Saturday, March 14, 2009
I’ve gotten some interesting comments on my blog when I commented on a story published in the Consumerist.com.
For those who haven’t read it, X-Box live is actively discriminating against people who identify themselves as Gay or Lesbian (or who have the word Gay in their name. So people with the last name Gaywood or Gaylord can’t use the service).
This is blatant discrimination against 10% of the population, but as a private company Microsoft does have the right to discriminate when they offer services to the public. However it is a really bad business decision.
So I’d like to talk about the economics of discrimination. In sales discrimination can help or hurt a company. When a company targets groups with their products it is a form of soft discrimination. Apple designs and advertises their products aimed at two groups of people, the non-techie creative type and the Super Hardcore Techie (Those who skip the GUI interface and use the UNIX core of the Mac). This allows Apple to charge a higher margin for their machines than other computer makers.
This works for Apple because they tap into a more affluent (generally) segment of the population and they have built their entire company around making computers for that segment of the population. As a result that segment of the population is more loyal to the company.
X-Box Live on the other hand is a service designed for individuals who have some free discretionary income, have free time, and like to interact with other live people while playing games (16-30 year olds).
It’s a fact that Gays and Lesbians tend to have fewer children and have them later in life than straights. This means when they are in their early adult years they have more discretionary income and more free time as they don’t have to spend it all on children.
On the other side of the scale are the homophobes, who like companies that discriminate against gays. On paper they make up about 20% of the population although I’ve found that a lot of people who fit the profile of a homophobe (Belong to an Evangelical Church or are Mormon, republican, ect.) have gay friends and have no problem with their lifestyle.
Even if they were the actual 20% amount that wouldn’t translate into larger profits for Microsoft as they tend to have children earlier thus having less discretionary income and less free time, plus the conversations they like to have like potty training, their kids marks at school ect. Don’t really fit into the X-Box Live’s chat system. “Take out that monster, BTW my kid got an A in Basket Weaving.” As a result easily half these people (the 22-30 year olds) would never become X-Box Live members anyway.
That leaves two more groups 16-18 year olds and 18-22 year olds. For the 18-22 most of them are either in college or the military, odds are they know quite a few openly gay people already and will just avoid openly gay players like they do with openly gay people in life.
That leaves the 16-18 years olds. They are too happy to be playing the game to worry about the other players life outside the game, so it’s their parents who would determine if they could keep their X-Box Live account. Any parent who thinks that the Gayness can be spread over the Internet probably thinks that violence can be spread that way too and won’t let their kid have an X-Box Live account to begin with.
Microsoft’s policy is to actively turn away 10% of the population that are prime targets for it’s services to appease a group of people that will probably not be their customers anyway. This is especially surprising coming from Microsoft since it knows it would be costly if they tried the same thing with their hiring policy it would make the labor costs to high for even them to afford.
Those of you who know me, might be wondering how any of this effect’s me?
It doesn’t directly as I own a Playstation 3 and I’m married to a wonderful woman. However I do like to have a choice, if they don’t start releasing games that can use the power of the PS3, I may have to switch to the X-Box 4 in 10 years or so. If Microsoft continues this policy then their Live service will be very slow to improve, forcing Apple to come out with a similar service to grab the 10% of the population Microsoft is abandoning.
Although I love the power of my Mac, I would hate to try and play an online game surrounded by Fanboys.