Xbox One: Understanding Games Licensing

There is a lot of confusion over how games will work on Xbox One. Gamers know that some kind of "DRM" will be in place, and this has been the source of concern and even fear-mongering by certain sites (Kotaku, I'm looking at you).

However, I think it's easy to predict what Microsoft is doing, and that the fear may be unwarranted. The following is my "educated speculation". If I am right, then I will have no concerns over buying this console. Let's see if you agree.

Xbox One: Unified Licensing Model

The central new idea on Xbox One is that ALL games will be licensed as "digital downloads", whether or not you purchase then on physical media. The disk just becomes a convenient physical carrier (to avoid 50Gb downloads).

A game on physical media is "registered" to your account when you first install it. This is identical to making a purchase on the Xbox Live Marketplace, and you can use the game on whatever console you install it to (and on as many consoles as you like, as long as you are logged in to play). Because then game is registered to your account just like an Arcade title today, you won’t need to re-insert the game disk each time you play the game.

Will there be support for common scenarios such as sharing a game between family members or installing on up to two consoles in the same household? Unknown at this point, but I am betting Microsoft will have thought about this too.

Playing with Friends

You can take your disk to a friend's house to play it, just as before, though now the game is automatically installed to their hard drive. However, they don't "own" a license to the game when you leave. They can, however, purchase a license (I believe this is what some have called an "activation fee") for the game on Xbox Live Marketplace. This is no different than if you downloaded a copy of Castle Crashers to your friend's console while visiting today; you both can play while you are logged in, but when you leave, he doesn't "own" the downloaded game unless he also purchases a license from the Marketplace.

Trading, Reselling and Lending Your Games

If you sell or trade your game to a retailer, the game will be deauthorized on your account when you trade it in (to retailers who are participating in Microsoft’s reseller program). If you sell it privately, it sounds like Microsoft will have a way to "deauthorize" the game on your account, so that the game remains licensed to one, and only one, user at a time. I believe this will happen automatically when another user installs the game from the same physical disk.

This means you will still be able to lend your games to your friends to play. When they install the game, the authorization will transfer to their account and you won't be able to play your installed copy of the game (in the same way that today you can't play a game without having possession of the physical media). When they give it back to you, you "reinstall" it (I’m sure the system won’t physically copy the bits again) and the authorization will revert back to your account.

Just Like Steam, Only Better

Note that other than the fact that you can buy a physical games disk, this is just like buying a game on Steam or iTunes, except that Microsoft has worked out a way for you to resell your digital content, which I think gamers will come to understand is an industry first. If this system works the way I have described, it could have a number of benefits for gamers and for the industry:

  • Because all games are licensed as "digital downloads" publishers may allow their games to be sold online at launch rather than months or years after a game has been available in the retail channel
  • Since the game is "authorized" on your account, you do not need to present the physical disk when you play, so you can get in and out of games much faster
  • When games are sold or traded through an authorized games reseller (such as Gamestop), the game developer gets a cut, redressing today’s system which exclusively benefits retailers
  • Piracy in general may be reduced
  • Because of this, game developers and publishers may come to view the Xbox One as a more desirable platform, thus attracting more games and digital content for Xbox gamers

It’s you’re move, Microsoft. Don't screw it up.