Video Game Buttons Blog

November 28, 2006

Microsoft officials in Europe have moved to block downloads of content from the U.S. version of Xbox Live Marketplace to so-called dummy accounts, which are Xbox Live accounts set up non-U.S. residents to appear as if they are based in the U.S. Very sneaky.

Dummy accounts are created to take advantage of downloads that are available earlier or exclusively to North America (such instances have been rare), but with the new availability of TV shows, movies, and other video footage on the American service, Microsoft has apparently moved to stop the practice.

The dummy accounts are not being banned, but exclusive content downloads are being blocked to European users. According to a statement from Microsoft’s Chris Paladino, “Details aren’t all in yet, but I do know for a fact that we are not banning the accounts. We are blocking downloads in cases where gold accounts are being used to gain U.S. content in foreign marketplaces.”

Any Xbox Live account being accessed from an IP address not corresponding to the indicated country for a given account is in danger of having content downloads restrictions.

“Microsoft is not a charity…”

Microsoft’s Robbie Bach said that manufacturing costs of the Xbox 360 have come down significantly, making a price cut for the console a viable option. “Notwithstanding Robbie’s comments to the contrary, Microsoft is not a charity, and they won’t cut price just because they can,” said video game analyst Michael Pachter of Wedbush Morgan Securities. “Rather, I think Microsoft is a price taker, and they will cut only when Sony does.”

And when will that be, Michael? “And I don’t think we will see a cut from Sony in the conventional sense during 2007. Instead, I think that they may add wi-fi to the 20GB model and keep it at $499. Microsoft might then cut, but probably not below $349.”

When it launched, each Xbox 360 cost Microsoft $525 to produce, but the premium console costs only $323 to create today, leaving potential margin for a price cut.