Xbox Australia Talk Games On Demand Launch, Pricing, Future

Xbox 360’s Games On Demand service rolled out earlier this week. We spoke to Xbox Australia about some of those crazy prices they’re charging. The good news is that they’re listening to your feedback.

Games On Demand allows you to purchase and download full version Xbox 360 games. The launch lineup in Australia contains 11 titles, ranging from the great (Mass Effect, Oblivion, BioShock) to the not-so-great (Perfect Dark Zero). Prices, too, range from $29.95 all the way up to $99.95 for games that are 2-3 years old.

On Wednesday, I spoke to Andrew Jenkins, Xbox Live product manager for Australia, all about Games On Demand. Here are the highlights of our chat.

I began by telling him how good it is that we’re actually getting Games On Demand on Australia, considering there’s been a few things over the years that we’ve missed out on with Xbox Live.

Thank you. I think we’re benefitting more and more through the strength of the Live community in Australia. We’re one of the strongest Live communities worldwide for Microsoft. And that’s helped us a lot… with Games On Demand now and coming soon we’re able to bring the Zune Video service and its streaming high-def movies to Australia the same day as the US. Also, Facebook and Twitter will be coming soon and in parity with the rest of the regions. It’s very good stuff for Australians.

I asked about the launch titles. I mentioned that they’re all quite old, some are launch titles and some are from 2007. What was the thinking behind that?

Honestly, not only does Games On Demand provide that convenience factor, you know… you’ve got the comfort of sitting there in your living room and you don’t have to go hunting around for these titles at various retailers. But it also extends the life of them. These are amazing games, they’re top of their class and mostly drawn from our Classics range… they’re not always easy to find at retail. We want to make sure they have a strong life and that people can always enjoy them. Being able to offer these products on our service means that people are always going to be able to find the game they want to play. Of course, sure, some of these products you are going to be able to find at retail, but it’s all about adding another way of delivering that content to our consumers.

I asked about the plan for rolling out more titles, but Jenkins said they had nothing to announce, save to say all their publishing partners are on board with the service and looking to participate with their back catalogues.

I asked about the strategy for new releases and whether we’ll see games on there day and date with the retail release. Jenkins again said they had no announcements to make and reiterated that Games On Demand is about extending the lifespan of older products.

I asked about how Microsoft has positioned this service with their existing retail partners, given that digitial delivery is all about bypassing the retail channel. Jenkins had an interesting take on that.

The great thing is that it expands the retail reach. If you think about it, the guys at retail might not able to carry all these titles and keep them on shelves. But it’s really easy for them to keep Microsoft Points on shelves. Points are some of the strongest sellers right across the Xbox business. And by selling Points it gives the opportunity to keep selling Kameo, to keep selling Perfect Dark Zero, even though that title might not be on their shelves any more.

I asked if Games On Demand was a bit of an experiment right now.

I wouldn’t necessarily call it an experiment. But I would say that as we launch the service we will take user feedback, you know, what our consumers are saying about it, as well as sales trends to determine if we’re at the right price point for that particular product. And product pricing is going to range on our service, just as it does at retail.

I asked if Jenkins thought a title like Mass Effect, which is US$20 overseas but AU$100 here, was at the right price point.

Well, in determining price points we look at many different factors. We work with our publishers and look at the market and try to price accordingly. For Mass Effect we’ll look at that and continue to listen to what the community’s saying. You know, we just launched the service, so we’ll look at sales trends and ask if we’re priced at the right point with that product.

I asked about the typical consumer expectation that digital pricing should be cheaper than packaged goods and whether Jenkins had any thoughts about that.

These product that we’re launching with, they’re products that have been in the market for a long time and you can’t necessarily find them at retail. The convenience of getting it digitally delivered to your home is what we’re providing. That’s the reason why we’re selling these products. But if you can find them somewhere else for a better deal, we totally understand. You know, for every savvy shopper out there, they have options and opportunities.

My take on this is: it’s early days and Microsoft is currently testing the water to gauge consumer response. Yes, there is an element of convenience here, though I would argue it would be even more convenient to be able to download new releases too. Give it another couple of years and Games On Demand is likely to be the only place – outside of eBay and the odd lucky preowned find in-store – you’ll be able to get hold of those early 360 titles.

Yes, it’s great that Microsoft is listening to your feedback around pricing. They’re obviously fully aware of the reaction to some of the crazier price points. And if you respond with your wallets and don’t buy Mass Effect, for example, then they’ll clearly look at adjusting that price down. Hopefully the sales data from this launch lineup will clearly indicate what price points are acceptable for 2-3 year old titles.

But right now, at the current pricing, I couldn’t recommend any of those games.


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