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The Microsoft (NASDAQ:MSFT) Xbox back catalogue is coming to the 360 on Xbox Live. Games like Halo, Fable, Farenheit, Burnout 3, Psychonauts, Fusion Frenzy and Crimson Skies. At low prices. This is massive news for many reasons.

  • Here we have one of the big platform holders taking a big step in digital distribution. They really have been dragging their feet with this and so holding the whole industry back. It is inevitable that new release full price titles will eventually follow. Then we will have a new publishing model, the change will be huge.
  • Xbox Live continues to give Microsoft a huge USP (unique selling proposition) over Sony (NYSE:SNE) and Nintendo (OTCPK:NTDOY). It is the main event for Microsoft. I can see the possibility that one day Microsoft may license out their hardware (console) manufacture. This would be closer to the model that has made them so many billions on the PC.
  • Still no move into social networking. A pity. The Xbox live membership have so much in common with each other that Microsoft is in a unique position to create an instant, massive social network. This would be such a powerful USP that gamers would be deserting the other platforms. Plus it would create the potential for so many more revenue streams.
  • For game players this service means they will have far more titles available. Currently they are limited to what retail will support, which isn’t much. With this move the entire Xbox and 360 catalogue could be available to buy. Anywhere in the world and at any time.
  • For publishers this massively increases the selling life of a game from a few weeks to decades. This removes the imperative for blockbusters and opens the door to all sorts of niche products.
  • Sony must be kicking themselves that they took backwards compatibility out of the PS3. It prevents them doing what Microsoft has done, thus throwing a huge competitive advantage to their rival.
  • Revenue from this area was already growing at 1029% per annum before this announcement. This must be one of the hottest places to be in all commerce.
Source: Microsoft Masterstroke: Putting Back Catalogue On Xbox Live