Sure, raising the price of your online service by 20 percent seemingly out of nowhere could be classified as anything but consistent, but Xbox Live marketing senior director Craig Davison says it isn't like that. During an interview with Gamasutra, Davison recounts how the service has grown in its near six years of existence and how the "infrastructure costs" have gone up.
"As you can imagine, the costs associated with maintaining a service at that level and making sure all of those features are consistent, we're hitting that quality bar, we're adding the customer service infrastructure necessary, we're accommodating all of the same social features and functionality too, there's a cost. Infrastructure costs, of course." Davison added that the consistency across all "entertainment applications," whether it be games or things like Netflix and Zune -- which Davison reveals usage has doubled among Xbox Live users over the last year -- is a big part of it.
Davison doesn't only address the Xbox Live price increase in the Gama interview, but also addresses this week's launch of Kinect and the Xbox 360's rise as an overall entertainment solution outside of games. Hit the link below to read more.
Reader Comments (124)
Posted: Nov 2nd 2010 8:03PM KinseySS said
Is it just me or did he pull that answer out of his ass, cause the same arguement can be made for PSN yet its still free.
Posted: Nov 2nd 2010 8:28PM AltairArcanum said
@KinseySS
Exactly. I know it'll sound crazy, but I was actually expecting the price to drop to stay in competition with PSN.
Reply
Exactly. I know it'll sound crazy, but I was actually expecting the price to drop to stay in competition with PSN.
Posted: Nov 2nd 2010 8:56PM Spunky Monkey 190906 said
@Raffi256
Haha, that made me lol, it's almost as if Sony is impulsing us to subscribe.
Please get PSN+, see these developers and games were mistreated and abandoned, they can't be rehomed, so your £2 a week will help to ensure they get the same love, care an attention that your normal retail games get.
Reply
Haha, that made me lol, it's almost as if Sony is impulsing us to subscribe.
Please get PSN+, see these developers and games were mistreated and abandoned, they can't be rehomed, so your £2 a week will help to ensure they get the same love, care an attention that your normal retail games get.
Posted: Nov 2nd 2010 9:04PM Chris DPSN AggieCEO XBLThe Aggi said
@Evin dashboard updates? you you are saying that silver people are stuck on the blades from 2006? thats gotta sucks....
Reply
Posted: Nov 2nd 2010 9:17PM Spunky Monkey 190906 said
@Evin
Yeah, exactly, they are a multibillion dollar making business, I hardly doubt they will go bust any time soon just because 360 owners prefer Live cheaper and less of the extra crap they keep shoveling out, like Facebook and ESPN
Reply
Yeah, exactly, they are a multibillion dollar making business, I hardly doubt they will go bust any time soon just because 360 owners prefer Live cheaper and less of the extra crap they keep shoveling out, like Facebook and ESPN
Posted: Nov 2nd 2010 9:28PM Weiji said
@Evin Live offers more? Really? Have you even used PSN/PSN+ or are you just going by what you've heard?
Paying MS $50 a year lets them use you as a P2P server for gaming.
Paying Sony $50 gets you free games, discount on other games and P2P connectivity is free for everyone.
As far as I'm concerned, the only major service MS provides that Sony doesn't as of yet is cross game voice.
Reply
Paying MS $50 a year lets them use you as a P2P server for gaming.
Paying Sony $50 gets you free games, discount on other games and P2P connectivity is free for everyone.
As far as I'm concerned, the only major service MS provides that Sony doesn't as of yet is cross game voice.
Posted: Nov 2nd 2010 9:51PM KIDCHAINSAW said
@Chris DPSN AggieCEO XBLThe Aggi
Unfortunately, us Silver Account users are forced to use that shitty NXE dashboard as well.
Reply
Unfortunately, us Silver Account users are forced to use that shitty NXE dashboard as well.
Posted: Nov 3rd 2010 1:41AM ShadowXIII said
@KinseySS
Ass answer indeed. This is just a longer way of saying, "We want more money."
I don't even have my 360 hooked up anymore.
Reply
Ass answer indeed. This is just a longer way of saying, "We want more money."
I don't even have my 360 hooked up anymore.
Posted: Nov 3rd 2010 2:50PM Deathmore said
@KinseySS
Definitely out of his ass.
