I guess they feel the need to spin.

Afterall, saying "Well, the system has been selling insanely well based heavily on hype ever since launch, so a drop-off would be expected," doesn't sound too good.

This is such a bad move.

I wouldn't even know where to begin deconstructing this from an economic perspective. It is a terrible, terrible, terrible idea. The Xbox is in a very tenuous position. It's #1 in hardcore gamers and #2 overall, but if they keep fucking up, and Sony makes a few good moves (Hey, it could happen) the Xbox could quickly and shockingly fall to third place.

Microsoft should be working desperately to open the platform and increase value. Not lock it down, decrease value, and raise price. I mean, who do they think they are? The record companies?

Actually, in the world of computing, Microsoft has been one of the most open companies. Anyone can develop anything for Windows, Office, Internet Explorer, etc. In fact, in the history of personal computing, it's that openness, which was revolutionary back in the late 70's and early 80's, that propelled Microsoft to the leading position it holds today.

Contrast this to other companies, including Apple, Sony, Nintendo, Xerox, HP, and Phillips, and where they tried to rule with an iron fist, Microsoft made platforms (primarily software) on which anyone could make anything.

Now, we have Apple showing how an integrated, closed environment can be used to practically print money and every company on Earth, Microsoft included, is salivating at the possibilities.

What Microsoft is doing is shit, plain and simple, but don't forget their history.

Your point about publisher confidence is a good one, but if it harms the platform and the publisher simply because they think games will sell poorly, well, that's their own fault. The market is changing whether they like it or not, so they better find ways to adapt.

But my "net gain" argument is actually somewhat supported by data, that's why I'm better off making that assumption. But even better off, I don't make that assumption fully. I said that there is either no effect or a positive one.

The publisher argument is that of the three possible outcomes, the negative one is true. I'm arguing that no data bears that out and it is one of the other two. It doesn't matter which one of the other two is true, since both negate the publisher's argument.

Well, yes, piracy does cause lost sales. But that only works in discreet units of sale. This guy pirated a game, so he won't buy. But when a developer refers to lost sales, he's talking about the only number he knows, the final sales figures.

And it is on that number that the data indicate that piracy has either no effect or a positive one. Yes, it might stop a few guys from buying, but it may cause more people that would not have originally bought, to buy. This means that the one lost sale is counterbalanced by more gained sales.

Thus, there is a net gain. This hypothetical net gain is what the data indicates is true.