why modding an Xbox hurts everyone

Scott writes:

“It's not the consumers fault that MS is losing money on each XBox sold. That kind of argument doesn't fly with consumers.(awwww, poor multi-billion dollar Microsoft is lost money on this XBox it took me 4 months of saving my allowance to buy). I don't think people should be punished financially (or by invoking the DMCA) for installing non-MS approved software on their XBox, or PlayStation for that matter.”

Scott, you are right that it's not consumer's fault. But I don't think that's the point. Speaking as a consumer who bought his Xbox with his own hard-earned cash, I recognize and appreciate the fact that I paid only $400 (that's Aussie dollars) for it rather than $1000 (or whatever it would have cost me if there was no MS subsidisation). I understand that the only reason I could buy it for that price was that MS and the game developers expect to make money off of me over the life of the product. That's the business model and that's what I bought into when I purchased the product. Not very different conceptually from buying a subsidised mobile phone from a telco and signing up for a two year contract. If you break the contract only a month into the deal, and say “hey, I want to use another provider“, they are going to get annoyed. In the Xbox scenario, MS is the provider you are signing up for when you purchase their subsidized console.

So, although I'm a geek at heart, and I understand the desire to be able to run whatever I want on something I paid for, I also accept there's a bigger picture here. If people screw with the model, it will collapse. MS will stop subsidising consoles. Xbox will close down. There will be no more games. I won't get to play Halo2, 3, 4 or 5. I won't get to live out my geek boy fantasies of fighting online virtual battles against hundreds of rocket-launcher totin' geeks. AND THAT WILL MAKE ME ANGRY. And, trust me, you wouldn't like me when I'm angry. 🙂

Comments (26)
  1. I think XBOX live is a pretty good reason not to mod your xbox – or at least purchase the LIVE games.. surely this is the direction the xbox is heading?

  2. Scott says:

    Your argument doesn’t make any sense. You’re not buying a business model if you buy an XBox (well maybe YOU are since you work for MS). I didn’t sign a contract that said "I will use the XBox for only playing games and I will use it for x amount of time". If you break a cell phone contract, there are monitary penalities. They aren’t doing it because they are annoyed, they are telling you about it ahead of time. I understand that if I choose to mod my XBox that my ability to use the XBox live network will end. If someone comes up with a method that allows you to install Linux w/o having to modify the hardware in any way and that doesn’t interfere with the XBox’s ability to play games would you do it? What about Windows CE?

    It’s not my job to make sure that a company survives. It’s the companies job. The company set the price, I paid it. That’s as far as my responsibility goes. That’s as far as their interest should go. So far, I’ve only purchases 3 games for my Xbox. How many am I required to purchase to make sure that MS makes money on their products? 2? 3? 10? all of them? What if, in the entire XBox collection, there are only 2 games I want to play? Am I a bad customer because I’m not subsidizing Microsofts investment in the XBox? Do I have a responsibilty to buy all MS products that they don’t price correctly (or at least at a loss)? Should I be running MS Bob right now? What if I buy an Xbox for the sole purpose of using it as a DVD player and music player? Am I ruining MS’s business model? Should I care?

    Again, Microsoft (and Sony and Nintendo) are playing the odds when they price their console. Nintendo gambled that reducing the price of their console to $99 would increase sales, they were right. They are also hoping that people will buy a lot of games for their GC (I did) and the license money they get from developers will make up the difference. It’s not my job to make sure the house wins.

  3. Scott, you’re right. It’s not your job to make sure the house or Microsoft or anyone else wins, and you didn’t sign a contract. That’s not what I’m saying. I’m just suggesting that deliberately screwing with the business model hurts the console games industry which in the long run will mean less games. So, the question isn’t do you owe Microsoft anything, it is what’s in it for you long term? Do you want a healthy games industry or not? If you don’t care, then run Linux on it, run over it, use at as anchor as Peter says. 🙂

  4. Scott says:

    Let’s see,

    In the course of my lifetime I can name off the following game consoles.

    Atari 2600*

    Atari 5200

    Atari Jaguar(I think it was Atari)





    Super Nintendo*

    Sega Genesis





    GameBoy Advanced/SP*

    Nintendo 64

    Sega DreamCast

    Sega GameGear

    Playstation 2*


    Nintendo GameCube*

    Nokia N-Gage

    The ones with a star are the ones I remember as MAJOR sellers. That isn’t counting any the Mac, Windows, or Linux platforms.

    I don’t think that the game industry is going anywhere soon. If people don’t buy the games to go along with the console, the console goes away (see 3DO and DreamCast). If Microsoft doesn’t have compelling games and a reason to keep me using my Xbox for it’s intended purpose, and I’m not saying they don’t, then it will go the way of other failed consoles.

