that.

Copying it exactly and using it so you don't have to buy one is similar to counterfeiting and stealing the intellectual property that went into that vehicle.

If the console is yours would you then argue that you could duplicate it and sell it to your friends? After all, it's your console.

Back in the 80's we had a cable service known as ONTV. After a while homebrew people started copying the hardware and selling it so that other people could watch movies without paying. This caused the ultimate demise of ONTV and should be used as a model in comparison as to why the hardware should not be modified.

I'm in the UK, and I'm another person who has put two and two together and knows that region locking is mostly about price and release date fixing. The added bonus to this is some games just aren't released here at all (stuff the US gets, as well as the stuff from Japan), and "officially" there would be feck all I could do about it.

I haven't bought an Xbox 360 yet, but frankly if the Revolution or the PlayStation 3 are really region free, that would make them far more appealing to me, as I'm fed up of being ripped off (or just not getting games). If they aren't region free, I'll have to take the slightly less flexible approach, and buy a US system instead, even if I'd miss out on some of the Japanese / European stuff. (It's a bit late for the 360 of course, unless Microsoft forced all new games to be region free, instead of their current policy of leaving it up to the publisher).

"The bypass of geographic regioning is also harmful in a lessor in the sense that certain sales and marketing efforts were bypassed"

Ive seen this one and similar a few times in this thread, why the hell should we care, if i already want the game anyway the marketing has absolutely no effect, unless of course i see an advert and think "actually that looks utter sh*te" then i dont buy it and revenue is lost

"The desire to play import games is at least a reason I can rationally understand, but cannot condone."

Is this really you speaking, or your employer?

Speaking as both a game developer and consumer I have trouble believing that this could be your personal view, and am amused that you frame the issue as if there is actually a philosophical or moral debate here.

As long as the goods are genuine and properly paid for, nobody has a right to whine. As a developer I can't imagine a reason to be upset that someone in a foreign market would go to abnormal trouble and expense to use my product; I would take it as a compliment (and maybe a hint...). I'm also annoyed by your implication that proper language skills or culteral upbringing are a requirement to be allowed to play certain games.

I have a bit of personal experience in this regard as I am an American who has lived in Japan and have experienced region encoding/arbitrary compatibility issues first-hand. While in Japan I bought Japanese games and DVDs, yet the only way to use these disks on my American equipment was through the use of boot disks or hardware modifications; I take it you do not have first-hand experience of how frustrating it is to take your laptop to a foreign country to live and then have to jump through hoops simply to play media that was purchased right off the store shelves. What do you believe was the morally correct solution to these problems? Was it wrong for me to attempt to use Japanese media with my North American electronics or should I have bought a Japanese laptop, DVD player and consoles while I was in Japan? Was I wrong to have even purchased the media in the first place since I was not member of the correct target culture and perhaps my language skills were not at an acceptable level to enjoy the titles properly? Would you suggest that having returned to America it would be indecent of me to ever view any Japanese media that was not vetted as safe for my delicate American eyes? Should I have resold or discarded all media purchased in Japan before returning to America?

I'll give you another example that may help put things in perspective. While I was in Japan I purchased a small, battery-powered Casio alarm clock. I brought it back with me and it is the same alarm clock that woke me this morning. This clock is not available in North America, so would you argue that it was morally incorrect for me to use that clock? That argument would be utterly absurd if it were applied to anything other than video games, movies and music- I argue that it is absurd in the case of games, movies and music as well, but the publishers have somehow succeeded in manufacturing an argument that it's OK to tell people what they're allowed to do with product they've paid good money to obtain legally. The use of cultural purity as justification for this is utterly baffling- maybe you guys should research DNA Coding as a successor to Region Coding. Better yet, adapt that awesome Vista speech-recognition technology to administer a language-proficiency test before allowing media to be viewed or played.

Oh and by the way, it's also possible to see things from other countries on the Internets. But don't tell anyone.

Re: "The desire to play import games is at least a reason I can rationally understand, but cannot condone."

Is this really you speaking, or your employer?"

That's me speaking. :)

I may have a different perspective because I've spoken a lot to publishers and developers who feel they have legitimate reasons to region-lock games. I certainly respect you may feel differently, but make no mistake, everything on this blog is my opinion. :)

Well, I can admit I have a modded box. I had it softmodded and put in a larger harddrive. Reason: not to have the ability to pirate games, but to put all my games on the harddrive. We often play with some friends in LAN network games and it saves me from carrying all the game cd's around and the possibility of scratching them. I carry all my games with me on the harddrive and the originals are save at home. Other advantage: backup the savegames to the PC. Some games, like Farcry can download a unlimited amount of maps when playing online (with KAI for instance). This way I can backup those maps and share them with friends.

All of these things that can only be accessed with a modded box, without the infringement of copyrights (because you are alowed to have one private copy for personal use... as long as you have the original) and the use of KAI is not only for playing with pirated games on modded xboxes, but can also be used as a perfect free alternative to Xbox live (and that is just some clean and honest competition).

just 2 cents.  i cannot stand your reasoning for imports.  in my opinion, all region specific media should go the way of the dodo.  for a lot more reasons than i care to post in a comment.

i am the one who decides what media i want to consume -- localized, regionally priced, no matter what the silly reason -- and not the media creator.  end of story.

m3mnoch.

Couldn't a solution for those that are chipping because of reason 2) importing software

be for the platform holders to offer the kit at retail in the form of a peripheral or upgrade disc, to allow play of games from other regions?

At least this way, the gaming industry actually benefits from any imports (through the peripheral sales needed to legally play the discs) and no excuse can be tendered after that, on the grounds of enabling import software, for modding the console. The platform holders, I would imagine would know their hardware and code better than a mod chip installer, and I believe would be able to offer a sensible, fully-supported solution to consumers, if they wanted to.

The solution in other words, is to remove the reason for the modding. (much like Microsoft removed the reason before over media playing with the 360.)

The thing is, that at least to me, the desire to play a game (often that I may have been eagerly supporting and awaiting the release details of, during development, to then be told that "unfortunately, we will not be releasing the game in your region"...What's that!?!)

is the thing that drives console sales to begin with. The console is intended to allow me to enjoy the games that I want to play.

Region-free ought to be adopted across the board for games, and it's an archaic disservice to gamers while this doesn't happen. While publishers may say that it hurts their sales figures, I say that it invites a broader sense of and collaboration, and is in fact more likely to be beneficial to gaming in general.

In addition, gaming draws on influences to create new experiences. Why are developers limiting themselves to those influences and ways of thinking of only their local region? Isn't that only aiding a sense of stagnation?

Opening the WORLD of games up to all, really would usher in a fresh, and exciting generation, I feel.

A couple of counter-comments from my part then regarding the previous previous reply (hell, it took me quite a while to read everything posted since yesterday):

" - About the hardware modification to add extra features... well... while I do understand in part your point, sometimes this comes to an incredibly ridiculous point (such as the need to purchase a remote controler to be able to play DVDs on my original Xbox when it is fully capable of doing it on its own).

 - Actually, this was done this way so that not every Xbox user would have to pay the codec licensing fee to enable DVD playback... which wouldn't be fair, since not everyone wants to play DVDs (vs. games) on their console."

While I understand the point in there (yet not share it) lets get that reasoning applied in other circumstance. Imagine I dont have a home theatre systeam and I am actually using the TV speakers for the sound, why should I pay just like everyone else for the Dolby Digital chip on the board (included on the box price) if not every Xbox user wants it? Same could go for having a bundled HDD or many other parts (I am actually stating the HDD since it was fingered as price increase excuse over here by many ps2 fans which argued to be unecessary... they are not complaining now of HDD on PS3 though, go figures). In every console there are parts that not everyone needs or wants, thats for sure, and while I share that whoever wants a fishing rod controler they can get it separately since it is a very concrete thing I wouldn't say teh dvd playback is such a rare thing for people to want it (I am talking about the playback capability, selling the remote controller separately as accesory I find to be perfectly fair)

" - [snip] what would you do if your favourite xbox360 disc gets scratched so you cannot play any longer? I had luck with my music disc because I had a mp3 copy on my hard drive and the cd player on my room accepts all kind of discs, but that is not going to happen on the console without modification. Would the game publisher give you another copy if you present the scratched disc?

- Actually, if you look at the back of most game manuals you'll find that warranty information that tells you how you can get a replacement disc from the publisher. I did a quick unscientific survey of a few games I had on my desk today and they all had a way to get a replacement (albeit after proving you originally owned the game, either by sending in the damaged disc, showing a reciept, etc.) So I still don't understand the "backup" argument."

