360 Does a 180

[rmedtx]

Guys I found this article at fool.com. Microsoft is trying to get money out of peripherial makers. :mad:
I knew this was going to happen. They are showing their true colors.

Here's the article By Rick Aristotle Munarriz

August 11, 2005

For the hardware makers, the video-game business has followed the model of razors and blades. Microsoft (Nasdaq: MSFT), Nintendo (NQB: NTDOY), and Sony (NYSE: SNE) are willing to sell their consoles at a loss (the razors) in exchange for royalties from the software makers on each title sold (the blades). Ladies and Microgents, I introduce you to the third variable in the mix -- the shaving cream.


According to a story out of News.com yesterday, Microsoft is asking peripheral makers to pony up a piece of the action on Xbox 360 add-ons when the machines hit the market later this year. Until now, third-party makers of controllers, steering wheels, and other Xbox plug-in components didn't have to pay Microsoft a thing unless they wanted to feature the Xbox logo. This time around, Mr. Softy is incorporating security mechanisms into the promising, spec-heavy 360 that will be made available only to paying peripheral makers.


That will cut deep into the already tattered pockets of small companies like Mad Catz (AMEX: MCZ). Mad Catz has signed the contract with Microsoft, but with the software giant taking its cut off gross sales, it doesn't look as if Mad Catz's troubled income statements will get better anytime soon.


Paying royalties is no big deal on the software side. A company like Motley Fool Stock Advisor recommendation Electronic Arts (Nasdaq: ERTS) lives off such fat profit margins that it can afford to pay the format providers. Peripherals work on much leaner margins, so this move may backfire if there is a lack of affordable third-party peripherals out there. That's the risk that Microsoft has to take to make its hardware business less of a bleeder.


Being first to market matters. It was an advantage that Sony took advantage of brilliantly when its PlayStation 2 rolled out a year before its competitors' models, and this time around, it's Microsoft that has the head start. Let's hope it doesn't blow its lead by upsetting third-party ambassadors.


Shaving-cream pies? Trust me, they're just not as tasty as they look.

Longtime Fool contributor Rick Munarriz has an Xbox. He may pity the third-party hardware developers, but he will probably still buy a 360 later this year. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Here is the link to it:
Article (http://www.fool.com/news/mft/2005/mft05081103.htm?source=eptyholnk303100&logvisit=y&npu=y&bounce=y&bounce2=y)

[Cap'n 1time]

sounds like somthing MS would do alright... I would think they would loose in the end though because 3rd party companies can still produce for the other two systems. They may just drop the 360 and experiance the freedom of Nintendo and Sony. I think this would actually hurt MS more (in terms of money) because now they might loose third party support, and they will have to produce more of their expensive 1rst party devices- thus in the end loosing more money.

[marc.williams]

Well if microsoft back down and let 3rd parties make peripherals without a license fee, I bet that they (Microsoft) write a small clause into the warrantee agreement saying that the use of these products will invalidate the guarantee.

Just like Sony did years ago.

Those hard-drives could save all details of peripherals used on it... or Xbox live service could keep a database of all owners system specs... Does this sound like a conspiracy that Microsoft would do? With their history... YES!

[ptr.exe]

I doubt a database of periphials would be kept, 3rd party companies would easily find a way round even if it was.

They are just trying to reduce the amount of low quality 3rd party stuff to force people to buy the official gear, it's stupid and is basically MS shooting themselves in the foot, but that's microsoft for you.

[marc.williams]

Think about it... every USB device has its own identifier so the operating system knows what to do with it. Peripherals are classed as a HID device and this is written into memory so the operating system knows how to work it. Have you ever plugged in the original fat Xbox controller then changed it for the "s" version, occasionally you will see that the xbox software recognises each controller differently and will give you a diagram of the appropriate one. My Xbox, Dreamcast and PS2 recognise arcade sticks and steering wheels automatically.

Last week in an earlier post by another person, MS where going to charge a guy for Softmodding his xbox. How did they know it was Softmodded? The evidence was left on the hard-drive when it went for repair.

So how do Microsoft know when your Xbox is chipped... Xbox live service checks for mod chips.

I aint paranoid but something tells me MS are.

[ptr.exe]

It's difficult to design a chip that won't be recognised by live, as its such an intergral part of the system, the bios is changed which is easy to pick up. However i think that it would'nt be that hard for 3rd party companies to design their controllers/periphials to be recognised as official by the console. Whether that would be legal or not it beyond me, if it is then MS will get their way.

[rmedtx]

Well if microsoft back down and let 3rd parties make peripherals without a license fee, I bet that they (Microsoft) write a small clause into the warrantee agreement saying that the use of these products will invalidate the guarantee.

Just like Sony did years ago.

Those hard-drives could save all details of peripherals used on it... or Xbox live service could keep a database of all owners system specs... Does this sound like a conspiracy that Microsoft would do? With their history... YES!

I doubt they will bock out of that. We are talking about Microsoft.

[Cap'n 1time]

It's difficult to design a chip that won't be recognised by live, as its such an intergral part of the system, the bios is changed which is easy to pick up. However i think that it would'nt be that hard for 3rd party companies to design their controllers/periphials to be recognised as official by the console. Whether that would be legal or not it beyond me, if it is then MS will get their way.

I think your right. Comparing a controller with a mod chips isnt really a good idea.

A modchip is somthing that cannot be compared or replace any previouse hardware.. its just a new bit of hardware added to the system. If the machine detects somthing that wasnt their when the box was shipped it should just be able to notice it and blahblahblah.

As controllers already exist, assuming that they system detects software from the device wouldnt it just be a matter of copying that software to a thrid party device with a similare layout?

[marc.williams]

Listen, consoles since the Dreamcast have used the USB interface to connect to the operating system (even though they don't have the USB plug). Now USB devices all work in the same way... when the unit is plugged in it has a predetermined code on it to declare to the operating system how to work. In the case of joypads this is classed as a HID (Human Interface Device) after the computer knows how to treat the hardware it needs to know the limitations of the device. Every USB device holds a "system exclusive" message declaring its name and what it does. Even a PSP declares itself to Windows XP when you plug it in.

Every time anything happens on a modern computer a log file is created. Xbox live COULD gather this data and send it to microsoft without the user consent.

Microsoft are sneaky and have proved in the past that they DO do this sort of thing. When downloading from the microsoft site I now have to prove that my Windows is genuine. What is microsoft accessing on my PC to test this?

[Cap'n 1time]

Listen, consoles since the Dreamcast have used the USB interface to connect to the operating system (even though they don't have the USB plug). Now USB devices all work in the same way... when the unit is plugged in it has a predetermined code on it to declare to the operating system how to work. In the case of joypads this is classed as a HID (Human Interface Device) after the computer knows how to treat the hardware it needs to know the limitations of the device. Every USB device holds a "system exclusive" message declaring its name and what it does. Even a PSP declares itself to Windows XP when you plug it in.

Every time anything happens on a modern computer a log file is created. Xbox live COULD gather this data and send it to microsoft without the user consent.

Microsoft are sneaky and have proved in the past that they DO do this sort of thing. When downloading from the microsoft site I now have to prove that my Windows is genuine. What is microsoft accessing on my PC to test this?

oh, sure thats possible.. but what prevents other companies from just using the same specific "system exclusive messages" in another device?

well... other than the law?

[marc.williams]

Yeah, I think that reverse-engineering does break intellectual copyrights. Microsoft have fallen foul of this, so this one will be no stranger to them.