Kotaku is citing two unnamed sources that it says "have a perfect track record in getting these kinds of things right" to report that Microsoft's follow-up to the Xbox 360 will need a working Internet connection to start games and apps. And the site goes on to write that the system will only tolerate brief interruptions in that connection while the game or app is being used.
"Unless something has changed recently, Durango consumer units must have an active Internet connection to be used," one source told the site, referring to the internal code name for Microsoft's next system. "If there isn't a connection, no games or apps can be started. If the connection is interrupted, then after a period of time—currently three minutes, if I remember correctly—the game/app is suspended and the network troubleshooter started." Another source said this requirement was still in effect on development hardware as recently as two weeks ago.
Information suggesting that the next Microsoft console will need to be online is nothing new; numerousleaks and rumors have pointed in that direction throughout the last year or so. However, this is the first serious suggestion that such connectivity would need to be more or less continuous while a game is being played, rather than just checked once when a game or app is launched.
Requiring a persistent Internet connection, if true, would seemingly limit the audience for Microsoft's next system. Even today, only 68.2 percent of households in the United States have access to broadband Internet, according to the OECD. Surveys show that this includes 90 percent of homes with a computer, and that access tracks heavily with income (a 2010 study found that 73 percent of US Xbox 360 owners had broadband in the home). Broadband subscription rates are much lower in developing countries like Russia and Brazil, which just got Xbox Live service in 2010 (each is seen as an emerging market for game consoles). On the other hand, an online check could limit the impact of piracy and/or the resale of secondhand games, which Microsoft and many game publishers see as having a dramatic effect on their bottom line.
Of course, this is all still rumor for now, and Microsoft doesn't comment on rumors and speculation as a matter of course. Even if it's true at the moment, the company could reverse itself before officially announcing the system, which is widely expected to hit stores by the end of the year. Microsoft could even use a firmware update to remove any sort of Internet requirement after the system launches if there is enough public outcry (or market impact).
Sony has said that the PlayStation 4 will not require an Internet connection to validate or play games, though other statements by Sony execs have left just enough wiggle room for some to continue worrying.
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