While I do not distrust you in any way, you actually made me go and check quite a few manuals at home. First of all, I do not own a x360 but an old xbox, but I doubt this procedure you describe is new for 360 games, I guess it is for every kind of game but if I am wrong please let me know. Having said that, I actually checked the first and last pages of 63 game manuals (between PC, Xbox, and Dreamcast) I have at home at the moment, 62 didn't contain such warrany you describe. All of them described however that if the disc had some kind of fabrication defect you could return them to the publisher directly in a variable time space (generally 90 days). However, my USA imported Gabriel Knight Collection game did had such instructions, although not applicable to the whole package (that edition contains GK1, GK2, Patches/Manuals/extras disc, OST disc and some printed goods like the official GK novel - package that never reached my country) and neither precisely for free (even if I lived in the USA). I must also say that some of the other 62 manuals looked like having something that looked similar, but never on the spanish (or the english, I would have understood it) part of the manual so I can't really tell if I am correct on my assumptions or not. I guess its a matter of publishers coverage on certain countries, but not eve

Hi,

I have a problem I know a modchip can solve and there are no other means of solving it. If you do know other means of solving this problem please tell me. I made this post on Xbox.com forum a while ago.

"Hey I think the Xbox 360 is an almost perfect console

the only thing that keeps it from being perfect is the region lock on games. I bought a UK version of the 360 however I am moving back home in about 2 weeks, and over there in Thailand they sell Asian region games. What am I supposed to do? I don't wanna import games cuz the import tax of anything thats on DVD is 300% thats just lame.

I have no options at all but wait for a modchip. I really dont' wanna hack my 360 but it seems to be my only way out now. I don't wanna buy a new 360 as well cuz this one is all personalised and its got my stuff on it which i don't wanna lose.

I wish microsoft would do something about this. Region lock will only drive me towards piracy. Rite now the only option i have is install one of those DVD Firmware hacks (there are stores that do it in Thailand) however for now I have decided against it as I don't wanna hack my 360 just yet. I will just not play it for a while to see if MS is going to do something about it. I don't think MS will do anything about it but its worth a shot anyway.

Major Nelson

J Allard

Peter Moore

Please help me solve this problem. Hacking the 360 would be as easy as stealing candy from a baby for me however i don't wanna do it, but if i have no other choice then, well i have no other choice. I bought my 360 to play games with this region lock thing i can't play games at all (except for the region free ones but thats not enough) at least with the firmware mod thing I can chip it and download the ISO for my 360 without paying import tax.

Another solution would be do digital distribution! I am there guys I am all for Digi Distri.

Anyway Thx Hope you guys can fix this region lock thing, its lame and it doesn't prevent people from hacking their 360."

An interesting thing about the psp and homebrew is I believe Sony's constant updating of the software to disable homebrew hurt sales of new games.

I often struggled with the choice of buying a new game because I knew it required an os update.

For the past year I bought no new psp games even though I was tempted to, and if I knew if I could keep  my homebrew, I'm sure I would have purchased some games.

"The desire to play import games is at least a reason I can rationally understand, but cannot condone. Sure, there are games you might want to play that are either released earlier or, quite possibly, not released at all in your region. But sometimes companies have good reasons to either not release a title into a region or release it at different dates..."

I agree with most of your other points, and I understand what you are getting at with this paragraph, but you mis one other MAJOR reason people import games (at least for me and my friends).

COST

When a game such as GRAW for Xbox 360 sells for US $39.90 region free from www.play-asia.com, yet sells for US $90 locally here in Australia - this is an absolute joke. The local market, whilst I agree is smaller than the world market, is making a killing on these prices.

If Microsoft and the game companies truly get their money back from game sales - then they should be the same price World Wide.

Regards,

Shane.

   Nice blog, Ozy.  One thing I'd like to point out.  You asked, 'You don’t steal a Ferrari that you’d love to drive simply because you can’t afford it, right?'

Wrong.  I wouldn't steal a Ferrari that I'd love to drive simply because I can't download it.

Modchips are the way customers take back control of a hardware piece that they bought and if it ruffles the maker of the hardware, oh well.  Just because Microsoft and other companies have chosen a path that makes a loss from each sales to make money off the games don't bother me none.  If I desire to run the Japanese version or UK version of a game I bought, then a little thing like region encoding is an artificial method for the company to control the money flow.  It has become a nightmare for people over the software is not a product in the traditional sense, while companies soak the consumers for every penny they can snag.  If car companies released vehicles as poorly done as many software packages have been, then they would be sued out of existence very quickly.

'Actually, if you look at the back of most game manuals you'll find that warranty information that tells you how you can get a replacement disc from the publisher. I did a quick unscientific survey of a few games I had on my desk today and they all had a way to get a replacement (albeit after proving you originally owned the game, either by sending in the damaged disc, showing a reciept, etc.) So I still don't understand the "backup" argument.'

Ha.  I used to work for Lucas Arts technical support.  We'd get calls all day long about people wanting to return their games.  Because of piracy, we've had to up our ante concerning new copies of games.  They've got to have the receipt, the serial number, the discs to send in, and the original packaging.  Please.  And if they've had the game for more then a few months?  Screwed.  It's a whole process that in the end is not worth it.  This is why when I get a game, I back it up.  Period.  I'm not taking chances with half-ass companies who, once they've gotten your money, feel no need to adequately help you if your disc is scratched or otherwise.  Go ahead!  Get yourself a copy of KOTOR, scratch it up real nice, and let it sit around for a few months, and then call up customer service and see how easy it is to get a replacement game.  I dare you.  

"Problem is A) this model already exists (it’s called a PC), and B) selling a console at PC prices (especially with the capabilities the console has in it) would simply be too expensive and no one would buy it."

I'm sorry, but I cannot accept this as an argument. If any company thinks that the ONLY way to gain revenue is the razor/razor/blade model, than they're not thinking hard enough. In the last generation, Nintendo was the only console company with a healthy profit BECAUSE they sell their consoles at a profit, as compared to Microsoft and Sony (which is the market leader with the PS2 at over 100(?) million shipped) losing badly in their respective gaming divisions, due to this flawed business model.

I've always wondered why microsoft didn't just create a public dev-kit for creating homebrew for the xbox. You could keep all the security for games, but enable some kind of scripting engine for homebrew. They could even offer some homebrew downloads on xbox live. It seems to me that this would be a good way to defeat the "modchips for homebrew" defense. I know that would probably stop me from using a modchip... probably.

I'd also like to add that your Ferrari argument doesn't hold waters.

Ask youself this question, if there is a ferrari parking around, and you had the chance to take it for a ride, and you just have to go through a few rough terrain to get to the keys, but you think to yourself

"hey i can drive this ferrari and anonymously which means i won't get caught it just means i gotta go through this obstacle(modchip) to get the key."

I am sure you won't say no to that.

Most people will steal stuff if they have the chance of doing it undetected its the basic law of human beings, and you can't argue with that since its one of the reasons why people pirate, they have the chance of getting something for cheaper WITHOUT getting caught, so they will do it.

Personally i buy all my games(for now, but in the future if i have to keep importing games and paying import tax then I will chip my console so i can download games and play them. I don't mind paying for games but I do mind paying import tax on every frkin game i wanna play).

Ozy said: "The console business is a razor/razor blade model. Hardware (the console) is subsidized (meaning Microsoft sells it at below cost) to make it easier for consumers to get it into their homes"

As someone pointed out on Kotaku, Nintendo don't sell consoles at a loss.

It's not the consumers fault other companies can't get their *** together. If Sony and Microsoft can't operate in the market without hamstringing it, maybe they shouldn't be operating in it.

And whilst I'm against piracy, mainly because I work in the industry, I'm yet to discover one studio that's been shut down directly due to piracy.

Maybe if publishers and companies didn't pay those higher up in the company millions of dollars in salary a year, there would be more money to spend on developing games and keeping studios open.

After reading all this it seems like he's missing the boat on alot of issues. The main problem is the old Xbox had a hard drive but didn't have enough applications added to make the HDD useful, people modded it and allowed for useful applications such as a web browser and a way to back up the games you owned. The reason they don't want homebrew or a homebrew community is becuase I believe and not 100% certain that they want to charge people to exchange user-created content and homebrew is a free product and if there was too much free stuff then people wouldn't have any free time to buy more stuff. I think everyone isn't looking at the bigger issue, that is whats free? I can almost guaruntee when theres future Xboxs there will be more services you have to pay for, more products you will want to buy that don't come free, and the stuff you took for granted as the free part of the software will start to cost money or will have more DRM restrictions to increase profit and limit and sharing.

Modchips are a positive benefit to the gaming community-

If you have ever played a game on XBConnect with modded maps you will realize that when game publishers stop selling map packs people can make their own maps and then use them on XBconnect with other people with the modded maps.

MS might argue that MAP TOOLS built into the game are adequite but I highely disagree and theres definetly a limit to the allowable amount of map changes that are available in the USER CREATED CONTENT TOOLS built into the game. Has anyone ever played a decent custom map that wasn't built using a modded system and just the games MAP EDITOR that comes with the game?