    For the record, I have an Xbox and I don’t plan on modding it. I like Xbox Live (gamertag: KnowBuddy) and the thought of getting kicked off it is enough to keep me out of the box. But if I were to mod it, I’d probably only put a bigger hard drive in. 8GB? So I can rip songs to the HD and download new content for my games but I only have 8GB? I’ve got 20 GB of MP3s!

  5. hey, now you’re talking my language! I’ve got 20Gb mp3s myself. Sitting on a Creative Nomad Zen. I would love to have them on the Xbox as well. At the moment I just plug the Zen into my Bose. No big deal, but seeing as the Xbox is already connected…

    You’re right about the game industry not going out of business if Microsoft goes away. But its the principle I’m talking about here – and you know that. My post could apply just as well to Sony. As a gamer, why deliberately make it harder to game producers to get us the games we want to play? To make a point that you can?

    My XL tage is Napoleon V. I’ll be lookin for ya. 🙂

  6. Frans Bouma says:

    The point is: it’s YOUR hardware, why can’t you do with it what you want? Opening your VCR and adding whatever violates your warranty but that’s all. Opening your XBox should also only violate your warranty, it shouldn’t be ‘a crime’, because if something in there is still Microsoft’s, you haven’t bought the machine but leased it.

    (I also doubt it is not allowed it europe to mod your XBox)

  7. Dennis says:

    One of the top TV network executives made the same argument a year or two ago. He said if you skip over commercials, you’re breaking an implicit contract with the networks. He said that going to the bathroom during commercial breaks was morally equivalent to theft. It’s the same principle as your Xbox argument…if you buy the product, you should buy into the entire business model. Just as silly.<p>The basic assumption in a free market is that everyone acts in their own best interest. If it’s in my best interest to buy subsidized hardware and modify it for my own purposes, then in a free market I get to do so. It’s up to Microsoft, and the television industry, to come up with a business model that works, without asking their customers to violate the most fundamental principle of economics.<p>As Scott said, Microsoft is playing the odds. They’re selling at a loss on the assumption that they’ll sell enough games altogether to make up for it. They know that some customers, for one reason or another, won’t buy enough games. Whether that reason is boredom or hardware hacking makes no difference, economically.<p>If not enough games are sold, it won’t kill the Xbox. It’ll just raise the price of the hardware…or, actually, prevent the price from going down quite so fast. No biggie.

  8. Dennis says:

    urg…no preview, no editing, no warning that html tags don’t work.

  9. Bryan says:

    So, if I buy an XBox because I only wanted to play one game (perhaps it was Halo), am I therefore morally obligated to buy more games from Microsoft because the one game isn’t enough for them to make a profit?

    Of course not!

    Or what about Gillette? Am I morally obligated to buy Razor Blades from them, instead of the cheaper alternative Walgreens or Osco Drug cells me??

    Hell no!

    The manufacturers know very well that they are taking a big risk when they sell a product using the razor blade business model. Compare Microsoft to Sony… Microsoft wanted to beat Sony, no matter what the cost. They knew it was going to be a costly gamble, and they lost out. Sony still won, and Microsoft lost billions. That’s why it’s called a gamble.

    Sony, on the other hand, has been raking in cash because they kept their hardware reasonable, cut custs to the point where it was profitable, and focused on the games.

    What consumers do with their hardware is their perogative. Microsoft knows this. Sony knows this. It’s not MY fault Microsoft didn’t execute properly. That’s the nature of the beast, and I shouldn’t be punished because of Microsoft’s failings.

  10. Dennis says:

    One more note: To cover their hardware deficit, Microsoft has to figure the average number of games each xbox owner will buy, and add enough to the price of each game to cover the cost of the box. Thus, the current system penalizes people who buy more games than average.

    Cameron, you’re defending a pricing model that causes enthusiastic users like yourself to subsidize people whose xboxes rot in their closets.

  11. Peter Torr says:

    I’m sure I’ve bought enough XBox games (that rot in the closet 🙂 ) to make up for everyone else on this thread 😉

    My Live tag at the moment is "ShowMeBox" (it wasn’t intended to be rude… honest!) but that will likely change when my subscription runs out.

  12. Two things I’d like to add about modchipping as an aside —

    1) you can be modded and use Live!, just don’t go on Live! with the modchip enabled. Any decent chip has an option to be turned off and has ways to show you they’re on. In fact, a new BIOS revision for one of them just appeared that prevents Live! from even working when it’s on.