1. What new features cost money?
In UK there's Sky Player, Facebook and Twitter. All that is free anyway, on a normal computer so I don't see a price hike for those features. Also it being only open to Gold is bullS.
2. Our equivalent to Netflix is LoveFilm and they have denied to put their video streaming service on Xbox Live for the fact that Microsoft are only going to offer the service to Gold Members. Thus why it's only coming to PS3 and wii.
3. There's Zune marketplace, but I remember that being there since the old blades dashboard. So I don't see a reason in price hike.
You know what, if Microsoft came straight out and said that, they need extra so that they can buy more servers and storage space for Xbox Live. I'm cool with that, but just making this BS up is not right. I know that it's mainly due to the increase in people on Live.
Despite PSN being free anyway, I guess how much does like £1 extra a month hurt. I mean £3.57 is minimum wage at my age, £5.70 is minimum wage for adults. No point in Boycotting or complaining, the truth is we've paid it before, and what's a little extra to a company providing no actually proper reason to increase price.
Reply
Definitely out of his ass.
1. What new features cost money?
In UK there's Sky Player, Facebook and Twitter. All that is free anyway, on a normal computer so I don't see a price hike for those features. Also it being only open to Gold is bullS.
2. Our equivalent to Netflix is LoveFilm and they have denied to put their video streaming service on Xbox Live for the fact that Microsoft are only going to offer the service to Gold Members. Thus why it's only coming to PS3 and wii.
3. There's Zune marketplace, but I remember that being there since the old blades dashboard. So I don't see a reason in price hike.
You know what, if Microsoft came straight out and said that, they need extra so that they can buy more servers and storage space for Xbox Live. I'm cool with that, but just making this BS up is not right. I know that it's mainly due to the increase in people on Live.
Despite PSN being free anyway, I guess how much does like £1 extra a month hurt. I mean £3.57 is minimum wage at my age, £5.70 is minimum wage for adults. No point in Boycotting or complaining, the truth is we've paid it before, and what's a little extra to a company providing no actually proper reason to increase price.
Posted: Nov 3rd 2010 3:55PM jtsuth said
@Weiji
I have both and agree that PS+ is a good value but I don't think it is a better value than XBL. I don't have to worry about trying to find friends and get them into a game on my xbox. I can't chat seamlessly without a huge headache and finding my buddies on different games is a real pain in the ass on PS3. For the seamless ability to find my friends and keep track of them, I find XBL a pretty good value. What I don't find a good value is them raising the price to give us a bunch of shit that core gamers don't give two poops about such as facebook, twatter, fm and whatever else I am forgetting because I don't use it. I was fine paying $50. $60 is kinda bullshit but the fact remains that it is a hell of a lot easier to use XBL than it is to use PS3 online if you have friends and therefore makes it a better value (to me) over the free but frustrating online system that Sony uses.
/rant
Reply
I have both and agree that PS+ is a good value but I don't think it is a better value than XBL. I don't have to worry about trying to find friends and get them into a game on my xbox. I can't chat seamlessly without a huge headache and finding my buddies on different games is a real pain in the ass on PS3. For the seamless ability to find my friends and keep track of them, I find XBL a pretty good value. What I don't find a good value is them raising the price to give us a bunch of shit that core gamers don't give two poops about such as facebook, twatter, fm and whatever else I am forgetting because I don't use it. I was fine paying $50. $60 is kinda bullshit but the fact remains that it is a hell of a lot easier to use XBL than it is to use PS3 online if you have friends and therefore makes it a better value (to me) over the free but frustrating online system that Sony uses.
/rant
Posted: Nov 2nd 2010 8:06PM Halwende said
I can imagine operational costs would increase when the subscriber base starts off around 400,000 but is 25,000,000 today
Posted: Nov 2nd 2010 8:37PM ComicShaman said
@Halwende
And their revenues are 62 times greater as well. A normal model of economics of scale would predict that their costs per user go down as the subscriber base grows, not up. Perhaps something different is at play here, but I doubt it. Sounds more to me like they think the market will bear more, and so they're trying to make XLive even more profitable.
Reply
And their revenues are 62 times greater as well. A normal model of economics of scale would predict that their costs per user go down as the subscriber base grows, not up. Perhaps something different is at play here, but I doubt it. Sounds more to me like they think the market will bear more, and so they're trying to make XLive even more profitable.