People want their game system to do more then just play games and they would rather dictate what that is, my proposal is a creation of WIDGETS for the 360 that allow user created plugins using a custom MS widget code that doesn't allow for illegal uses or can be moderated via XBL updates. I think all this custom application software could be done under a MS allowed code for customization with a Widget Download section on the XBL Marketplace, this is the answer to the homebrew question.

Should XBox 360 be allowed to play import games? Yes, theres no point to regioning game systems and usually games of different regions cost more then the local games so it isn't really about profit. I think personally they should sell Japanese versions of games in all game stores in a Japanese language section so if the game comes out 3 months earlier you can buy that game and then the english version of the game 3 months later, thats double the profit for the game companies and I don't see why they wouldnt agree to that?

So really in my opinion theres only one bad thing about modding which is people who use it to cheat on XBL but theres people who standby and bridge who don't use any cheats so let me ask everyone is Modding the problem? or is the inability for Bungie/MS to fix things non-modding related such as bridging and standbying a much larger issue?

Great Post!  You sure chummed the waters with this one :)

Personally I agree with most of what you said.  I see little benifit to modding a console.  You want custom content then buy a PC and NWN.  Worried about needing a backup?  Stop being such a slob and treat your discs with care.  Want to play an import? Well, there you're screwed.

For those that think piracy is "sticking it the man" let me know where you work.  If you are flipping burgers then e-mail me in a few years when you actually have a job that matters so I can pirate your work.  I agree that a lot of jobs have too high a salery for the ROI but it seems that people that used to have a Robin Hood complex suddenly turn into Donald Trumps once they actually start making that much money.  Oddly enough they get very quiet about cutting their own salery.

On a side note I think I'm a little scared of some of my "fellow gamers", people like "Ti22" that will obviously steal your car if you leave your keys anywhere near him.

Just because thats the nature of the general public. Doesn't mean I am that way. I work in the industry, I buy all my movies, games, music.

In my group of friends I am the one evangelizing about how people should actually buy stuff rather than steal it. I don't mind spending money on media I think that money is well deserved

All i am saying is the argument the author of this blog is using for piracy doesn't work

The analogy i tend to use is "people have no problems paying for tangible objects like ipods a new computer, cars couches etc... however when it comes to intellectual property you guys all become stingi, why is this?" now when i ask them this question they shut the *** up and listen to what I have to say. I've even gotten alot of my friends to admit to that piracy is wrong. hows that for evangelizing, I've even convinced them to actually buy media be it games music or movies.

I believe piracy is wrong. But just because i say what I think the world believes in doesn't make me one of them, I am just stating the root of the problem.

About the Ferrarri argument that THEDEANOFGAMES brought up, there is no intelectual property on Ferrarri for me to illegally bypass.

If I build a Ferrarri from scratch, from bits and pieces I legally buy it's perfectly legal for me to then drive that Ferrarri anywhere I damn please.

Admittedly I can't sell it as a Ferrarri, because as far as marketing is concerned I can't legally call it a Ferrarri.

Intellectual property on the console? I don't think so, on the coding and programming yes but in the same way as a Ferrarri if I customise a PC to the exact specifications of a 360 then use it to play 360 games it's perfectly legal.

I sincerely have to disagree with your comments against modding for import reasons.  While I agree that the modchip enables other "features" that can and usually will include piracy, I have seen no evidence where the PSP, DS, Gameboy Advance, and Gameboy (Color) have lost intense revenue due to being region free.

I am an avid video game collector with a collection of over 2400 games (visible from my URL link).  I've been playing and collecting long enough to know that most people who import games will end up purchasing the US version (as long as it's not butchered by a US "localization" team).  This in turn supports your razor/razor blade model because you're getting multiple purchases from the same buyer on the same code (with the exception of translation costs).  I see no logical reason why any company would want to lock consumers out of purchasing legitimate software just because it's intended for a different country, especially when the alternative ultimately opens the door to feeding the uncontrollable pool of piracy losses.

Some companies attempt to sway public opinion by making such limited generalizations to explain their view of piracy and their loss from this act and ignoring the industries benefits from piracy. These benefits are never mentioned and one of the greatest may be in consumer training. Mp3’s are a fantastic illustration of the benefits of piracy. 50 years ago when the music industry was in full swing and operating with healthy profits music use was up by consumer stand points, but was limited to in use by availability. Music was generally consumed at that time by listening to your records on your record player, listening to your home or car radio, hearing small amount of music in films, or hearing music over a P.A. system of sort. With the emergence of mp3 piracy music consumption sky rocketed. Music is today such a part of life that it is to the point of saturation with music being part of TV commercials, movies, TV shows, and other sources of advertising revenue. Then there is the consumption of end users by choice. The youth of this generation are so used to the use of music in their lives that they take it with them so they can listen to it while they walk, run, work, play sports, and just about every social or reclusive activity. Piracy of music in my opinion and the availability of music to end consumers have benefited the music industry by training the end consumer to consume more and more and more. This situation makes it possible to sell even more product to the end consumer because they are so used to consuming it, but it presents the challenge of understanding how to sell the product in new and creative ways. Once upon a time if you wanted milk you bought a cow, the market changed and now if we want milk we buy milk in a carton at a grocery store. The market changes and how we sell to the consumer changes too. And no I wouldn’t steal a Ferrari if I couldn’t afford it, I would buy a car I could afford because the function is the same.

The razor blade model was an interesting illustration that made me think. It did not make me think about how difficult it is to maintain the delicate balance of making a profit from a market, but rather how the industry is blaming the consumer. Blaming the consumer has historically been the bane of business. Would you shop at a store staffed by employees that insulted you as you shopped? If the model does not work I say the model is wrong, not the consumer. I believe that blaming the consumer for not doing what you wanted is ineffective in solving the problem, but understanding why the consumer is doing other than what you want is the first step in finding a solution.

Hearing Bill Gates was presented with a presentation of a modded PSP and showed the functionality was fantastic. Hearing Bill ask his employees to think outside of the box to realize ways to allow user input and creativity in functionality in Microsoft products was refreshing and interesting at the same time. Clearly there is a reason why Bill Gates has made such a successful CEO. That man is obviously looking for ways to gain a competitive edge by doing what others are not.

My hope is that Microsoft does establish ways of allowing user input and creativity to increase functionality in their products. A mod chip in my humble opinion has supplied the creators of consoles with some incredibly valuable marketing information and function creation. With mod chips end users have actually been able to create a function that end users actually want. If there was no true desire for this function then an end user would not create it as there is no profit motive, only function motive. It has also supplied endless consumer requests for functions that have become distilled by the small yet vocal mod chip community based upon the ability of the console in question to perform these requested functions, the technical ability of end users to create, and the honest want for such a function. If the desire is strong en

What the hell are you talking about with your "razor/razor" model? The fact that Microsoft sells the Xbox 360 at a loss doesn't affect ownership of the console. Once I pay for an Xbox 360 it becomes my property and I can do whatever I'd like with it, including enabling any legal homebrew applications that I chose. Implicit in your arguement is an underlying assetion that all homebrew applications are illegal, and that adding additional functionality would dissuade me from purchasing peripherals or services. I would argue that letting users trade legal variants of a OS/SDK would boost Xbox Live subscriptions while giving Microsoft tangible data on what features their customers crave.

Mod chips are actually legal in Australia (Sony took a case to the High Court and lost(http://en.wikinews.org/wiki/Australia%27s_High_Court_rules_mod-chips_are_legal)), but only if they just circumvent region encoding. Now wouldn't it make sense for publishers for games released in Australia to keep prices competitive to prices elsewhere in the world so they gain more sales in Australia? Which in turn would leave no reason for people to have mod chips, which theoretically reduce piracy.

Piracy is wrong.

But selling hardware at a loss is a risk. Everything is hackable.

Im not a gamer, so I dont care about modchips one way or the other. If they were deemed illegal, Theres nothing stopping someone from selling a bag of parts so the user can assemble it and deal with the legalities himself.

Ask Bill Gates what he thinks of my GPS for my Sony PSP. (Link above)

If you build it, they will hack it. I think for many, the GAME is the hacking. They get more excitment out of sticking it to "the man" than playing stupid video games.

Tell Bill I said that & get back with me

Quote: "at the end of the day every game not legally purchased is simply stealing money from the creators."

This logic fails miserably. The truth is a lot of people would never buy the original game at full price, however, they play the copy since it's free or cheap.

Quote: "You don't steal a Ferrari that you'd love to drive simply because you can't afford it, right? Same thing."

No, not same thing. In this case the owner still have his Ferrari, you just looked at the car and created your own to look exactly like it.

I found your entry on modchips, specifically with regards to piracy, imports, and homebrew software, thought-provoking, although I do have to say I disagreed quite strongly with some of your reasoning.

