XBLA in Decline, says 2DBoy’s Ron Carmel: a case study for Open over closed

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Ron Carmel, of World of Goo fame, has written an excellent post on the challenges facing XBLA. He believes that the platform peaked in 2010 from the point of view of developers choosing the platform, that Microsoft hasn’t really noticed. He offers a ten stage plan for Microsoft to recover its standing, split into two lists of five (basically one consists of little tweaks and the other consists of “becoming more like the AppStore”. Ron clearly gets how unlikely the AppStore recommendations are to come to fruition.

He also gives some amazing nuggets of information:

• 48% of developers ranked working with Microsoft ranked the experience as “excruciating”, on a scale that went: Very Easy, So-so, Difficult, Excruciating. Only cell-phone carriers ranked worse
• When World of Goo was the top-grossing iPad app, it was grossing >$50,000 per day
• World of Goo’s sales on iPad have been around $2,000 while it floats around #225 and #250 on the iPad chart.

Why Microsoft is losing

You should read Ron’s analysis if you are interested, but here is the thrust.

XBLA is a curated platform. Microsoft believes that by curating the platform, it guarantees a high quality threshold, which makes customers trust the platform and be happier purchasing from it.

But Ron argues:

Players judge the quality of a platform by the quality and quantity of the BEST games available on it, not by the AVERAGE quality of all games

This is incredibly important. Microsoft’s process, designed to keep the quality bar high, involve:

• a negotiated contract
• a publishing relationship with MGS (or being a third party publisher of physical goods)
• working with a Microsoft producer
• working to a set of onerous TCRs
• and so on.

Its practical effect? Many indies are choosing other platforms and Ron’s analysis (which he admits is based on shaky methodology) suggests that developers with the highest Metacritic scores are the ones most inclined to be moving away from XBLA. The people staying there? 

360 retail publishers [who] are allowed to put whatever games they want on XBLA. That’s how you end up with XBLA games like Yaris, NBA Unrivaled, Crazy Mouse, and Beat’n Groovy, which have Metacritic scores of 17, 25, 28, and 29 respectively.

In essence, Microsoft’s insistence on a curated platform is alienating precisely the innovative independents who are the life blood a digital platform. Instead, those existing third-party publishers who have secured access to the scarce distribution that Microsoft is artificially enforcing on its digital platform are using their distribution power to shovel lowest-common denominator content to a captive audience.

Sound familiar? It’s as if Microsoft is trying to replicate the business model of the offline world on XBLA. Instead of embracing cheap distribution and unlimited shelf space, it is artificially trying to restrict consumers to a limited number of choices, similar to a retail store.

This is ignoring the new abundances. There is unlimited shelf space online. There is unlimited choice. Microsoft’s approach is to limit the choice before it is even developed; Apple’s (and others’) is to let pretty much any content through, and filter it for the consumer, not curate it.

Ron is relatively upbeat about the future, if Microsoft adopts some of his ten-point plan. I am less so. I think that the company is stuck trying to recreate the limitations of the physical distribution market, rather than embracing the opportunities created by the digital market.

I was going to say that I hope that I am wrong, but I’m not sure that’s entirely true. The sooner the world becomes more open, the better.

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