Posted: Nov 2nd 2010 9:18PM MonKENy said
@ComicShaman
thats exactly what I was thinking. You dont start a service for X amount of money and than add things that YOU want consumers to have and than charge MORE for that service. Usually you say hey we want to add (insert service here) if you want it than its (insert cost here) OR you say Hey we are improving our service here ya go
I run a restaurant, If I RAISED prices on everything then I would prob lose business. I can Charge more for specific NEW items, but I cant raise all item prices to cover for a new item. that would be stupid
Reply
thats exactly what I was thinking. You dont start a service for X amount of money and than add things that YOU want consumers to have and than charge MORE for that service. Usually you say hey we want to add (insert service here) if you want it than its (insert cost here) OR you say Hey we are improving our service here ya go
I run a restaurant, If I RAISED prices on everything then I would prob lose business. I can Charge more for specific NEW items, but I cant raise all item prices to cover for a new item. that would be stupid
Posted: Nov 3rd 2010 9:46AM ToTheMoon said
@ComicShaman
You are 100% correct.
If what Craig Davidson says is true, then I would be very worried about the viability of Microsoft as a company because they are unable to do proper forecasting. I mean, did they not crunch any numbers of do any kind of predictions for this when they started XBL?
I called bullshit on Craig Davidson for being a total mouthpiece. It would have been better if he kept his mouth shut.
Reply
You are 100% correct.
If what Craig Davidson says is true, then I would be very worried about the viability of Microsoft as a company because they are unable to do proper forecasting. I mean, did they not crunch any numbers of do any kind of predictions for this when they started XBL?
I called bullshit on Craig Davidson for being a total mouthpiece. It would have been better if he kept his mouth shut.
Posted: Nov 2nd 2010 8:08PM MystileArmor said
For the amount of stuff I get on Xbox Live nowadays compared to before, I'm ok with this. Not to mention, from my personal experience, the service has been more stable and reliable as well.
A 10 dollar increase over the span of a year.. I can deal with that.
A 10 dollar increase over the span of a year.. I can deal with that.
Posted: Nov 2nd 2010 8:22PM MystileArmor said
@Danthaman
I do the same, but that's besides the point really. Even if bought at full price, it really isn't too bad.
Reply
I do the same, but that's besides the point really. Even if bought at full price, it really isn't too bad.
Posted: Nov 2nd 2010 8:26PM Chris DPSN AggieCEO XBLThe Aggi said
@MystileArmor so because you paid $50/yr for JUST matchmaking and party chat....you feel like ESPN 3 is worth a $10 increase?
Reply
Posted: Nov 2nd 2010 8:32PM MystileArmor said
@Chris DPSN AggieCEO XBLThe Aggi
0.02 Dollars a day extra on top of what I already paid... and it gives me a nice interface to watch Netflix on with friends, ESPN, Last.fm on my tv, Facebook and I get to play games with my friends and talk to them while doing all these things. I'm really not too upset with the increase. It's whatever.
Reply
0.02 Dollars a day extra on top of what I already paid... and it gives me a nice interface to watch Netflix on with friends, ESPN, Last.fm on my tv, Facebook and I get to play games with my friends and talk to them while doing all these things. I'm really not too upset with the increase. It's whatever.
Posted: Nov 2nd 2010 8:41PM Chris DPSN AggieCEO XBLThe Aggi said
@MystileArmor Netflix with friends is a big deal? I mean I have never seen the point of it....facebook is free, shouldnt be restricted to Gold...neither should last fm or netflix....I mean all of these come on TVs now...and you dont even have to get an expensive tv to get them.....nor do you have to pay a yearly fee....and ESPN 3 isn't even accessible to a lot of people as of now.....
Reply
Posted: Nov 2nd 2010 9:13PM MystileArmor said
@Chris DPSN AggieCEO XBLThe Aggi
All I'm saying is that I think it's not that big of a deal.
As in: That's my opinion.
Reply
All I'm saying is that I think it's not that big of a deal.
As in: That's my opinion.
