What if Gaming Went to a Hosted, Subscription Model?

July 22nd, 2008 | by Rob Enderle

I can probably cover the problems with one long sentence. Each console has unique advantages and disadvantages but no one game plays on all of them (and you often have to buy different versions of the game for each anyway). While PC Games have to deal with a missive diversity of hardware and operating systems with the result being that they typically aren’t as reliable as they need to be and fall well short of cutting edged performance.

This increases substantially the cost of developing a new game and reduces the value of that game to us because if we don’t have the right platform we won’t buy it, and if it sucks on the platform we have we’ll likely not buy another.

Ideally the game developers would like a market where everyone had access to the same hardware and the buyer would like a market where they don’t have to spend hundreds on new hardware just to play one game.

What if you hosted the entire game experience and provided it as a service? 

 

The Concept of PC Blades or NComputing

HP and Clear Cube sell a corporate solution which allows a PC to be centrally located, placed on a high density rack with each PC on a single card and either shared or dedicated to each user dynamically with up to workstation levels of performance. NComputing does something similar but with a single PC shared to a bunch of users and the concept could be provided as a service (but currently isn’t).

Now what if you did the same thing for Xbox, PS3, and Nintendo with a universal client in the home that would accept peripherals from all three devices? You could probably build it into a box and the bandwidth required easily fits within the concept of Visual Computing that Cisco has been aggressively selling into the market. 

In fact they just started selling an impressive dual channel wireless router, the WRT610N which has two wireless networks built in - one for data and one for multimedia that would fit this use model particularly well.

The resulting service would charge you a monthly fee to access a variety of gaming and possibly personal computing resources that would change or scale to your need (from low end graphics for solitaire to a multi-card crossfire or SLI configuration if you wanted to play something like Crisis). The final benefit is it would never become obsolete as the service would update the hardware to ensure its clients would remain current.

And, if you wanted to try a Mac, you’d just accept the Mac option much like you would subscribe to Showtime on Cable.

Charges would be similar to cable where more capability and game selection running on higher end hardware for more time would be premium priced over someone who just wanted to run console games. 

 

Benefits to Developers

The big one is they could always focus on near leading edge hardware and pick the console based on how well their game would play on it rather than constantly trying to find the lowest common denominator or the best balance between market penetration for a console and game performance. More people could easily try vastly more games and they would be focused like a laser on creating titles that drove ever higher sustained traffic. This not only leads to happier customers but happier and richer game developers. Pirating pretty much goes away because: One, what is the point if you are subscribing anyway, and two how are you going to load the game? 

 

Alternative: PC Virtual Machines

Another way to do this would be with a virtual machine (VM) model where you had a light version of Windows designed to just run games in one virtual machine and console emulators in others with adopters for all of the controllers. The issue here is you’d need one heck of a cutting edge system to have the performance you’d need though you still could use the NComputing model to share that one super powered machine with everyone in the house (though the sharing model would get ugly if one person was using all of the performance for gaming).

So, while this would be a great way to drive the sale of high end gaming rigs, too few people can afford them so I doubt it would scale to meaningful numbers. But it is interesting to think about. 

 

Moving Towards the Cloud Anyway

I expect, given current trends, that by 2020 we’ll likely be living in a model like this anyway because that is where cloud computing is headed and the current complex client-oriented world is simply too complex and inefficient to survive much longer than a decade without significant changes.

Of all the players, only Microsoft is doing a blend of PC and Console and providing a substantial library of downloadable games and multimedia content. Still they are a long way from hosting the console- but just think how huge a change like that would be in this market?

I’ll continue to think we are at the beginning of a massive change. The consumer market feels ready for a major change and I think this may be one of the changes that could be born out of the current adversity. What do you think?


Post Your Comment...Comments

Ian Bell on Jul 22nd, 2008 at 1:45 PM:

I think this is terrible idea. I hate the idea of being forced to subscribe to content without actually owning a physical copy.

And to be fair, you would likely see the cable operators like Verizon and Comcast getting in on this versus having a seperate box from the likes of Nintendo or Microsoft.

Bandwidth and a net connection would be the limiting factor here as a lot of people would like to have their consoles independant of the net.

If you have ever used a Cytrix client, operation is extremely slow on the workstation in most instances. You would want the hardware to be powerful and local - not remote.

andersongaming on Jul 22nd, 2008 at 6:00 PM:

That would mean I can't build my own gaming rigs anymore. No thank-you!!

Chad on Jul 22nd, 2008 at 6:49 PM:

Sorry, but this fits into the category of "fixes for things not broken." Companies may well adopt this but it's bad for gaming, bad for the industry, and bad for the consumer.

What this faux-trend (if it's not just some fantasy of the author) shows is 1) game-makers not being game-players and 2) no respect for the consumer.

