Microsoft's billion dollar online gamble

Lamborghini will be played online on Xbox

By Darren Waters BBC News Online staff in Seville

Software giant Microsoft has a vision, to have the world's largest online gaming community powered by its Xbox console.

But such a vision comes with a $2bn price tag and a five-year plan. It amounts to a large gamble for a company which is yet to overwhelmingly convince gamers that Xbox is the premier console on the market.

PlayStation 2 remains the market leader and Sony too has online ambitions.

In the next few years the two firms, joined by Nintendo, will be engaged in a battle royale for supremacy.

Education key

Xbox Live, as the online service is dubbed, launches in the United States in November, and in Europe and Japan early next year.

It is a broadband-only service which will cost about $50 for a 12-month subscription, on top of a subscription to a broadband supplier, and will allow gamers across the world to play against each other.

The Xbox subscription includes a headset and microphone which will allow gamers to talk to each other as they compete in games.

Will Microsoft succeed in its online gamble?

Microsoft stresses the "plug and play" elements of the service so that the non-technically minded can use it and it will need to demystify broadband if it is to attract young gamers to the service.

Michel Cassius, of Microsoft Europe, admitted that "education, education, education" was key to the success of Xbox Live, when so many people remain ignorant about how broadband works and its uses.

Easy gaming

Online gaming for PC users is not unusual but remains an unknown for games consoles.

Within five years every important game will be online

J Allard, Xbox creator

The advantage for software developers in creating online titles for consoles is that they can produce one title that is applicable for all owners of the same machine without having to worry about different configurations and connection speeds.

"With console plug and play you should be able to press a button and get online," said Glen O'Connell, director of communications for developer Rage, which is producing Lamborghini, one of the first European games for Xbox Live.

"Using Xbox Live is almost like the red button on Sky, you know what it is going to do.

"Xbox Live takes out the daunting, difficult aspects of online PC gaming."

Everyone in the industry believes online gaming is the future, but no-one, not even Microsoft, is 100% certain that it is the present.

"Within five years every important game will be online," said J Allard, one of the creators of Xbox.

"There will be new categories of collaborative and competitive console games that are possible only online.

"The ability to download new worlds, levels, characters, weapons, vehicles, teams, statistics and missions will change the way developers think about creating games, and will change the way gamers play them."

Kickstart broadband

The vision is bold but for the present the expectations are conservative.

Halo will be available to play online

Microsoft says it will be happy to ship 10,000 Xbox Live packs in the US over the Christmas period and same figure in the first few months of availability in Europe.

"The pre-sale figures in the US have been staggering," said Mr Allard.

"It will be a pretty successful introduction but it is not about the numbers, it is about the experience and quality," he added.

Microsoft hopes the appeal of online gaming will boost Xbox sales. Broadband suppliers, such as BT and NTL in the UK, will help kick-start the long-predicted broadband revolution.

British Telecom and NTL have signed up as launch partners with Xbox Live in the UK as they continue to push broadband.

Bill Goodland, director of internet at NTL, said online gaming and Xbox Live "at this stage is not the most important reason for people to sign up to broadband".

"There is no doubt online gaming is going to appeal to people and will bring in a lot of new people to broadband.

"One of the most exciting things is that it will attract people to broadband who do not have a PC."

Online revolution

In contrast to Sony, Microsoft has set up the entire network for its online service with four data centres in Seattle and Tukwila, Washington, Tokyo and London and all games will be played through its servers.

They have taken a punt, a risk, and I think it will pay off

Richard Badger, Rage

Sony prefers to allow games developers to make their own arrangements for online capabilities.

"There has been a misconception in the press that because we are running the service that we have some degree of control," said Mr Allard.

"Far from it, we are simply trying to establish some simple conventions to take the hard work away from the publishers and developers."

Richard Badger, product manager of Lamborghini on the Xbox, said Microsoft had made it very easy to develop online games.

"They have taken all the headaches away. We don't have to worry about upgrading, patching, finding your friends online, that is all looked after by Microsoft.

"The beauty of it is - you create one account and if I want to find a friend online I know instantly if he is there.

"There is no worry about playing the right version, or using the right map."

Developers know that Microsoft is taking a gamble with Xbox Live.

"Microsoft don't know how the customers will react and neither do we," said Mr Badger.

"But Microsoft is the world's largest company. They have the money to stick by it and I think they are right that online will be the next gaming revolution.

"They have taken a punt, a risk and I think it will pay off."

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Will Xbox Live be a success? Is online gaming the future? Here are a selection of your comments. (This debate is now closed).