Posted: Nov 2nd 2010 9:25PM Chris DPSN AggieCEO XBLThe Aggi said
@MystileArmor all I'm saying it that its ridiculous.....we all said $3 fo ra gallon a gas wasn't a big deal....then it hit $5....people stopped going places....bought less gas....the price dropped.....
all I'm saying is if 60-70% of Live Gold member didn't pay for a few months ,they would drop the price....
I would love to get tiered options...all I want is to pay online...the rest of those "features" are useless to me...and I'm not the only one.....I will never use twitter, ;last.fm, or facebook again....its like having HBO with all 15 of the HBO channels and only using one of them...the rest are useless waste....
Reply
all I'm saying is if 60-70% of Live Gold member didn't pay for a few months ,they would drop the price....
I would love to get tiered options...all I want is to pay online...the rest of those "features" are useless to me...and I'm not the only one.....I will never use twitter, ;last.fm, or facebook again....its like having HBO with all 15 of the HBO channels and only using one of them...the rest are useless waste....
Posted: Nov 2nd 2010 9:57PM philmcfail said
@ravissimo
Thank you! People don't get that even the discounted prices, even at places such as Amazon, went UP with the price hike.
Reply
Thank you! People don't get that even the discounted prices, even at places such as Amazon, went UP with the price hike.
Posted: Nov 2nd 2010 10:03PM philmcfail said
@Roxas560
Why do people downplay the pricing like that? Of course it going to look cheaper, if you go by day. Cars look cheaper by dividing it monthly, but your still (probably) going to pay a notable sum in the end.
Reply
Why do people downplay the pricing like that? Of course it going to look cheaper, if you go by day. Cars look cheaper by dividing it monthly, but your still (probably) going to pay a notable sum in the end.
Posted: Nov 3rd 2010 5:25PM KentBrockman said
@philmcfail Agreed, that is such a weak justification. What if, for example, Joystiq started charging $50/year to access it? It's only $0.14/day people! If you can't afford $0.14/day, you shouldn't be playing games! And look how much "entertainment" you get from it! $4.16/month, that's one less happy meal per month! (and so many other similar lame arguments)
Anyways, that's it for me and XBL. I tried it out for a year and really don't see anything worth paying money for. Apart from cross-game voice chat, I can do everything else for free on the PS3 or my laptop/phone.
It's bad enough to have to pay a subscription fee just to be able to use all the functionality in the games you already paid for, but now they are increasing the price with very few useful improvements to the service since the system launched. I consider things that can be used freely elsewhere (facebook, netflix) to be of little value. I also now pick up multiplayer games only on PS3 because I don't want to have to be tied to paying a subscription if I want to play a game online.
Reply
Anyways, that's it for me and XBL. I tried it out for a year and really don't see anything worth paying money for. Apart from cross-game voice chat, I can do everything else for free on the PS3 or my laptop/phone.
It's bad enough to have to pay a subscription fee just to be able to use all the functionality in the games you already paid for, but now they are increasing the price with very few useful improvements to the service since the system launched. I consider things that can be used freely elsewhere (facebook, netflix) to be of little value. I also now pick up multiplayer games only on PS3 because I don't want to have to be tied to paying a subscription if I want to play a game online.
Posted: Nov 5th 2010 11:34AM Fermie Prime said
@MystileArmor
You see dude, no matter how polite and respectful your opinion is, if its considered "unpopular" by the masses on Joystiq, it will be downvoted. Ridiculous huh? Now, people will downvote me for say that. By the way, I'm with you 100%.
Reply
You see dude, no matter how polite and respectful your opinion is, if its considered "unpopular" by the masses on Joystiq, it will be downvoted. Ridiculous huh? Now, people will downvote me for say that. By the way, I'm with you 100%.
Posted: Nov 17th 2010 2:48AM poohbear82 said
@Danthaman where do you but the cards at what site.
Reply
Posted: Nov 2nd 2010 8:09PM Prboi said
I can see the fanboys already commenting, so let me save them the trouble.
"Consistency at sucking! PS3 FTW!!!"
-_-
"Consistency at sucking! PS3 FTW!!!"
-_-
Posted: Nov 2nd 2010 8:10PM thecotanak said
I hate paying the same price for just using multiplayer gaming, achievements and marketplace. I don't want espn, lastfm, zune, facebook,twitter,netflix, etc.. I just want to play game!