I've started a series of articles in response in my blog at Rampancy.net. The first is:

http://rampancy.net/blog/narcogen/02082006/microsoft_and_modchips_part_i_piracy

Zimmy I agree but in this case you aren't building the Ferari from scratch you are making an exact copy, a duplicate from the original by backwards engineering the car.

If you built your own model car out of your own made parts and made it look like a Ferari that is another story.

You would be stealing their design, engineering, research, etc.

Speaking of homebrew software on the xbox 360. I wonder if Microsoft could release XNA framework to the public and maybe like an XNA studi express kinda thing. This would allow people to write managed code only which means its runing und a irtual machine which surely means they can block off certain features and lock the box down.

It's not an intellectual property, therefore copying it is not illegal. It is patented meaning that only they can sell anything with that design, the payback of their design, engineering and research is that they can sell the product.

I have no obligation not to use their designs if I have access to them.

The rules about intellectual property are somewhat different because they are a much more intangible product, even still there are people who argue against the ownership of such items. Whilst that is one extreme, it does highlight the fact that it's a different kettle of fish.

"The console business is a razor/razor blade model."

This is an interesting part of the op-ed. I'm curious if the writer would actually advocate making it illgal for me to buy a razor and then use it for a different purpose (say making little razor-sculptures) based on the fact that it's sold under a "razor / razor blade" model?

Don't get me wrong: I'm a bir proopnent of copyright and not advocating the stealing of intellectual property; but I cannot agree with restristions on the use of something I've paid good money to buy because "it's not benificial to the company that made it".

I'm sure you maintaing your car doesn't help GM, and let's not even talk about what you paying off your balance monthy does to the poor credit-card companies.

You base all of your "I can't condone this" on one, majorly flawed assumption.

We are not, nor should be, responsible for the success or failure of their business model. If it fails, it fails. You seem to think we are responsible for supporting it, when in fact, no such responsibility exists. To say otherwise simply means we are nothing more than technological peasants bowing to our lord.

Re: "Quote: "at the end of the day every game not legally purchased is simply stealing money from the creators."

This logic fails miserably. The truth is a lot of people would never buy the original game at full price, however, they play the copy since it's free or cheap."

It's a fair point - not everyone playing a copied game would necessarily have ever bought it at retail. However, it's also fair to point out that those people are getting the benefit of the content without paying for the experience.

I hate to detract from the genuine conversation and wonderful opinions and suggestions most are contributing, but I must ask:  How can statements like this really be thought of as intelligent?

by Matthias: "How come you think this is the way the average customer thinks? Personally, I couldn't care less if Microsoft makes profit with their console/games/peripherals or not."

Well, maybe you don't.  And I, for one, agree that most uses for mod chips are 'legit' or reasonable.  But how can microsoft NOT look at this from a business perspective?  How can they do ANYTHING that won't make them money, or aleast some sort of positive ROI?  Here's a way to look at it.  You all want a legitimate way to run homebrew apps and games on your 360 without modding it, right?  Well, what does that entail from Microsoft?  Let's say we go the XBL route one poster suggested.  All that programing has to be done, as well as planning, and then a dashboard update.  Infrustructure updates, etc.  Now, after all of this, what advantage does that give microsoft?  Now people can make games for free? apps for free?  How does that make them money?  Maybe it will sell more consoles?  But they don't make money on them either.  So where's the incentive?  To make YOU happy at their expense?  Now your comment seems reversed.  What incentive do they have to give YOU free avenues to destroy their business model? none.

Now does that mean I think its a great business model?  ehh.  Not that great for us.  But, ***, they are a business.  So the question then comes, how can they make this a Win-Win-Win situation?  I personally can't see how they can, at least not with the razor/razor blades structure.

Maybe the best way for MS to win the hearts of geeks is to use a model that lets both win (if one exists/can exist).  Find a way to show your users you DO care, yet find a way to make the sitution positive for the company.

Does that make any sense?  Am I treading where millions already have?

On a different note, I do hate the region coding, even if it's not MS's fault.  I want to play N3, but with japanese voices and english subltitles.  The Chinese version seems like it's just that, but I can't play it on my US x360.  That sucks.  I'm only worried because I'm afraid the US version will have no japanese option.  Does anyone know if that is true?

I own a PSP and I'm currently having it chipped.  Why?  There hasn't been a commercial game in 6 months that I've been even remotely interested in.  Therefore, I'm going to load up some homebrew while I wait for the next interesting title.

In this case, it's a case of having a razor but not being able to find any razor blades.  I'd love to buy some, because it's costing me as much as the original unit to make my "razor" compatible with other blades, but it's either that or use the same blade until it's duller than my socks.

I do own two PS2s (one of the original models [purchased when GTA3 came out] and a slimline) as well as a 360.  None of them are chipped and I have no plans to.  Why?  I've got a great catalog of games to choose from and don't need to.

As for imports, I think the argument given is bogus, but I've never found any title singularly interesting enough to justify the cost of the mod and imported software.  I do have a region-free, PAL-to-NTSC converting DVD player, however, and pick up BBC TV shows on DVD that aren't available in the U.S.  I'm actually putting *more* money into the market and my hobby because they gain a customer they otherwise decided wasn't worth the effort (i.e. putting out the DVDs in the U.S.)

Regarding homebrew software you said:

"That's the crux of the problem. If you can find a way to allow people to run homebrew software (and/or allow backups without enabling piracy), I think folks would be interested in exploring. But right now I don't think any of can point to a solution that doesn't enable piracy.

Am I wrong?"

There's one very important point that I'm very surprised nobody mentionned yet, somewhat related to the "attach rate" discution.

Every game released for Xbox or Xbox 360 has it's disc signed by MS and pressed under MS supervision. That way for every game and every disc sold, Microsoft gets a (most likely big) piece of the cake. Third party publishers can't short-cut this process as they're blocked by technical mesures.

This is how MS business model works, they create an artificical "monopoly" for signing and producing discs on their systems in order to gain the money they didn't gain when they sold their system. I use the word "artificial" as without the technical mesures designed to avoid third party to publish their own game on the system without paying MS, then there would be no monopoly of any kind on this matter.

Now, let's get back to the topic. If suddenly MS allows homebrew software to be run on Xbox 360, third party publishers will be able to publish games without the technical need to pay MS. No more money for MS. Oops!

So it's in no way in MS interest, and will never be in MS interest, to allow homebrew software to take full advantage of the system.

So what? It's easy to see that homebrew software, while it may "be cool" even in the eyes of MS, is *not* an option, and *will not* be an option for MS with their current business model. They even *have to* fight against it, by implementing technical mesures, otherwise third party publishers could legally publish games for Xbox 360 without paying anything to MS (this happened before, check http://wat.jeet.nu/copyright/)

Is it in customers interest to have this limitation? No. Is it legimitimate wishing to run homebrew software ? Yes. Can we count on MS to fulfill our wish? No, it's simply not in their interest.

What's the solution then? Modchips. Because MS can't do anything about it, that's the only solution to a very legitimate (and of course legal) wish, and until console manufacturer business model changes, it will always be.

The concern is that once homebrew software can be executed, it usually means that pirated games can be played aswell. This is wrong. But should we accept MS monopoly over Xbox 360 software and say goodbye to homebrew software because of this bad side effect? Of course MS will say yes. The customer should think about it twice.

Forgive me if someone already gave an idea of this (that's way too many comments for me to read through), but I believe a good way to allow homebrew without jeopardizing retail games is to create a sort of sandbox.  If you can play a music CD in an xbox that a person has burned himself, I think you could make it so a person could burn a game they made.  Simply put, you would have to have the standard protection you have now so that it recognizes a legitimate retail disk and checks the signature, but also have a loader for software that is homebrew.  Some sophisticated algorithm could be used to make sure no part of the code is stolen from a retail game with a woven in signature and if it checks out, allow the software to run in the sandbox that protects agaist exploits a little more than the retail game loader.  If necessary, you could even do a call home over XBL when trying to run homebrew software to check if it's something that should be blocked.

I think there are many ways around this problem and looking at the modding community, a profit could be made very easily by selling applications and games that allow mods and plugins and allowing people to create their own software.  I see a good move toward this with the 360's faceplates and media center capabilities as well as user defined content.  The more MS listens and observes the trends of its users, the better the console will become.

Another thing to remember: giving back to the community that supports you will also create a lasting bond and ultimately make more money for the company and make the users very happy.  When it becomes all about the money is when we have lost as a society.

I'm a X360 owner in asia.

LAnds of pirates! haha. Jokes aside.

After years of playing pirated games, I gave up.

They lack in tech support and whatever bad points u can think of.

And finally. Yes I do agree piracy is wrong.

An I decide to go the legal path.

I admit that the razor blade model is allowing us to afford a x360.

Basically, I'm comfortable with what x360 and xbl is offering.

The only thing that bothers me most is region lock.

