Microsoft's misguided Xbox Live strategy

Xbox Live - a big fail in SAMicrosoft has arguably the best offering available in modern console gaming with the combination of the Xbox 360 platform and accompanying Xbox Live service. However, the global rollout strategy for Xbox Live is far behind that of its primary competition; the Playstation Network (PSN). The main reason Microsoft Xbox Live is one giant fail is that it is blocked off to most of the world, and is too restrictive even where it is available.

I use my own country, South Africa, as an example of Microsoft’s misguided strategy. The South African gaming market is the fastest growing in the world, according to sales recorded during 2007 and 2008. South Africans have flocked to the Xbox 360 and rewarded Microsoft for launching the product in their country at a great price – it is cheaper than the Playstation 3 and Nintendo Wii, making the 360 the most affordable console available in SA.

However, Microsoft has not launched Xbox Live here, and avoids journalist enquiries as to when it will be launched, if ever. We are constantly told that South Africa is “on the list” for scheduled launch, but Microsoft can not give any indication of when and will not disclose more details.

Meanwhile, Playstation Network is up and running in South Africa and has been for some time, allowing South Africans to play games with each other online and purchase digital content.

Worst of all, Microsoft unethically sells its Xbox 360 games in South Africa at full price – even though the online components of the games, including simple multiplayer online gaming, can not be accessed without an Xbox Live account.

Take Gears of War 2 for example. This is one of the most popular titles available for the Xbox and has been a huge success. It is an expensive game too. However, in South Africa we can only play the campaign mode of the game, which is a small portion of what is included on disk as GoW2 was designed primarily for multiplayer. We can not play against other players online, or access extended content for the title.

We pay the same price for the game as Xbox 360 owners in other countries do, but get less than one third of the content for the price. This is simply dishonest on the part of Microsoft.

In the past South Africans have found a way around the situation by setting up Xbox Live accounts and lying about their location – telling the service they were based in the United Kingdom, for example. They could then set up Xbox Live Gold Accounts using their South African credit cards and play against each other online, amongst other things.

This solution was far from ideal, mainly because it is against the terms of use for the service. It also no longer works as Microsoft has stopped accepting credit cards from countries other than what was specified during account set-up.

And it is impossible to change your country setting, so if the service ever does launch locally, South Africans will lose their gamer points and purchased content by setting up new accounts – which is the only way to change the location setting.

The country-setting lock is ridiculous. If you live in New Zealand, for example, and then immigrate to Australia, or if someone from one central European country moves to another, they cannot take their Xbox Live account with them.

South African bandwidth is also good enough for multiplayer gaming. I know this because I lied about my location and set up a gold account which I used to play games with friends, both internationally and back home. Bandwidth is definitely not a good reason to keep the service from us and I can’t think of any other reason why Microsoft would ignore the fastest growing gaming market in the world where there are more Xbox 360 owners than in some European countries.

I can only assume that Microsoft has little to no understanding of the local market, which suggests the company has not done its homework, or is ignoring its local staff about realities in South Africa.

The strategy is misguided. Plain and simple.

I can only hope someone from the Microsoft Xbox team reads this. The product is great and we would love to be able to use it in South Africa. Playstation Network has proven that it can be done – and Sony gets a lot of local support for this, even though the Playstation 3 is overpriced.

If Microsoft does not bring the service to SA, then it must stop selling its titles at full price.

Ignoring fans is a big no-no for any company and Microsoft should know this. I hope it changes its tune soon and either gives us official access to Xbox Live or a decent answer as to why it won’t.

*Edit: *Since writing this post I have received a response from Major Nelson of the Xbox team via Twitter. Great to hear from him and hopefully this will lead to something positive in terms of Xbox Live in SA and other countries.

Major Nelson's response

I'm a writer and broadcaster who also designs apps and strategies for disruptive startups in the financial world. Find out more on my about page.