Posted: Nov 2nd 2010 8:32PM Prboi said
@thecotanak
Well there's people out there who do & just because you want something doesn't mean everyone feels that way. People don't like paying 60 bucks a year yet they spend more than that on other things like dinner & movies & things like that. If you don't want to pay that much, then don't pay. Playing video games isn't a priority in your life therfore if you can't afford it, don't pay for it
Reply
Well there's people out there who do & just because you want something doesn't mean everyone feels that way. People don't like paying 60 bucks a year yet they spend more than that on other things like dinner & movies & things like that. If you don't want to pay that much, then don't pay. Playing video games isn't a priority in your life therfore if you can't afford it, don't pay for it
Posted: Nov 2nd 2010 8:41PM IwillKILLurGOD said
@thecotanak This. Wish they would have some sort of tiered price structure. For those that want everything, pay $60, then go down in applications and price from there.
Reply
Posted: Nov 2nd 2010 10:05PM chimpsmith said
@Prboi "Playing video games isn't a priority in your life therfore if you can't afford it, don't pay for it "
And that's why we have good old competition. For the same price you can get a PS3 that you never pay for internet on. It gives people the exact features that thecotanak was hoping for. Except, there's one problem. You can't just switch over. And this is why so many people have a problem with it.
It's like if you had to buy a tv from comcast that only worked with comcast cable. Now I have comcast, and they've worked great for me, but if they hiked their price up I would get pissed. I would want to go to another company. But If I was forced to purchase equipment like a tv that would only ever work with them, and that I would lose much of the functionality of it and other products that I had bought then it would just suck. I would have to make another major investment to save money.
Live cost enough to where when I got my PS3 I just didn't care to pay. I didn't need any of the extra features, and let's be honest, no one really cares about ESPN or facebook. Sure, it's neat to have some of thsoe features, but even the PS3 stuff like home, that thing that you can do research for Stanford with - they're all just gimmicky things. It's like tv's that use facebook. I'm never going to pay extra to have facebook on my tv, because I know that I'll never use it
No one likes to pay more, and because we're in hard economic times, it can be hard to get alternatives. Now it's either pay a higher price or lose major functionality of games. But, don't worry, MS has got your back, because now you get some stuff that no one cares about.
Reply
And that's why we have good old competition. For the same price you can get a PS3 that you never pay for internet on. It gives people the exact features that thecotanak was hoping for. Except, there's one problem. You can't just switch over. And this is why so many people have a problem with it.
It's like if you had to buy a tv from comcast that only worked with comcast cable. Now I have comcast, and they've worked great for me, but if they hiked their price up I would get pissed. I would want to go to another company. But If I was forced to purchase equipment like a tv that would only ever work with them, and that I would lose much of the functionality of it and other products that I had bought then it would just suck. I would have to make another major investment to save money.
Live cost enough to where when I got my PS3 I just didn't care to pay. I didn't need any of the extra features, and let's be honest, no one really cares about ESPN or facebook. Sure, it's neat to have some of thsoe features, but even the PS3 stuff like home, that thing that you can do research for Stanford with - they're all just gimmicky things. It's like tv's that use facebook. I'm never going to pay extra to have facebook on my tv, because I know that I'll never use it
No one likes to pay more, and because we're in hard economic times, it can be hard to get alternatives. Now it's either pay a higher price or lose major functionality of games. But, don't worry, MS has got your back, because now you get some stuff that no one cares about.
Posted: Nov 2nd 2010 10:49PM Prboi said
@chimpsmith
Like I said, no one is forcing you to pay that fee. & plus, despite the price hike, MS still offered deals to where you could get it for less. & even if that, Amazon sells 12 month cards for 30 - 34 bucks & they have been for years now. If you really want to play online for free without any of the features, then boycott Xbox Live for about 3 - 4 years then get a PS3. Times are rough & I know a price like 60 dollars a year is a lot but compared to what other people pay for, I think that's a fair deal. Wow & other MMO players pay upwards of 15 bucks a month. That's 180 bucks a year. What about people who watch PPVs. They pay about 40 bucks a pop. Like I said before, it's all about priorities. People are complaining that it's too much of a price, but a year is a very long time. Think of it as buying a game every year. If you really want to play online then just keep paying for it, if you don't, save up for a PS3.