The place I'm in is influence by both american and japanese game culture. In other words, I do play games from both region. I don't care if it's offer in japanese language only or not availle for sale here. IF it's not, I'll import it.

Either U do a worldwide launch on the same date or different date(but not too far appart). or do region free coding.

U will be suprised how the popularity increase for the x360 if the selection of games increases.

Don't worry about sales figures. IF the game sucks. nobody will buy them even if they are prices at $5 for 3.

Xbox live is a very good hinderance/prevention for priacy. I will not sacrifice the xbl function for pirate games.

Not allowing duplication of disc is als0 fine with me IF MS do disc replacement directly via their local representative. Not questions, ask for a small fee and the originals scratched surrendered. and we get a replacement disc.

There's afew thing I'm not happy is the functions of the blades. They are still not enough. OF course I know that MS do updates twice every year. Hopefully it will improve every upgrade. The previous update is good. Hope that MS carry on.

Now there's still a few things I'm wondering why MS never thought of.

Media functions. Why can't we plug in a usb HDD or flash drive and watch/play our contents thru USB devices? I'm sure this won't hurt anything at all? Why can't it play every codecs?

HDD. I can undestand that the 20gb HDD is cost issue. Why don't MS sells the HDD drive cage and let us put in whatever capacity HDD we like? IF content protection is an issue. WHy not make it as such that the HDD can only be formated by the x360 into the format that the x360 can reads and write? And finally as for the HDD content back up issue, Just let the xbox reconised any generic USB to HDD devices. And allows the contents copy to be controlled only by the x360 console. In this way MS will nto have any worries poeple able to read whatever source code that is governing the x360? eg. of this application. I buy a official MS HDD drive cage. Buy my own HDD. Assemble and plug onto the x360. The x360 detects the new HDD and format it for the x360. Then I attached my old HDD via a USB to HDD cable. USing the x360 console. I transfered my contents from the old HDD to the new HDD. There's not copyright or whatever issue here. IF MS is afraid of identity duplications. They can always make the software to "deactivate" the old hdd upon completelys. eg. "unflag.deactivate" the old HDD via some coding or serial number identificaions to prevent the old HDD gametag from logging into xbl.

IF a hacker is really interested in hacking, they can just plug out the curretnly HDD, disasemble it and attempts read the contents.

Ah, mod chips..  Like others, I both agree and disagree with your statements.

Piracy - No objection there..  It's a problem.  Of course, I believe that a lot of it is due to the high costs of software products, but that's really no excuse.

Imports.  Here I disagree slightly.  As Dan said, you bought the hardware, and you bought the software.  The only person losing out is you.  The *only* reason consoles (and dvd players for that matter) are locked to regions is because publishers want to be able to distribute to specific parts of the country at specific times.  This means that even though I can speak and read japanese, I shouldn't be allowed to import the latest and greatest game from Japan.  Why?  Because maybe there are plans to bring it to the US.  And maybe those plans even include a difference in price.

Beyond that, there is no real reason to prevent imports.  Everyone is making their fair share, moreso in that I'm also paying overseas shipping fees.

And lastly, near and dear to my own heart..  Homebrew.  It's interesting that you bring up the PSP as an example.  I have one.  I love it.  I play it all the time.  But I'd love to be able to program for it.  To me, this is a much more accessible device than something like a GBA which requires all sorts of extra hardware so I can get the programs *to* the device before I can even try them.

However, I find your razor/razor blade argument at ridiculous.  It's not my problem that the manufacturer saw fit to sell this device at below cost in *anticipation* of making money on the games and addons.  I wonder, how many games / addons goes the average person need to purchase in order to allow the manufacturer to break even?  Especially with the standard complaint I hear about how the high prices of games are necessary because of the cost of producing and distributing the games.  If that's true, then the manufacturer certainly isn't using games to break even.  And I highly doubt that I purchase enough addons, especially oem addons, to even come close to helping the company break even.

Regardless, at the end of the day, I purchased this piece of hardware.  I payed money for it and I now own it.  I don't see why I should not be permitted to alter the device to meet my own needs.  If that means adding in a chip to allow me to run homebrew, then so be it.  Realistically, I'd much rather the manufacturer would just put that functionality in to begin with, but so be it.  In fact, if I was able to run both homebrew and commercial games, I'd probably be tempted to purchase two devices so I have one that can be used for development...

I made some comments about piracy and DRM at the Wall Street Journal which I think are relevent here.  Notably that research doesn't support the "piracy is theft" contention, for (it appears) that getting free stuff doesn't affect the sum total paid for this kind of good.  See:

http://discussions.wsj.com/wsjvoices/messages?msg=3923.24

Naturally, when pirated good are charged for, there is clear theft (since it diverts resources from the creators), but piracy in itself is a simple abuse of trust, which is still a bad thing, but not a thing that deserves nearly so much legal and technical protection against it.

The "collateral damage" of DRM is simply too great, given that the economic damage is so drastically overblown.

At the end of the day it's really up to the publisher to decide. I can't speak for all the reasons that they might choose to not release a game in a region, but some of the reasons I listed (cost of localization, cost of making game suit regional differences, etc) may be some of them. I do think it's becoming less and less of an issue, especially as Japanese companies are seeing the majority of their future growth to be outside of Japan, and hence want to sell their games everywhere.

It's only up to the publishers to decide if the console-vendors allow the publishers to limit distribution to single regions. The DS is a prime example of the success that can be had by NOT doing this. Buy a Japanese game, it runs on an American or European DS just fine without modification. Instead of trying to dodge the valid use of buying an import game by claiming it's up to the publishers to decide what games get released where, explain what purpose the console vendors have limiting what games can be played where in the first place?

"Unfortunately, this argument ignores the fact that they’re buying that hardware at below cost, and it’s the razor/razor blade model that makes it even possible to buy at that price."

That argument makes sense for the hardware manufacturer, and I do understand that you're a mouthpiece for MS. But c'mon dude, it was MS business decision to release the console at those prices. Nintendo has gone on record saying that they've always made a profit on hardware. So am I supposed to feel some kind of moral pangs if I want to use homebrew just because you guys made the business decision to sell the hardware at a lower price point and take a loss? Give me a break! You got your trojan horse into my home sure, but I'll do what I please with it. Don't expect me to feel guilty just becuase one of the richest companies in the world realized that if they took a loss on hardware they could get it into more homes.

It seems that many MS' ideas IRT to the 360 came from homebrew software for the original xbox.

IE, they took XBMC and added DRM, and look what you get.. etc.

Not totally related to the topic, but funny.  MS couldn't come up with a unique idea if it bit them on the ass.

Piracy is wrong. No argument.

Region coding and DRM is wrong. Your arguments about costs of localisation and marketing costs are rather missing the point that people are happy and very keen to buy the games WITHOUT localisation and WITHOUT marketing in their country. Why shouldnt they be able to? If the PS3 really does come without region locks for games then all the better. I won't believe it until I get a real console though...

Homebrew is the most interesting point though. My Xbox1 has been modded for a long time. I have a pile of original games that I play but most importantly I have XBMC installed. XBMC is far and away the most used software on my Xbox.

I want XBMC on my 360. Simple.

The console business model is deeply flawed. Selling below cost (illegal dumping in other markets!) and making the money up with license fees on every software sale just leaves the manufacturers with a fragile position and the machine owners with a crippled system. Sadly its the model that is being applied so we have to work with it.

The solution for Homebrew is very very simple. Someone earlier suggested working though Xbox Live but I dont think this is feasable because average Joe user would expect a guarantee of reliability and security that Microsoft couldnt afford to give for anything that got uploaded. However we know that every 360 has its own encryption keys so instead sell me an XDK that is locked to run only on my console. I can develop my own code that only runs on my machine. I would expect that the actual signing process would operate as some sort of web service over the internet to ensure that any signed file are locked to the correct machine. This would all be quite similar to the mechanism RIM use to ensure that only registered and verified developer can use 'restricted API' on the Blackberry.

I would be very happy to pay just as much money for my personal only XDK as I am for the original machine. Based upon published estimates of the actual build cost of the 360 I believe this would more than cover what each box costs to make. The XDK itself already exists obviously, all that would be needed is the ability to lock to a single machine. Clearly we wouldnt have the facilities of a real debug machine but that wouldnt matter to the sort of people who developed XBMC in the first place.

Anyone developing for the 360 and wanting to publish would either publish source or pre-complied modules that I would have to link and get signed myself but again this really wouldn't be a problem.

I would also expect that anything developed would only run from the harddisk and there could also be a hard limit on resource of say 4GB that would inhibit anyone trying to use this as a end-run around the protection of original games.

There we go - a solution to running homebrew on the 360 that wouldnt decimate Microsoft profits and wont interfere with people ability to play games online.

What do you say Microsoft?

on the importing games thing:

"I may have a different perspective because I've spoken a lot to publishers and developers who feel they have legitimate reasons to region-lock games."

