The hot next-generation console from Microsoft may squeeze peripheral makers for licensing fees.
It’s a familiar story in the gaming hardware market. The big players like Sony, Nintendo, and the newest entrant, Microsoft, see losses reportedly of as much as $100 per console sold, possibly more. They’ve always made that back on the software side; by licensing their development kits to game developers, and collecting royalties on each game title sold.
That strategy seemed to be shifting to include online gaming. Microsoft launched Xbox Live, and Sony has had online gaming for a while. Each subscription sold means revenue to the hardware makers.
Further, a few ad companies have begun to deliver in-game advertising technology. Advertisers can get their products placed in online arenas in exchange for various prices. Now, Microsoft has found another channel it can squeeze to offset its newest game console costs.
According to MSNBC, Microsoft will require peripheral makers to pay for access to the console. New controllers, steering wheels for racing games, and other add-ons will have to be recognized by the Xbox 360 as valid peripherals, otherwise they won’t work.
It’s a bold move, and one that may push more than a few smaller players aside. It’s also one that may have gone unnoticed if not for an SEC Form 8-K filing by Mad Catz, a maker of gaming peripherals. In the 8-K form, Mad Catz discloses the agreement with Microsoft:
As an official Microsoft peripheral licensee for North America and Europe, we will produce a range of Mad Catz branded products that will be officially endorsed by Microsoft and carry the Xbox 360 license logo.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
