Face Off: Was the Xbox Naughty or Nice? December 01, 2005

Introduction

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Alan's comments in BLACK
Ben's comments in BLUE


Ben: Hi Alan, thanks for inviting me. I'm the stereotypical Guy On The Internet who apparently has nothing better to do than post anonymously on Firingsquad's horrible comments section. I'm not a game programmer or designer, but I have played a few computer games, and that's why you should spend your valuable time reading whatever I write. Oh, and it turns out I have a degree from the same elitist left-coast institution as Alan.


Alan: Go Cardinal! Actually, being invited to a Face Off is one of the perks of being a registered user (with an up-to-date email address). How else could we send you an invitation? Well, let's get started. Since this is your first Face Off, I'll start.

Fundamentally, PC gamers benefit from the rivalry between GPU manufacturers. As ATI and NVIDIA joust for your dollar, they need to introduce faster GPUs at more aggressive prices, meaning that PC gamers will benefit. As expensive as a SLI 7800 GTX 512MB or a Crossfire X1800 XT is, it would be even more expensive if either company had a monopoly. It was Microsoft's money that helped NVIDIA take the lead in the GeForce 3 and 4 era. It was also NVIDIA's pre-occupation with Microsoft that led to the GeForce FX stumble, allowing ATI to catch up and take the lead with the Radeon 9700. The evenly matched rivalry between ATI and NVIDIA that exists today was a result of Microsoft's meddling.

Ben: This has to be the first time anyone has congratulated Microsoft for encouraging competition. I admit that some of the money Microsoft pours into the gaming industry eventually trickles down to hardware advances. But you could have made the opposite point on competition just as easily—that the Xbox stifled competition by using NVIDIA exclusively for years when they had the upper hand.

At any rate, the 3D graphics market has never seemed monopoly-prone. Years before anyone had heard of the Xbox (e.g. 1998), gamers could choose between 3Dfx, NVIDIA, ATI, and maybe Matrox and S3 for your graphics.

Alan: Well, I wouldn't say that Microsoft intentionally wanted to encourage competition. Even so, if someone donates money to a good cause or volunteers for selfish reasons, it doesn't diminish the impact of their money.

By 2000, graphics technology was moving so fast that only the best engineers could keep up. S3 and Matrox (and PowerVR) had fallen far behind. 3Dfx would have collapsed on its own weight through feature creep and poor management. NVIDIA was already on their way to the top and this had so concerned ATI that they bought-out ArtX, the company that would give ATI their Radeon 9700.

The exact impact on Microsoft on the ATI/NVIDIA rivalry is difficult to know. NVIDIA received $200 million up-front from Microsoft for the Xbox. That was as much as the entire 3dfx company was worth in 1998, when the Voodoo2 was at its peak. Likewise, the original plan was for DirectX 8 to provide an API for the pixel shader in the GeForce 2 GTS. But something happened to the DirectX8 spec where all of a sudden, the minimum level of support was the GeForce 3. That something was Microsoft.

Without Microsoft, it's possible that the GeForce FX could have come out earlier. Then again, if NVIDIA never received that $200 million investment from Microsoft, maybe ATI would have had an even bigger lead on NVIDIA when they launched the Radeon 9700.

Ben: Agreed, let's not discuss what Microsoft intended. Do companies even have thoughts and intentions? (Do they have feelings? If so, I don't want to know.) But the prima facie case is simple: the Xbox funneled money into NVIDIA in 2000-2001 when they were strong. This extra money helped them develop Xbox's NV2A GPU and its PC brother the GeForce 3, giving them an even larger lead in the PC graphics market. Unfortunately, Microsoft and NVIDIA got into a disagreement about what the original Xbox contract entailed. Essentially, Microsoft came up with a legal argument that would have forced NVIDIA to sell chipsets below cost due to a “requirements obligation.” NVIDIA argued that no such obligation was present in the original contract. A third party arbitration panel agreed with NVIDIA, but the Microsoft/NVIDIA relationship wouldn’t be the same.

Alan: Did you know that at the time the original $200M deal was signed, Microsoft and NVIDIA thought they could sell 100 million Xbox units? It's no wonder that NVIDIA was disappointed when sales, especially after Microsoft refused to accept delivery of a batch of chipsets because of a change in the security codes.

We shouldn't forget that for Xbox 360, it is Microsoft's investment in ATI that will probably make unified shaders reach the gaming market earlier. The dollar amount for the investment is unknown, but the combination of Microsoft and Nintendo is only about $37.5 million! Compare that to the annual R&D budgets of $270 million for both NVIDIA and ATI (almost 4 times what VIA spends annually). Given the huge R&D costs for a graphics company competing for the flagship position, the GPU market may not be big enough to allow increased competition without causing a negative effect to NVIDIA and ATI's R&D budgets.