As you said earlier, you can't argue opinions.  You have to argue actual logic supported by external principles or facts.  Now i totally agree (as you state int he blog) that publishers probably have great reasons for not wanting to release all games everywhere, and certainly have specific reasons for specific games.  However you are using this statement to support the idea that users should not play import games, however it does not relate to it.  Its very possible that the publisher could have a good reason for not wanting to release a game (not a big enough market to recoup costs so the value proposition is unfavourable to them) and that a particular user would also have a good reason to want to import that game (because to them the value of playing the game is worth the cost of importing it).  Easily both of those situations could be true, so its clear to see that the fact that a company might have legitimate reasons to not want ot release a product in a region has no relevance to determining if a specific user might have legitimate reasons for expecting to be able to import and play that game anyways (if they are willign to go to the trouble of arranging for an import copy, playing the game with menus in another language,etc), which you would have to demonstrate was an illegitimate expectation before giving a rationaly basis for not "condoning the practice"

You offer neither reasons why the customer should not be able to do that, nor actual reasons why the publishers are legitimate in putting in region-locks (to stop people playing games that they themselves have decided already to not release, im not arguing over people in europe being able to buy the asia version game at less that the insane inflated EU prices, the publisher logic there is self-evident) in the first place.  As you say "you can't argue opinions" so it seems to me that if the publisher has the opinion that their customers should not be able to play imported games and the customers have the opinion that they should be able to, then there is no argument, and thus no basis for why the publishers should be able to put in controls to stop their customers from acting upon their own personal opinions.  In the absence of whatever these reasons are that you are hinting at or not saying, your argument on this point is utterly vacuous (and you cannot merely dismiss the other sides non-vacuous arguments by playing a de gustibus non disputandum card).

When you buy a razor--the assumption from the razor company is you will buy lots of blades.  But you are never required to use the razor to shave or ever buy a blade.  Should you decide the razor makes the ideal doorstop or window prop--so be it, you have yourself a window prop.  The Xbox/Xbox360 is no different.  I've bought an item and brought into my house.  If I want to tear the cover off, risk breaking the box, and find new uses--that is up to my ingenuity.

<p>

Microsoft sets the price of the unit--if Microsoft decides to sell the unit below manufacturing cost, Microsoft made the decision. Don't fault modders for buying under priced hardware.  Ever heard of kit cars?   Mechanics taking VW's and making them look like Ferrari's.  Why can't nerds take low priced computers and make them prettier?

Not allowing me to run homebrew code is like telling me that if I but a Ford, I MUST use exxon (or mobil, or any other brand) gas.  I paid for the car, I should be able to do what I want with it.  That said, I do agree with your other points, especially the one on piracy.

I may be alone with this, but I find the razor/razor blade model to be a bit deceptive and underhanded in the first place.  Now your angry that the victems of your best marketing techniques are not very loyal?  Suprise!

I still do my best to live in a world where the people I buy things from are honest and up-front.  I have no qualms with sending them home with an honest days pay.  But I feel no pitty for Microsft's losses trying to "Buy" a chunk of the gaming market with profit shifted consoles.  You did this to yourselves.

For all of the comments i agree except the importing of games. (besides its all about the money anyhow)

"But sometimes companies have good reasons to either not release a title into a region or release it at different dates. It may be because of the time and cost of localization, marketing plans, ad buys, cultural considerations, or perhaps even because of the impact of piracy in the region."

this does not explain really that most import games that are not pirated, are bought through distributers who pay those companies there asked prices then turn around and sell them overseas. so if the company has a problem with selling abroad, maybe they should stop places like lik sang and play asia from advertising the games FOR THEM and selling them as the middle men between foreign game companies and the importers.

I am a video game importer.  I have modified several of my systems to play import games.

I have a problem with your logic surrounding your stance on import games.

First, let's just call a spade a spade.  Region locking is all about maximizing profits by controlling what comes into the market and having price differentiation between markets, thus increasing the potential revenue from worldwide sales.  Let's not BS ourselves.  It all boils down to MONEY and CONTROL.

Next, if I get a system and I modify it to play import games, who am I hurting?  I mean, the only people I would possibly be hurting would be the domestic publisher who decides to bring out a foreign developed game, thus losing some possible profit when I decided to import the game six to eight months ago.

If I buy a legitimate copy of the game, the foreign publisher and developer gets their money, and I get a game that would never see the light of day in this country (contrary to popular belief, there are gamers out there who do not just play FPS and sports games all day and would like to play something different).

I can't possibly see any harm in importing.  I mean, really.  I have not heard one VALID argument that supports any reasoning as to why modding a system is bad if you are planning on legitimately importing games.

Here's the deal: If there is a game I want to play, regardless of which region the game comes from, I'm going to purchase it and play it, and if that requires me to modify my system, so be it.

If importing is so bad, then why is the Nintendo DS (a region free system) doing so well?  I've imported games on it and Nintendo seems to be pulling a profit on it without any problems.

BOTTOM LINE:

I want to play the games I want to play, not what Microsoft says I should play.

Ozymandias--

With regard to your razor/razorblade discussion, what you're ignoring is that no one is obligated to comply with your expectations and thus support your preferred business model.

For example, MS can invest a lot of money into making something, only to have it flop. This isn't indicative of a problem with the audience, it's your fault; you failed to make something successful. Likewise, if MS invests a lot of money into making something, and it enjoys some degree of success, but still doesn't recoup the investment, this is again your fault. This time, you failed to have a big enough success at your price point to recoup your investment or alternatively failed to move the price point such that a more modest success (and it would be less successful yet; higher prices generally mean fewer customers) would generate sufficient income to recoup the investment and make more of a profit than you would've with your best alternative investment.

Roughly, you're facing the latter kind of failure here. Let us imagine that I buy an XBox, never open it, never get any accessories, and just keep it in a closet somewhere. MS will have lost money on the transaction. But I'm still under no obligation -- whether real, or reasonably imagined -- to do otherwise. You have simply failed to find a way to have me as a customer that you find acceptable. The onus is on you to either drive me away or find a way to profit off of me.

This ultimately brings us to the people who buy XBoxes for purposes that don't fit with your razor/razor blade model:

Simply put, in order to have the razorblade model which you find successful for the vast majority of your customers, you are going to have to accept the fact that there will be some customers that act contrary to your desires. They're not obligated to do what you want, so the only way to make money from them is to raise the price of the product.

If you do this, however, you will a) get more money from some of the modders, thus helping to recoup your investment, b) discourage some of the modders, thus not causing you to lose money on the razors, and c) lose some of the main base of customers, who probably far outnumber the tiny minority of modders.

Because of (c), you will probably end up losing more money than you'd make.

The answer then is to simply tolerate the modders. You can't stop them without losing more money than they cause you to lose now. You are already in the best position you can be in with regard to them. Since you can't make your situation better, you should avoid trying to make it worse.

DRM is an attempt to discourage them from buying from you without altering the price or discouraging your target customers. But it's pretty clearly a failure, or else we wouldn't even be having this discussion. I would suggest an alternate plan: if you can't beat them, join them. If they don't want to buy the razor blades you sell to most people (e.g. games) then find different ones that they would buy (e.g. tools for their homebrew software, more professional versions of the kinds of things they like, etc.).

After all, saying that you don't want this type of modder is like saying that you don't want people who like platform games, because you don't want to make platform games, you are taking steps to prevent them from being played on your system, and gamers who play them anyway are just costing you money on the razors.

Treat these people like gamers who like nigh-impossible puzzle games (e.g. Linux) and you'll do better. But there's obviously no way to get rid of them that both works and doesn't cause more harm to yourselves than it is worth.

Re: importation, there are good reasons to be against it, but none you've touched on. And in any case, with regard to both importation and piracy, DRM is not an acceptable solution. I for one hope to see the law changed so that DRM is virtually wiped out. It's really intolerabl

As a European gamer, I would have missed out on some amazing games by not chipping my first PS2. Xenogears, Final Fantasy Tactics and Valkyrie Profile are probably the most notable.

What I don't understand is that I can quite legally sidestep this problem (and in fact, this is what I do with consoles these days, since modding is becoming more expensive and difficult) by buying a US console. I can cope with the power and video standard issues. Yet this approach actually costs the console manufacturers more money, because now I'm buying *two* sets of subsidised hardware instead of one.

But, if you want to keep sticking your heads in the sand, who am I to stop you? All I can do is find my ways around your lockouts, and be sure, I will.

Ozymandias, I work for, about, 8 years in the field of technology. My wage, after 8 years of working, with 20 years of experience in the field of computers and quite a bit of knowledge on different systems, networking, multimedia, design, troubleshooting... you name it, orbits arround 800 euros. And that's considered a "high" wage for people in a similar position as I am.

Now, let's deconstruct this wage...

I need about 400 euros per month for rent.

I need at least about 200 euros per month for food.