Andre on Jul 22nd, 2008 at 7:35 PM:

You two are absolutely correct as a gamer, I would never be satisfied with the above offer. I like to own that copy of the game. Not only that what if I do not have an internet provider, what am I suppose to do then.

I feel that this is one of the worst ideals that could come out of the pipe. I will tell you this if the industry went in this direction I would be the first one to protest.

Penny on Jul 22nd, 2008 at 7:44 PM:

Lag even with single player. Yuck.

Brian on Jul 22nd, 2008 at 7:47 PM:

If a publisher could guarantee that their PC game will be run on essentially the same hardware through their entire install base, imagine how much money they would save on support costs, development costs, and distribution costs.

Companies are continuing to look at ways to thwart piracy and this model would essentially guarantee specific user access, unlike the rampant piracy we see today.

While performance in business based applications like Citrix aren't feasible for gaming, keep in mine that 1.) The application was not built for multimedia in mind and 2.) The general population in North America has appalling internet connections â– both up and down â– compared to what is being deployed in Korea and Japan.

Imagine what could be with 20+mbps up/down.

It'll happen people. Give it time.. It will happen.

Penny on Jul 23rd, 2008 at 4:51 AM:

And then we get nickeled and dimed for every little thing, save slots, which won't be possible on host machines, total bandwith, number of games accessible per month "through the plan that's right for you" because "we care" ...

As far as harmonizing technology, increasing dominance of consoles would do that, if it ever happens. The industry also could make pc hardware a known quantity, or at least reduce driver variables etc., by working toward some kind of "gaming machine certification" system among pc and video card makers and game companies, which wouldn't have the drawback of hosting everything ... maybe it's time the ESA got useful again.

Penny on Jul 23rd, 2008 at 4:52 AM:

That is the drawbacks as far as consumers are concerned ...

Dan on Jul 23rd, 2008 at 8:14 AM:

I think the only thing this article proves is that you are not a gamer, Mr. Enderle. No offense, but you seem to lack a basic understanding of gamers as a culture.

From a business software perspective, I could see this working. Businesses are usually concerned with cost efficiency and technology is a big part of an operating budget.

But gamers are not businesses - by and large they're just people who enjoy a hobby, albeit a hobby that happens to be the most profitable form of entertainment at the moment. And this is why your "solution" just isn't feasible. For example, gamers who want to play high-end PC games are, for the most part, also hobbyists who enjoy building their own machines and squeezing every last bit of performance out of them.

For those who just want great visuals but don't want the entry cost (both financial and in terms of time invested) of a high end PC, just go with a console. Sure, they probably have to choose one console, or maybe two if they're lucky, out of the three, but that's a choice most are willing to make. Plus, its a one-time investment for the hardware. What are the chances that, over the span of two to three years, your solution would cost them less in monthly fees than, say, the cost of one piece of hardware? Not likely.

Besides, why would say, Nintendo ever license their content to your service? They make money off every hardware purchase. There's no reason for them to invest in something like that. For that matter, why would Microsoft or Sony? They have a vested interest in selling you hardware. Its called Xbox Live and PSN.

Its a nice idea, in theory. And it *would* be great for gamers. It just wouldn't have the support of the key players. Besides, if I want a large library of games that doesn't depend on my hardware, I subscribe to GameTap (which I do).

Ian Bell on Jul 23rd, 2008 at 8:46 AM:

@Dan above:

Most game companies DO not make money on the console hardware, they make it off the game royalties. Even game accessories such as game controllers etc have little if no margin on them.


What Rob is describing above could actually happen and that's the point. Everything is going to a subscription model (if you are a Gamefly, or Gametap user, you already know this). MS Office is available in subscription-based format, movies are (ala video on demand/Netflix etc) and so is music (iTunes, Napster etc), so it only makes sense that games will.

I think it's B.S. as well - for the record. But I still think companies will push for this.

Rob Enderle on Jul 23rd, 2008 at 9:51 AM:

A couple things to look at:

http://www.latimes.com/entertainment/news/la-et-sc...

This will be the first big test of a centralized gaming model. By placing the gaming engine in the cloud they expect to be able to address the latency problem with MMOs. Intel has been pushing this concept for about a year now.

Also:

http://www.microsoft.com/presspass/press/2008/jul0...

This is Microsoft moving, more slowly, in the same direction.

Dan on Jul 23rd, 2008 at 11:31 AM:

@Ian:

True, most do NOT make money off hardware. Nintendo does, even with their console at the lowest price point of the big three. Nonetheless, MS and Sony are just as invested in selling their hardware - because of the exclusive services they offer their users. They don't make money off the hardware, but they make money by having large numbers of users who have access to their "entertainment portals". Why license away exclusive access to users? And for those gamers who own multiple consoles, they've already proven that they will shell out big bucks for access to multiple service providers (MS, Sony, Nintendo) by the fact that they bought multiple consoles. They wouldn't be interested in Mr. Enderle's "servioe".