Do we really want three mediocre graphics companies instead of two stellar ones? The Xbox may have failed to increase competition in the global sense, but it certainly increased the innovation in the field.



SIDEBAR: R&D Budgets: IBM: $5.6 billion
Intel: $4.8 billion
AMD: $935 million
Nintendo: $190 million
VIA as a whole spends a little over $72 million.

Debating the hardware

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Ben: The Xbox may not have increased competition in the graphics market, but is the motherboard chipset market a different story? NVIDIA didn't just use Microsoft's money to build the Xbox's graphics processor, the NV2A, they also supplied the Xbox's initial chipset.
(The chipset is the most important component of a motherboard; it lets CPU, memory, and other components talk to each other.) And just as NVIDIA leveraged its NV2A expertise to make the GeForce 3, it used its Xbox chipset experience to create the nForce chipset for PCs.

Alan: The motherboard chipset is a very different story. If we can agree that Microsoft had a substantial role in the development of the original nForce, then we can recognize that a lot of good has come out from that investment.

Before the nForce, your options on the Intel front were limited. You had Intel chipsets and then second-tier VIA, SiS and ALi/ULi chipsets which were best used on budget systems. When it came to AMD, you usually had AMD's own chipset which offered the most reliability. If a feature was unstable (i.e. USB), AMD would completely disable that feature. Of course, while your system didn't crash, you had no native USB support with the AMD Athlon MP chipset and no native USB2 support for the AMD Opteron chipset. The problem with AMD's chipsets is that AMD never wanted to be a chipset manufacturer. They were forced to do so in order to support their own CPUs. The VIA, SiS, and ALi/ULi chipsets for the Athlon were all good, but not up to the level of Intel's designs.

NVIDIA may not have been perfect with the nForce releases (the even numbered releases always seem to be better), and there were recent issues with their firewall. That said, the nForce 2 was what made the AMD Athlon XP the super-gaming platform that it was, and nForce 4 was what made SLI gaming possible. The nForce really established itself as the high-end alternative to the Intel's chipsets. In fact, even Dell uses NVIDIA chipsets for their flagship gaming rigs – that's a big deal since Dell receives so much marketing support from Intel.

Since motherboard design doesn't require quite as big of an R&D budget, the entrance of nForce has led to a renaissance where we now have a wide range of choices, including those from ATI as well. I won't say that Microsoft was instrumental for this resurgence of motherboard chipset options, but the success of nForce was probably a driving force to motivate ATI.

Ben: We’ve talked a lot about hardware, and you make a strong case that Microsoft’s Xbox money has helped increase the technical sophistication of PC graphics processors and chipsets. Obviously this is a way that the Xbox has helped PC gamers, right?

Not so fast. The ultimate value of gaming, PC or otherwise, is fun. And an increase in the speed of graphical innovation does NOT make gaming more fun! Now bear with me a few moments if you think I’m insane. Think back to your favorite game from five years ago. Are you actually having more fun playing games now than you did five years ago? Probably not. Do you spend much time playing games that are five years old? Again, probably not—the graphics would look too primitive.

The solution to this paradox is that gamers have grown accustomed to 2005-level graphics, and now need better graphics for the same amount of fun. If you had never seen a game from after 2000, you could have fun with 2000-level graphics. Saying that gamers are stuck on a hedonistic treadmill may sound like hippie mumbo-jumbo. But the basic principle that enjoyment is referenced-based is widely accepted, helping to earn Daniel Kahneman a Nobel prize in economics. (And who has less flower-power than economists?)

Alan: You know, Daniel Kahneman actually looks like an economist. To answer your question though, I'm actually playing Final Fantasy VIII …

I agree with you here. Whether a game looks pretty and whether the game is fun are two different things. Is Quake 4 actually better for deathmatch than Quake 3? Probably not. We're all guilty of demanding better and better graphics. Still, graphics and gameplay aren't mutually exclusive. Better graphics can add to the quality of the game and help to make the setting that much more cohesive. More powerful CPUs has helped us build gameplay devices like rag-doll physics in Half-Life 2, and the "do whatever you want" scenario in a game like GTA: San Andreas probably wouldn't have been possible on a Super Nintendo.




SIDEBAR: South Park would be a good show if the graphics didn’t suck so much.

The games

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Ben: All of Microsoft's Xbox money may have helped PC gaming hardware, but what about its software?

I think most PC gamers have had the experience of playing a new game and immediately realizing it has been "Xboxed"—designed for the Xbox and only half-heartedly ported to the PC. Often a game designed for an Xbox with 64MB of memory, a controller, and 640x480 resolution won't play well on a PC with 1GB of memory, a keyboard and mouse, and 1280x960 resolution. Game developers save money by treating the PC like the Xbox's little brother. Sure they save money, but the results just don't look right.