I need at least about 200 euros per month for "general expenses" (well, I have to -GO- to work to get paid, haven't I?).

I need about 50-200 euros per month for clothes or other not-so-important-but-nice-to-have stuff, but I don't have them.

I need about 50-200 euros per month to keep my PC going (and thus "stay in the business"), but I don't have them. So, I "shave" money from food and "general expenses".

I need about 50-100 euros to have fun once in a while, like any human being. But I don't have them.

How much did we say a next-gen game costs? About 1/10th of my wage? And some people still wonder why piracy flourishes in some countries...

Let me close reminding everyone why piracy is "bad". Piracy is "bad" because the last best game on the Amiga platform, Capital Punishment, was programmed by poor teenagers with "stolen" (that translates to "pirated") compilers. No company did anything to help them. No company offered free or cheaper software. No company aproved of what they did. And what did they do? They created the best beat'em'up on the specific platform, a wonder of code, graphics and music. And I guess that although they too wouldn't like to see it pirated, they'd at least recognise that for some people that would be the only way to see it.

So, piracy led to the creation of one of the best games on a platform, and I guess there are many more examples we don't know off. So, piracy is not "generally" bad. If you cannot afford it, and you MUST have it, yeah, pirate it. Pirate it and buy it when you CAN afford it. The problem, ofcourse, is that companies cannot say that to your face, for then noone would ever buy any software...

Now, ofcourse, if Microsoft, Ozymandias and any similarly-minded indivinduals continue to full-heartedly disagree, and completely support their opinion that "piracy is bad"... Well, if you believe that piracy doesn't have any benefits, I'd like one honest answer: would you prefer people using pirated versions of WinXP, or the totally free Ubuntu (or any other Linux distribution)? Would you like somebody buying a moded Xbox, slapping a modchip and XBMC on it and start raving about it to his friend, or rather have him "pirating" (and, as you say, "hurting the business model") of the antagonistic PS2? Hey, thats actually a good idea! Do an ad campaign, promoting how easy it is to pirate PS2s games! It will do wonders on Xbox's sales! That's what you want! Ain't it?    ;-)

I guess that Microsoft, among others, has allready answered through its actions to this question. So, why bother talking about it?

:-)

have you ever tried to see it the other way round: The business model sucks, not the mod chips... imho, if you buy a piece of hardware, it's your natural right to play around with it. if that conflicts with a buisness model, you have rethink the business model, not the other way around. nobody told you to sell xboxes below price....

"These modchip defenders tend to use one of three arguments to justify their use:

   * the ability to copy and play pirated games"

Come on now.  I'm willing to accept people have different opinions but this was just totaly bogus Ozy and you really should go back and edit it.

No real modchip defender has ever claimed that piracy of games is a "justifiable" reason to allow modchips.

Many of them might try to claim "backups" as a justifiable reason then turn around and pirate stuff but none of them go around using it as some sort of defense as mod chips.

Also on your comments about producers and imports:

Do you really believe what the producers want matters? I mean there comes a point where you have to say what a company wants doesn't matter.  A company isn't a human.  Investors don't get to take peoples money just because they want to.

The industry has really shot themselves in the foot for a long time now by doing this regional stuff.  All it does is give the modchip people a truely legit argument which trumps every argument against them.

The issue I don't understand is why a company insists on selling what is essentially a PC at a loss simply to sell more periperhals.  Why not sell kits to  convert your existing PC into a console?  From what I understand about the original xbox Microsoft took a huge loss on it when it first shipped.  What I also understand is that the original xbox was just a pentium III with some modified USB ports, decent graphics, and a paltry amount of RAM. I would imagine that most people who own an xbox already owned a decent spec PC that would likely exceed that xbox specs.  Why not sell them a console-grade graphics card with TV out and specify a rigid set of requirements for the Dashboard software.  Granted in 2001 the instant-on functionality would not quite be there (perhaps Robson caching or the similar hybrid drives could offer this today), but I have peripheral cards that interrupt the boot process and I would imagine the same could be done and the console software could be launched from a special partition ala Apple's Bootcamp.  The way I see it MS could sell graphics cards, controllers, and software and perhaps even make a PROFIT from this model.  I own a great PC, why do I need another whose potential I am actively prevented from maximizing?

Just my $0.02

Wow, a Microsoft tool coming to the unexpected conclusion that he can't condone anything an xbox modchip can be used for. What a shocker!

In other news, watch as Oxymandias dismisses every single criticism of Vista (prefacing some of his remarks with a disingenuous "I struggled with this one, but..."), all while pretending to NOT be a tool.

Information WANTS to be Free.

Seeing that binary data is information it should be made free at no cost.

That way THE COMMUNITY can improve the product to its utmost perfection.

We will use the product for more than 20 years, i.e. Emacs.

Linux is a superior operating system. It's so obvious!!!

Idiots.

The problem with the PC model comparison is that it's easier to modify the console to have PC functionality, than it is to modify the PC for console functionality.

I understand the company wants to make back money lost on subsidized consoles through their own official "mods", and supporters will alwayas go the offical route, but if you're basically selling a cheap PC with console capability you can't reasonably expect people to spend money on overpriced peripherals that they can do themselves.

I have a big harddrive now that I can replace my 360s with. Why should I have to buy an official one (waiting for one to be available first) when I can easily install it on my own today?  The only answer to that question is "because the company wants to make more money so wait for us to do it for you"

Am I wrong?

I think the MS should come up with a way to only let one person use the system ever. I'm thinking biometrically encoded controllers. That way if your friends want to play ever they have to by their own controller. The controller will send the info back to the xbox live network and thus enabled the xbox to be turned on. How's that for maximizing profits.

couldn't you offer some sort of support for the homebrew softwares? Like providing a service for compiling and singing OSS-software like xbmc. xbmc is my only reason to mod my xbox =)

Very interesting insight into how some folks view this product, there is a vauge and suspisiously brief reference to softmods and software exploits, but NO mention of the DVD ROM firmware hack which without doubt has screwed the claims by M$ that this was the most secure console ever created, they still maintain their security has not been breached and seem to be completely powerless to reverse this. How could an organization like M$ claim to have spent so much time on security and then go and use a third party bit of hardware which is routinely updated/re-flashed to change its operation. If piracy hurt developers so badly we wouldnt see the titles in the pipeline like halo3 which will without doubt create the biggest payday seen on a console, the publishers/developers will always make a profit because like bookmakers the odds are alwys weighted in their favour!

<i>You don’t steal a Ferrari that you’d love to drive simply because you can’t afford it, right? Same thing.</i>

You're correct that I don't steal a Ferrari, but you're grossly incorrect in stating that the theft of something material is the "same thing" as the duplication of something nonmaterial.  Software piracy does not involve stealing, at least not remotely in the sense that car theft implies.  Until a few years ago it was not even a crime.

If instead of stealing a Ferrari, I instead DUPLICATE one in my garage using my own tools and materials which I purchased myself, then does this constitute stealing?  Certainly not.  No car is stolen if I duplicate a Ferrari.

You would of course argue that I didn't steal the car itself, but that I stole the idea including the design.  But I'm not claiming that it was my own design, so I'm not stealing the idea.  And if I'm not competing with Ferrari by offering my car for sale, and if I couldn't have afforded to buy a real one, then the Ferrari company will have suffered absolutely zero loss in the marketplace due to my actions and thus the concept of a "stolen idea" remains completely and inherently immaterial.  They could try to sue me in civil court, but there would be no damages to claim!

So much for your preposterous car theft analogy...

Certainly software companies need to make their money somehow, but this concept of "intellectual property" is an artificial construct and it creates at least as many problems as it solves.  If I sing "Happy Birthday" in the privacy of my own home, would you also argue that I owe Arlo Guthrie a royalty, since he wrote the song?

Clearly even the most hardcore advocate of intellectual property legislation would need to draw the line somewhere.

The biggest problem comes from this doublespeak term, "Intellectual Property."  In reality, there is no such thing.  We all have free minds, and anybody is free to know anything.  If I can memorize a copyrighted poem, good for me.  It's a contradiction in terms, this "Intellectual Property."

"Someone earlier suggested working though Xbox Live but I dont think this is feasable because average Joe user would expect a guarantee of reliability and security that Microsoft couldnt afford to give for anything that got uploaded."

----------------------------------------

I suggested that, and I did already consider this. A way around this? At the beginning of every homebrew download taking place you put a disclaimer such as 'the software you are about to install is user created content hosted by Microsoft, and we can in no way verify it's reliability and security. By agreeing to download this, Microsoft are in no way responsible for it's usage and execution. We recommend reading all user feedback before downloading to indentify potential harmful files.', followed by a 'Yes, I agree' & 'No, I do not agree' button to start the installation process.