Reply
Like I said, no one is forcing you to pay that fee. & plus, despite the price hike, MS still offered deals to where you could get it for less. & even if that, Amazon sells 12 month cards for 30 - 34 bucks & they have been for years now. If you really want to play online for free without any of the features, then boycott Xbox Live for about 3 - 4 years then get a PS3. Times are rough & I know a price like 60 dollars a year is a lot but compared to what other people pay for, I think that's a fair deal. Wow & other MMO players pay upwards of 15 bucks a month. That's 180 bucks a year. What about people who watch PPVs. They pay about 40 bucks a pop. Like I said before, it's all about priorities. People are complaining that it's too much of a price, but a year is a very long time. Think of it as buying a game every year. If you really want to play online then just keep paying for it, if you don't, save up for a PS3.
Posted: Nov 2nd 2010 11:00PM MrDestructoid said
@thecotanak
Lie, you can still get achievements.
Reply
Lie, you can still get achievements.
Posted: Nov 2nd 2010 11:18PM Liquidfingers said
@chimpsmith
here you go again. why oh why must you turn everything into a "hate 360" thread? sheesh...
i'll tell you one thing that live still gives you that psn doesn't, and that's cross-game chat. since i have friends in other states that i converse (and kill zombies) with quite frequently, that alone is worth the price of xbox live to me. now i can talk to all my buds without having to rack up a phone bill. total + in my book.
it may seem like a relatively trite feature to a lot of people out there, but to others like myself, cross game chat is an awesome part of live. i don't have to listen to all the 14 year olds that play call of duty and halo, and i get to talk to my friends all at once. also, it makes coordinating as a team a total possibility, which is hard with a console that does not give everyone mics (or party chat for that matter).
we get it chimp, you like the ps3, good for you. embrace it, enjoy those exclusives. but just realize that there are millions of people who like the 360 and not all of them are rambling tween fanboys.
nuff said.
Reply
here you go again. why oh why must you turn everything into a "hate 360" thread? sheesh...
i'll tell you one thing that live still gives you that psn doesn't, and that's cross-game chat. since i have friends in other states that i converse (and kill zombies) with quite frequently, that alone is worth the price of xbox live to me. now i can talk to all my buds without having to rack up a phone bill. total + in my book.
it may seem like a relatively trite feature to a lot of people out there, but to others like myself, cross game chat is an awesome part of live. i don't have to listen to all the 14 year olds that play call of duty and halo, and i get to talk to my friends all at once. also, it makes coordinating as a team a total possibility, which is hard with a console that does not give everyone mics (or party chat for that matter).
we get it chimp, you like the ps3, good for you. embrace it, enjoy those exclusives. but just realize that there are millions of people who like the 360 and not all of them are rambling tween fanboys.
nuff said.
Posted: Nov 2nd 2010 11:20PM Liquidfingers said
@Liquidfingers
also, not to over-dramatize this or anything, but if $60 a year is a big deal to ANYONE (even the fools that are dumb enough to pay that much in the first place) than you probably should just get a friggin job. i have children, am going through college, and i don't have a problem coming up with $60 a year. sometimes i think that people just whine for the sake of doing so...
Reply
also, not to over-dramatize this or anything, but if $60 a year is a big deal to ANYONE (even the fools that are dumb enough to pay that much in the first place) than you probably should just get a friggin job. i have children, am going through college, and i don't have a problem coming up with $60 a year. sometimes i think that people just whine for the sake of doing so...
Posted: Nov 2nd 2010 8:11PM Padilla7921 said
I will admit, I'm a little turned off by the price increase, but I'll also say that I've never felt like I've been ripped off when I paid for and continuously renewed my Xbox Live subscription.
Posted: Nov 2nd 2010 8:23PM Chris DPSN AggieCEO XBLThe Aggi said
@Padilla7921 neither do people that buy Dasani or Aquafina....until they drink Fiji....
Reply
Posted: Nov 2nd 2010 11:23PM Liquidfingers said
@Chris DPSN AggieCEO XBLThe Aggi
aaand is psn supposed to be fiji in this equation? comparatively, i always thought it was more like the tepid, malodorous sewer stank.
Reply
aaand is psn supposed to be fiji in this equation? comparatively, i always thought it was more like the tepid, malodorous sewer stank.