As for Gamefly and GameTap - sure, they're subscription models. They've already got some of my money! There's a key difference, and I think that's what I was trying to point out - they license software only. Not the hardware, and that's my point - hardcore gamers who will pay for subscription services are either PC gamers who WANT to own their hardware, or console owners who have proven they are willing to make a choice between platforms.

Sure, someone somewhere is going to try to market this approach and sell it. But without the support of the big three, they won't get very far. How can you market a "universal" gaming service that is independent of hardware, when Nintendo won't license you any of their first-party titles? Or Microsoft won't give you the rights to any of their Xbox 360 exclusives? What do you have to sell your subscribers at that point?

@Rob: sorry, your URLs are only partial. I'd love the check them out!

Ian Bell on Jul 23rd, 2008 at 5:44 PM:

@Dan

Totally understand your point, and I agree that without support from the big three, it is likely not to happen.

But...if the model starts to work in other areas like PC software, movies, music etc I would at least expect the gaming industry to follow suit. Some of the casual games out there are already like that. And to be honest, there are millions of gamers paying a subscription fee to Microsoft's Xbox Live already...only they pay monthly and get very little content for free. Microsoft is already dabbing a little in this "virtual cloud"/subscription model right? MMO's like WOW already are as well.

Why not license the gaming hardware for a cheap monthly fee as well? We already pay that way for our cable TV boxes etc right?

I think it totally sucks, and it's a fleecing of the consumer. Would love to see things not going in this direction. I just think it's too late.

Khanzza on Jul 24th, 2008 at 3:01 AM:

Lock down your customers and then nickle and dime them till death? Sounds very much like something a business would be interested in. But it only works if you can trick the sheep into buying it, and there is the problem with the concept. For most part those who would buy into this kind of service aren't that interested in gaming more than it's a complement to the various cable packages they are subscribing to.

For me, it would mean quitting gaming, but then the industry is already doing its hardest to make it so.

There is another solution though. The industry could stop trying to screw the customers by making crappy games and hyping shovelware. Not that I will expect to see any major publishers thinking about such a "strange" strategy.

Well, well.. you can always blame piracy, most crappy developers do.

Dan on Jul 24th, 2008 at 7:50 AM:

@Ian:

Yes, it would be a fleecing of the consumer, if it were to happen. And I agree that someone, somewhere, will try it. I just don't think, and I very much hope, it won't get off the ground simply from the nature of competition between the big three. Why would they participate in a system that gloms them together with their direct competitors? If you don't have the 360 and PS3 and Wii games in your service, what do you have? You have GameTap. Sure, you might be able to con someone into paying a monthly fee to lease hardware - but if you can't get the console jockeys to do it from a lack of participation by the publishers, you've seriously crippled your potential audience.

And I know that Xbox LIVE and MMOs like WoW seem to point to the subscription model. But the key difference is in what they are selling - LIVE and MMOs are a service that is hardware based. They are, to a point, platform agnostic (LIVE is both PC and Xbox, I know its not independent of a specific platform, but it doesn't fully rely on one specific piece of hardware). WoW is a service, nothing more. It runs on multiple platforms and has a (relatively) low cost of entry from the hardware side. Selling only PC gamers (we've eliminated the consoles above) a service that takes away their PCs...I just don't see it.

@Khanzza:

I completely agree that MS or Sony, or even Nintendo, would love to lock in their customers and drain them for gobs of cash. That's what they do now! The current model for gaming locks players into a console choice, and the biggest fights are over exclusivity and market penetration and units sold. Amen.

However, Mr. Enderle's service, as you state, is flawed. Not one of the big three are going to opt into a system that makes them cooperate with each other. You're right - consumer buy-in would be tough for a hardware-based service. But even more - why would MS or Sony bother trying to sell a universal service to their customers? They've already convinced us to buy into the current model of exclusivity. Why do a 180 now?

Dan on Jul 24th, 2008 at 7:52 AM:

Darn, can't edit posts...2nd paragraph: LIVE and MMOs are a service that is NOT hardware based...

It just doesn't make sense otherwise :)

Ian Bell on Jul 24th, 2008 at 8:38 AM:

@ Dan:

Thats why I said: "Why not license the gaming hardware for a cheap monthly fee as well? We already pay that way for our cable TV boxes etc right?"

I didn't say MMO's and LIVE are a service that is hardware based. But it's a step towards it. :)

Jason Howard on Jul 24th, 2008 at 8:50 AM:

Hey, it happens in hotels. You can play lame games on the TV for a fee.

Al on Jul 31st, 2008 at 7:38 PM:

Acctually this has already been tried and failed miserably by Sega they had a subscription service with cable modems and your cable co. You could logon and play like 100 different games for $10bucks a month.

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