Adam Orth, creative director at Microsoft Studios, resigned earlier this week after outraging consumers with comments about the next Xbox needing to always be connected to the internet. But despite the backlash, "always-online" functionality is a necessary and possibly revolutionary part of gaming's future.

Adam Orth Always On
Adam Orth's Twitter picture. The creative director resigned from Microsoft following comments he made about always-on functionality.

I know it's creepy, I know it stinks; I know it means you won't be able to play that bootleg copy of Halo. But the fact of the matter is that as computer games become bigger and bigger business, always-online functionality is going to be essential.

Rising development costs are one reason. At the moment, you can license, build and roll out a AAA game for between £15 million and £20m, but as Enders analyst Heloise Thomson told us back in February, we can expect that figure to triple going into the next console generation. That means, unfortunately, that second hand games need to be killed off, or at least controlled.

Despite the digital mob hounding Adam Orth first on Twitter and eventually out of his job, "always-on" is actually a double-edged sword. It's a little unnerving right now (Cliff Bleszinski nailed always-on when he compared it to Xbox Live switching to support only broadband, not dial-up) but digital rights management will be fundamental in sustaining AAA developers in the future. Undoubtedly it will change the way we buy videogames, but that won't necessarily mean spending more money.   

And that's only if it's integrated to the point of authenticating games; as Thomson told IBTimes UK in the wake of Orth's resignation, always-online is a broad concept:

"Always-online may mean the box requires a digital 'heartbeat' for game verification purposes, but also, it may just be to encourage users to sign up for an Xbox Live account. If this is the case, it may be that Microsoft wants Xbox Live to be central to the experience of the Durango like the iTunes Store, so that you land on the Xbox Live page when the device is switched on. From there, Microsoft can promote a more diverse service that offers games, movies and music.

An always-online Xbox would give developers a tighter grip on their product once it's on the shelves, implementing activation codes which mean you always have to buy new. It's a terrible shame - it's going to mean belt tightening for consumers and a drop in the amount of new games people play each year - but if the market wants AAA production value in the future, the market is going to have to pay full whack for it.

Freemium

That's unless always-online goes the other way and what we actually see is an entirely new - or at least, somewhat new - business model for game developers.

Things are already different. Unlike the older console generations where you only paid a one-off price for a disc or cartridge, what we have now is a kind of drip feeding. Thanks to existing online functionality, developers can release games almost in portions, adding things like patches and DLC months, sometimes years after the boxed release itself has hit shelves.

What I imagine with always-online consoles is that but to a greater extent. Think of the free-to-play model used by mobile game developers today. They charge either a low price or nothing at all for the game originally then sell through to players with optional, in-app extras. With a guaranteed, always-online audience, developers will be able to more effectively push DLC and add-ons - their equivalent of in-app purchases - to consumers.

If they know, for certain, that you're always online then they know, for certain, that they have a chance of selling you this stuff. They can drop down the original cost of the disc on the basis that money will be recouped later through sales of additional material.

The alternative is that jackbooted approach of prohibiting unauthenticated games and keeping prices the same. That'd give developers a better shot at returning their investment but also risk alienating their customers.  

Thomson says that while people may be angry now, history has tought us that people adapt to change pretty quickly.

"The outrage that 'always online' is generating online (somewhat ironically) is related to several factors that affect forced online experiences. However, the market tends to acclimatise and forget. Steam is a good example - when it first launched Half Life 2 in 2004 on Steam and asked gamers to verify their game on the server, the minor delays caused by that process created mass forum wailing. Now more than 50 million people have Steam - and there's offline mode as an option after initial game installation anyway. Microsoft could well offer that option if it finds people are reluctant to purchase because they believe the device won't work for them."

Edge cases

 Cliff Bleszinski was right again when he said that "edge cases" shouldn't be a decider when it comes to pushing new technology:

"My wife and I were discussing these issues this afternoon and she mentioned the example of "Hey what if I'm a gamer who wants to go to a cabin in the woods for a week and I don't have online access there?" My response was "Unplugging entirely sometimes isn't always a bad thing. And that's the edge case. The week-long vacation to the cabin is only 30 hours of not playing a game or a device that's built for much more. Technology doesn't advance by worrying about the edge case."

But although that's a noble idea, Microsoft not holding back technology that's beneficial to many for the sake of the few, it's not so cut and dry as that. According to Thomson, decent internet connectivity amongst Microsoft's US and UK customers isn't as common as you'd think:

"Perception of a big city tech giant being unaware or callously indifferent to the internet speeds in rural areas is what sparked the outrage in the latest Twitter vs. Microsoft debacle. But those are not insignificant. According to the FCC 138 million people out of 314 million in the US don't have broadband out of choice, due to cost or don't even have the option in their area. 

"In the UK, 25 percent of premises with an internet connection receive less than 2Mbps, and the divide between rural and urban areas is really stark: average speeds in rural areas are 5.9Mbps versus 14.6Mbps in cities and towns. That is not an insignificant proportion of their major markets who may struggle to stay 'always online'".

Cliff Bleszinski
Cliff Bleszinski created the Gears of War series before leaving Epic Games in 2012.

So, aside from distancing consumers who can't afford to buy new games, Microsoft, if it adopts an always-online policy, may also run the risk of alienating customers because they are simply unable to use its new machine.

Again this depends on to what extent the next Xbox is "always-online". There are plenty of people in rural areas who use computers, tablets and smartphones to download from the internet just fine. If an internet connection is always needed on the new Xbox only to verify games and obtain small updates, even these "edge cases" should have no problem. But if developers go the more freemium business route I suggested earlier, and large chunks of games come via the net rather than the disc, that's when there could be a problem.

Acclimatise

Regardless of its form, Thomson believes the market will eventually acclimatise to always-on:

"Always on DRM will help publishers to control and protect their content, and Microsoft will eventually explain what it means on 21 May, sparing no expense in making sure everyone feels comfortable with it affecting their console experience. However, I do think they need to make a definitive statement on this sooner rather than later - it's another 5 weeks until their announcement and every day they wait is another potential consumer thinking this new Xbox is going to cause them more trouble than good."

"But with all things, enough marketing and a good dose of time will mean in a year everyone will forget they were ever outraged."