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Microsoft-published games will be available

Microsoft Corp. (MSFT) has cleared the muddied waters somewhat about its plans regarding "always on" digital rights management (DRM) and used games for its upcoming Xbox One console.  Until now much of the reports on the topic did have some official sources -- Microsoft employees interviewed at press events -- but Microsoft had not formally announced its plans as a company.

I. Microsoft Looks to Shift the Blame for Used Game Bans to Third Parties

The good news when it comes to used games is that Microsoft won't charge you an additional fee on top of the inflated rates used game stores typically charge.

For Microsoft-published games, the stated policy is as follows:

Microsoft does not charge a platform fee to retailers, publishers, or consumers for enabling transfer of these games.  We designed Xbox One so game publishers can enable you to trade in your games at participating retailers.

Note the key phrase is "participating retailers".  That most likely means the days of buying games at garage sales or on Craigslist are at an end.  It also may prohibit customers from buying and selling games on auction sites like eBay, Inc. (EBAY).

Used Xbox 360 games
Third party publishers get to ban used game sales or charge extra fees.
[Image Source: Multiplayer]

Microsoft allows more liberal sales policies for third party publishers -- but it also allows them to opt out of used game sales.  Its policy for them is as follows:

Third party publishers may opt in or out of supporting game resale and may set up business terms or transfer fees with retailers. Microsoft does not receive any compensation as part of this. In addition, third party publishers can enable you to give games to friends. Loaning or renting games won't be available at launch, but we are exploring the possibilities with our partners.

As publishers like Electronics Arts, Inc. (EA) have already looked to lock out used gamers and don't seem overly concerned about negative publicity, it seems likely that at least some of them will ban used game sales altogether now that Microsoft allows them this option.  This is a pretty sneaky tactic from Microsoft.  Remember, Microsoft gets no license fee on these sales either -- but by allowing third parties to make the decision on whether to ban the new games it can shift the blame to the publishers.  

EA Madden 25
EA will likely be among the first to ban used games, given that it's
already tried to do so in the past.

One loophole may be for customers to sell a game via unauthorized means and then "give" the game away.  This will only work with acquaintances and online buddies, though, as you're required to have been Xbox Live friends with the recipient for at least 30 days before the transaction, and "each game can only be given once" (seemingly suggesting subsequent transfers from the receiver are forbidden).

II. "Always On" -- It's Official, Folks

Microsoft has already stated that it "hopes" developers will make games unplayable offline (or on slower internet connections) by taking advantage of its cloud-processing features.  Microsoft revealed that its suggested connection for stable play will be a 1.5 Mbps connection, which means that users in some rural areas may be out of luck when it comes to certain titles.

internet connection
No internet, no Xbox One, Microsoft says. [Image Source: C Blog]

But even without cloud computing, you won't be able to play any titles without at least a periodic internet connection.  In its announcements Microsoft made "always on" official.  As rumored, Microsoft's console must "phone home" every 24 hours (you get one free hour without a check if you play a game you own on a friend's console).  The company writes:

[The connection will be used to] verify if system, application or game updates are needed and to see if you have acquired new games, or resold, traded in, or given your game to a friend.

Engadget queried Microsoft regarding providing offline playability to overseas military officers playing Xbox or customers in rural regions.  Microsoft's comment was:

The blog posts on Xbox Wire detail everything we can share today. We look forward to sharing more details in the months ahead.

In other words, if you don't have a stable, always on internet connection, you may not be able to use the Xbox One unless Microsoft changes course from its currently announced plans.  It's slightly ironic that Microsoft fired Creative Director Adam Orth for arguing in support of the policy on Twitter:

Adam Orth comments
..then went and carried out the rumored policy anyhow.

Microsoft also revealed that that it would allow users to disable the voice control activation ("Xbox On") and offer a set of privacy controls at launch. 

Sources: Microsoft [1], [2], [3], Engadget





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