Alan: Is keyboard and mouse the right user interface for every game? One of those "Xboxed" games might have been X-Men Legends II. It earned a solid 88% and that's because it's bringing a console action-RPG to the PC market. The graphics are definitely improved over the Xbox and so what if you need to get a USB gamepad to really enjoy the game? No one tries to use mouse + keyboard for a driving game when a force feedback steering wheel is an option.

Games like X-Men Legends II may never have reached the PC market if not for the Xbox. Action RPGs just don't sell that well on the PC, but they do great on consoles. The shared development environment helps minimize the risks developers face when making games. Other cross platform games like EA Sports games, Need for Speed, or even Call of Duty 2 benefit from the ability to share resources, even if it's just shared artwork.

The Xbox/PC cross platform games may not be must-have killer apps, but they represent solid games. With the Xbox, gamers have had more options and more choices.

Ben: A keyboard and mouse aren’t the right interface for X-Men Legends, exactly because it’s basically an Xbox game. True, a PC gamer could buy a gamepad, scoot back 5 feet, and experience X-Men Legends as intended. But how many do? A PC gamer could also spend $20 more and buy a Gamecube—that doesn’t make Resident Evil 4 a stellar contribution to PC gaming.

Without the Xbox, would there have been no PC X-Men game at all, or would there have been one that played better? In general, it seems reasonable to suppose either could have happened. Without the Xbox, some of the Xbox+PC games may never have been developed, but the others would play better on a PC. This change alone may benefit the PC gamer, who typically may only want to play a few of the best games. Then there are the resources spent developing Xbox-only games, which don’t help PC gamers at all. Halo is a notorious example of a game the Xbox deprived the PC of.

Alan: Halo is the example that always gets mentioned because it's the one that stings the most. It's truly an superb game. To put things in perspective, Halo 2 completely outsold Half-Life 2. After two months of release, Half-Life 2 sold 1.7 million copies. Halo 2 sold 5 million copies in just 3 weeks – and gamers actually had to pay to play online. Still, do we blame the Macintosh for stealing away our Marathon? Should PC gamers blame Sony for stealing Gran Turismo 4? What about Metal Gear Solid 2? Well actually, we can thank the Xbox since the PC port of MGS2 is based off the Xbox port.

The loss of Halo 2 for the PC reflects the difference between the PC and console markets. Halo 2 helps Microsoft sell more Xbox systems and Xbox 360s. Halo 2 PC wouldn't have done that for them. There's no similar incentive on the PC with the exception of NVIDIA's The Way it's Meant to Be Played and ATI's support of developers like Valve Software. Until board manufacturers and PC builders start investing in software developers, we're going to lose more and more manufacturers to the consoles with time. Even if Microsoft didn't buy Bungie, it would only have been a matter of time before Sony or Nintendo chose to buy them out. Yeah, we lost Bungie to the console world -- but at least the Xbox did something good for PC gaming as a side effect.

Ben: In a sense PC manufacturers invest in game developers by not charging them licensing fees. A PC developer won’t get a big check upfront, but they also won’t have to give a lot of their game sales back to Microsoft.

Let's look at one of my favorite genres, the RPG. With a keyboard and high resolutions, PCs deal with text much more easily than consoles do, and PC gamers accept seeing text on their screen. Compare these dialog screenshots from FS reviews of Planescape: Torment, Baldur's Gate 2, or even Icewind Dale to dialog in new Xbox/PC RPGs like Knights of the Old Republic or Fable. It seems developers are pressured to cut text out of their games to appeal to the console market. Is it possible the Xbox has made the text-heavy RPG a thing of the past?

Alan: I don't know if you can blame the Xbox for that. In general, PC games have always had an additional level of sophistication in comparison to consoles. Perhaps it was because PC gamers needed to understand how to troubleshoot hardware/software problems, or that "back in the day" PCs were only purchased by those who also used the system for productivity and educational purposes. The key to the MPC revolution (Multimedia PC) was probably the fact that you could get an entire encyclopedia on one CD. Back in the day, I paid $800 for a Toshiba 2x SCSI CD-ROM and the Pro Audio Spectrum 16 to go with it. Hopefully the new Sam and Max game coming out in 2006 will rekindle that entire market.


SIDEBAR: Star Control 2 and X-Com: UFO Defense (UFO: Enemy Unknown) were two of my favorite games in the early 90's.

What the devs say

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From my point of view, DirectX8 never caught on in a big way on PC. Given that most of NVidia's sales in the DirectX8 timeframe were in GeForce4 MX (DirectX7) cards, and that the Radeon 9700 (which caused the real breakthrough in shaders) was DirectX9, in retrospect Xbox's influence in that area was limited.

Developers saw Xbox as a game console, which is traditionally a very different market from PC (though that's less of the case nowadays). Nobody expected a lot of overlap. But there indeed was a lot of overlap, with a number of major games (like UbiSoft's Splinter Cell) shipping across all console platforms and PC, and selling well on each platform.