    I consider this a win-win; you can run emulators and XBMP, Microsoft makes sure everyone is playing legit copies of games

    2) When you have the modchip installed, you are suddenly empowered to be able to /back it up/ (think of your saved games) and replace the drive when it fails on you. You may say, well, there’s external memory cards! But there are some saved games that are too big for even the largest memory card. Microsoft has no solution for this. Whoops. Here’s a case where the modchip is enabling a fair consumer scenario — backing up.

  13. ok i just am about to get my box modded, now you said you cant play live when its on. um so if i turn it off ill be good? and one more thing i dont really care about burning games because the only games i like are live ones and i know you cant play live when the game is burned onto your xbox, but can you burn dvd’s?

    thats all i need to know, ok now one more thing again. i agree with the person saying we bought into an xbox its ours now we should be able to do what we want because we bought it, if we couldnt do what we want with it then we are basically renting it . Because i can buy a car and drive it off a cliff and i wouldnt get in trouble because it’s mine, but if it was a rented car then i would. im just saying plenty of people buy games alot of people cant afford to mod an xbox believe me micrsoft is fine they always will be.

  14. JP says:

    I got my Xbox off ebay, it needed repair.

    I fixed it.

    I buy my games at BlockBuster used for 9.99-19.99

    I have a few 80G hard drives on my desk.

    One day I may try to mod the xbox.

    I might even kill it in the attempt.

    Then I will have to buy another one.

    Why is it such a big deal if I mod it.

    I still buy my games. Microsoft still makes money.

    I met my target and then some.

    When the Xbox first came out the target was 9 games.

    No after all this time it is down to 3 or 4.

    No one should feel sorry for buying the hardware "cheap??".

    This is just what microsoft does, this is their way.

    They jam their product into the consumer, flood the market, take a loss, till all their rivals quit or get crushed. They are on track and doing well by my count.

    Just another note about the harware side of things; the xbox system is a intergrated 733mhz P3 with a 8G Hard Drive. It is not worth more then the price they are selling it for. I could mass produce an 1800mhz pc with a dvd and cd recorder for the same price. Add a 20 bucks more and a larg hardrive and I could build you a TIVO. Harware is not the cause for this debate.

    It is about the users rights to use their xbox for whatever they want. Microsoft is just sobing cause they did not think of a way to market modding and upgrades to the public. Give it time, they will learn from their mistakes and the Xbox2(squared) will be a modular system that you can buy hundreds of licenced aftermarket components for.

  15. charles says:

    r u people carzy, theyve fixed the modding to be able to play on xbox live of course this is for entertainment purposes only: theres a switch thgey have now that if u decide to play xbox live u can just turn off the mod and still play games on ur hd on xbx live.the switch is outside the console i saw this on techtv.com being done.

  16. TJdude says:

    i just add lights that doesnt screw it up that much…

  17. hoov100 says:

    modding my xbox is my choice it shouldnt be illegal people by comps and mod them and its legal your taking the risk not them if you screw up o well.

  18. microsoft inc. says:

    i am a representitive of microsoft inc. we are not going to make a law that states you cannot modify an xbox since if you do something wrong it will fry your system therfore you will more then likely to buy another thus more profit. sincerily microsoft inc.

  19. steevo says:

    I don’t know how much you people know about computers, but I can buy a 733 MHz pIII for about $39 right now on pricewatch.com, without buying in bulk. Further, 64 MB of RAM is only $10… Added up, an XBOX isn’t that great of a computer, albeit a great gaming machine. If you really wanted a 733 MHz computer, than buy one, they aren’t that expensive. Microsoft isn’t losing money on the hardware. With the prices they get from buying parts in bulk, the current price of $149 isn’t going to hurt them in the slightest. So mod away. And quit trying to give me an attack of conscience by making me think I’m ripping off the richest guy in the world. Cry me a river.

  20. Darryl Downey says:

    Bull Shit

  21. abi says:

    if you just back up your games is fine but don’t do piracy please buy your games everybody wins.

  22. justin says:

    The fact that one can get a 733mhz pIII for 39$ is irrelevant. Being very similar to a pc dosen’t constitute a device being a pc. There is no way to gage how much it would cost you to build a "xbox clone". Last time I checked the weren’t selling geforce III video cards(which is what the xbox contains). Xbox DOES loose money off of every xbox. The plan for the xbox wasn’t too make money with the xbox, but to take away a large enough market share from sony that the xbox 2 will be successfull. I think microsoft could of tryed harder to stop people from modding the xbox. Notice how easy that mod chip fit in, only wire was actually a little difficult to solder. Why did microsoft leave those points free on the xbox in the first place if they didn’t want people modding it?

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