The difference between online PC gaming and console is that PC gamers establish communities around games, they develop rankings and forums for tips and comments. How will you achieve this on the console without a keyboard?
Steve, UK

Like I want my gaming to be controlled by Microsoft! The Xbox only has about two playable games anyway, why would I want to play those online in some sterile controlled environment?
Eddy B, UK

Yet again we see Microsoft 'inventing' something that others have done already. Sega bet it's fortunes on online gaming with it's Dreamcast console years ago. The response was so bad that they left the console business shortly after. Massively online games have been tried before, but people are unwilling to pay for them - Planetarion for example () dropped from a peak of over 200,000 players to less than 6000 following the introduction of charges, and they may also be forced out of business soon
Andrew Robinson, UK

No, for two reasons. Sony have offered their users free choice of ISPs. With Microsoft, you have to use their service and pay the monthly subscription fee - whether you play any games that month or not. Something that I notice they've been very quiet about as the US does not like paying for net access. Second, online gaming is still a niche, mainly raved about by the PC fraternity. Most people would still prefer a few mates round playing games in their lounge to playing against some unknown halfway around the world. A big gamble, but I think a loser.
Gaz H, UK

It may take a few years to really catch on, but being able to talk freely through a TV set playing a game with many people in their own homes will be quite something. It is the way forward for consoles but the prices for broadband would have to drop.
John, UK

At the end of the day, consoles are the best when its you and some friends round together playing games. If you want online games get a PC. The games are cheaper and so is connection
Papa,

Xbox Live has the potential to revolutionise console gaming. The reason PC gamers rave about online play is that its second to none in terms of its immediate "pick up and go" effect. Release a game such as Counter-Strike on the Xbox, offering online play, and you may not necessarily covert the PC gaming faithful, but you will hook the millions of Xbox owners who aren't currently privy to this genre of play. Software support will be key to Xbox Live's success.
Chris W, UK

Sadly the success of XBox Live may not rest on the quality of the experience but on the perceptions gamers have about Microsoft. Personally, I can't wait to play Halo2 online.
Stephen Davey, UK

As the development of internet goes on, networks will speed up greatly. There is already no need for centralised access, nor for internet nor for gaming. People are today able to connect among each other forming short-lived networked games. In the future this possibility will even be further developed. So definitely there is no need for Microsoft to introduce such improvements, internet will bring them to us. When Microsoft thinks in terms of improvements, they think about taking control.
Quentin, UK

I think Microsoft have it dead right. By keeping it all nice and simple to encourage non-technical users and supporting the development community they have a real chance to make this happen. They just need that killer app to make it a consumer must have.
Neil, UK

Let's get the Microsoft has to first persuade broadband owners to lower the cost of that product. After that, for sure, online gaming will take off at the speed of light.
Neil, Guyana

$50 a year seems fair, but as net access is not free ($20 dial up or $35 broadband per month) you need to have broadband already. This will probably take off for people who already have the broadband connection. Certainly, they will be measuring their audience from things like the Halo championships.
Stuart, USA

The article doesn't mention that X-Box is broadband only. So, even assuming you can get broadband, you're talking £25-30 per month. With Sony's PS2, which will work with dial-up, the prices will presumably be around the £15 per month mark. Ultimately I think the Microsoft plan is right however! I think broadband does make better sense as features such as being able to talk to other players through a head-set isn't going to work quite as well over a dial-up connection. I just think Microsoft might have invested about three years too early.
Peter, UK

I think Microsoft are doing the right thing. Sony make the game maker fund all the server. So when a game stops selling they'll stop hosting the servers and the game won't be played anymore. As for Xbox having a lack of games, true. But look what's coming out with Xbox live. It's better than the Sony launch titles. People should stop bashing Microsoft so much sometime they do do the right thing.
Ashley, England

Who says you don't have your choice of ISPs? Granted, it's broadband-only, but dial-up just isn't well-suited to console gaming. Besides, Microsoft's subscription model is a fair sight better than leaving the individual publishers to bleed their customers dry on their own accord. With Xbox with Live, you pay once and forget about it. Centralised quality control is the vital key to making Xbox Live work. Consoles aren't PCs, and you can't treat them as such when it comes to online gaming.
Brian , USA

The evidence so far shows that Microsoft are facing an uphill battle and could end up licking their wounds like Sega. They are right in stressing the importance of education about broadband. It should be completely plug-and-go and preferably wireless. Like broadband itself, the XBox needs killer applications to rapidly become successful.
Matt K, UK

PC games like Unreal Tournament have proven that online gaming can be very successful. The Xbox with the new Unreal Championship online game will most likely be extremely popular as well. I would certainly give it a try.
John, USA

Paying for the ISP's service and then extra for the Xbox service will put many a person off, including myself, particularly as you need at least a 512kbps broadband link to be able to use Xbox Live. This costs £24.99 a month currently from NTL (who have just upgraded people on there 512kbps service free of charge to 600kbps). Add to that the much talked about figures Microsoft will charge and you are talking silly money to be able to play only a few games. Doesn't make sound financial sense to me.
Gregg Stuart, UK

As the costs of broadband fall, and the ease of use improves, it is inevitable that online gaming will become widespread. Interactive home-entertainment must overtake static broadcast content eventually, which is why both Sony and Microsoft are investing serious time and money in placing themselves at the centre. And if that Lamborghini game plays as good as it looks, Microsoft will have made a great start.
Andrew, UK

Broadband only eh? Well, perhaps it would help if more than 30% of the population of Wales could actually get broadband then.
Peter, Wales, UK

I've been playing online with my Dreamcast for over a year. It's been good fun, but I won't be getting Xbox Live. Why? It's too expensive. $50 a year is enough to buy a new game that you can have friends round to play with you.
Tim Miller, England, UK

Online play for consoles will have to come about to keep them a step ahead of the PC games, considering speed and graphics of PC's nowadays. The main difference between the two is that you can network play on PC (and the fact that there are countless good games for PC and only Halo for the Xbox). The cost of the service for broadband is about the same for the subscription, stick with the PC Games and spend the subscription on broadband for the PC!
Lard, UK