Furthermore, I don't think 'your average Joe user' would be bothered with this kind of stuff anyway, and especially once faced with a disclaimer like that. However everyone that is interested in homebrew would probably have done his/her research before installing potentially damaging software on their system (like they do with Xbox1 now).

sory i didnt read all the comments on the topic but i have to say the common sense celebrates in the topic of microsoft's standpoint of modding.

i took a step back after reading and realized the guy is right.

but is he ?

imagine the wolrd full of people interested in playing with xbox is that correct NO

there is a small part of the earth population europe-north america-japan-australia that can pay to play with your toy lets say 1/5.

beeing a global company with all that money got to give something back dont you ?

thats why you let us poor guys steal some of the joy you bring .

this is true

what ever locks unlocks is true because you let it happen you can make everything airtight so nobody can have a chance to play with xbox windows office and every prg that you or anyone produces out there.

this of course will add cost to your products right?

no thats an excuse because there is range of things you can do.-

the distrubution of products such as xbox windows etc has in mind to leave little holes that some times you bring out and show people how to use them to steal you just for the shake of market penetration.

so whats the case here this guy is buying an xbox only after is pirated and most probably that is simple and common sense you can a steep rise on sales after hacking Xbox.

will this bring market share up YES.

will this bring more rentals of xbox Dvd YES.

will i get black money from trhe guys        

 Glad to see you posted your opinion Andre. I'm also glad to see so many people responded to this topic. I agree with a lot of what is being said on both sides.

Backups:  It is a double-edged sword....for both sides. If you allow too much room for backups, then the kids will copy rentals or download from news groups or wherever, and not pay for games. The funny thing is that this is also a problem for the "pirates". More pirated material that is leaked into p2p networks and made widely available to the public, which has absolutely no connection with the original source, means more heat from the industry and the authorities. Then you get busts. So really, an uncontrolled method of copying and playing backups has not worked for either side, as it just continues an unproductive cycle. This is the difference in piracy now, and that of the BBS days. Anyone and their grandma can obtain a "backup" now. I really don't suggest Microsoft even look into making backups an option, there are too many people who would abuse it.  The point here is that there is a place for both sides. If there are going to be mods, then it should atleast require a few steps and a brain to acomplish.

Import Games: Again, if it means playing a backup and you want to be able to play this game so badly, figure it out. This is the kind of situation where the mod community has a use. While the publisher may have reasons for holding something back in a region, as a gamer I completely understand wanting to find a way to play it. There is no simple solution here, it is up to the publisher and the user has no control over it other than playing a backup. What should be done is making these games available over live.

Added Functionality: I personally think it would boost sales if certain things were implemented into the xbox360 that were developed by homebrew developers for the original xbox. This doesn't mean every single homebrew application should be available over live, but in an upcoming war of the consoles, I don't see why Microsoft wouldn't take into account the options that are available in programs like XBMC. Even allowing homebrew developers to submit proposals of their work, then sign and host them on their site, allowing people to burn it and install it. Just create a new team of guys to go through them and work out a way to safely enable people to use this software. Even within the emulator which runs backwards compatible xbox1 games, allow the xbmc  xbe.

Anyway, that's my opinion. I basically think that the mod community has a lot to offer and it shouldn't really be looked at as just piracy, but functionality.

microsoft told how to break in the system YES.

will people who bought the hacked xbox buy accesories YES

etc

the rest about playing import games its easier

based on my first comments and some i left unwritten you can see why?

now about playing homebrew things on my xbox .

the razor / sharp blade of the market is nothing 4 you because you sett the price if your machine will cost 100 dollars i like i will pay that if dont i wont even if it is 80

why not sell it 4 free then make us buy the games 4 100 usd per game.

imagine an exteme example the hookers market is razor blade market and a hooker is selling her body 4 free to make customers pay a lot for condom .

dont you see that if you are the best hooker in town no matter what the cost most of customers will wanna sleep with you?so , other the best in town NO!

thats why the only way to go is piracy

cause if you dont have the market penetration you will go nowhere.!!!

that stands for windows and every other    

myth they are trying to sell youb gentelman thanks 4 reading

geokiri

greece

ps.read between the lines

Ironically, in Microsoft's wholehearted attempt to stamp out all unauthorized use of their console, in the Xbox 360 it has released a console which is quite secure and foolproof against homebrew and importing, but was directly exploited for the SOLE purpose of piracy (and, of course, backup). Like many other posters, without XBMC or anything that comes close to it, I will not even CONSIDER touching an Xbox 360, or any of the games for it (which I always buy legitimately). Consider me a lost customer, then, as I use my XBox daily, but as soon as I find another solution that compares (and runs on nicer, more fully-featured hardware) I am leaving the camp and NEVER coming back.

There was one line in a comment on here talking about a EULA on the console that you have to agree to to use it, making it illegal to modify the console. How could that possibly be true? If it is, then naturally you'd just modify the system before ever turning it on, but the idea that MS would enforce a license agreement on the HARDWARE is absurd and likely impossible.

I have to echo the sentiments of many on here. I may have a modded xbox1 - but the only software that runs on it is XBMC. XBMC is friggin' sweet, and here's the thing - they petitioned MS to put XBMC on media and have it signed to run on unmodded XBoxes. But the request fell on dead ears, and so by denying that Microsoft has indirectly encouraged modding the boxes. There is nothing out on the market that matches XBMC that I have seen yet - especially for the cost. If those in the friggin industry could realize that it would be a better future for everyone. I know that I won't buy a XB360 until some type of XBMC comes out for it. As far as the licensing issues go - if MS could release a signed core software and allow users to download the codecs on their own, MS could avoid the licensing issues.

XBMC forever - End of story.

After seeing how much the oringinal xbox can be modded with xbmc I bought one,if it wasnt around I wouldnt have knowen about it and assumed it was the best knowing full well the hardware could do much more. It turns the xbox into a full media center. Nothing can compare to how much the xbox offers with xbmc just look at the original dashboard, this does have piracy implications yet if there code was signed couldnt you attach some strings like making sure games cannot be copyed before it is signed? Game developers get there code signed to run but homebrew software doesnt because you cannot be sure what they could do woth the software an example is dvd2xbox. What I feel you and others at microsoft seem to realise is currently you control the hardware which gives you an advantage untill the security is cracked allowing poeple todo what they want.

Would you suggest Microsoft simply not release Windows because poeple could install applications to copy games or movies? or make sure some form of DRM could make sure they could not run these programs?

If Microsoft wants the money for these consoles there has to be essentive for people to buy them such as homebrew or xbmc an application of this power availible on every xbox would blow Sony`s Playstation into space.

I considered both consoles before I decided on the xbox for the main reason I could get soo much more and do way more than the playstation could, Games are availible on both platforms and that only leaves its funtionality and features of the box for appeal.

I only suggest there be some soft of trial of homebrew software availible this alone is a killer app over the PlayStation,

You can trial & error a trial to see where it leads you down the path if indeed it would be a bad option or not, had Microsoft not developed Windows 95 would it be given it the power it has today from sales?

The power of Windows comes from the programs the platform supports not just things like IE or games, they can allways be developed on another platform and if its better than another who woulud win?

Most of the homebrew/pirarcy/razor debate only affects the xbox becasue you and others want it to and thats because you control the xbox, if the sdk and private key where leaked allowing others todo what they want with the hardware taking your control of the console away make the xbox more attractive to users over compeditors products?

I can only see that Microsoft should invest deep research into homebrew and other avenues, a perfect example is upgrading from Win-3.1 to WinXP (original dash to xbmc dash) as anything your compeditors cant do that you can is a clear advantage, some test apps and trial/error is the only way.

A bit of a rant about my feelings on the issue, as a after-thought just think of Windows only running games and NO 3rd party software, one solution is no control over the software and if you would buy it? I know my answer.

You said: "The desire to play import games is at least a reason I can rationally understand, but cannot condone. Sure, there are games you might want to play that are either released earlier or, quite possibly, not released at all in your region. But sometimes companies have good reasons to either not release a title into a region or release it at different dates. It may be because of the time and cost of localization, marketing plans, ad buys, cultural considerations, or perhaps even because of the impact of piracy in the region. Whatever the case, it’s safe to assume the publisher has thought about it. The good news is that most publishers are developing with multiple platforms, regions, and languages in mind up front, so this is becoming less and less of an argument. (After all, it’s in the publisher’s best interest to sell as many copies as possible, right?)"

Why should I not be allowed to import a game if it's never going to be released in my region anyway? In what way is "the publisher has thought about it" and argument to persuade me not to mod my machine so I can play games on time. I'm in Europe and we still don't have Dead Rising here yet, why should I bother waiting if I can get the game elsewhere. I will continue to mod my consoles in any way I see fit until you start making machines region free. Buying import games can't be that big of a deal to M$ anyway considering there are many 360 games which are region free!

Ozymandias answers a readers question about Modchips . In his article, he talks about what the chips

Ozymandias answers a readers question about Modchips . In his article, he talks about what the chips