I've seen plenty of different pricing models for games. From full retail to DLC pricing to indie fare that costs pennies to free demos, but with the appearance of a new Karaoke game, Microsoft may well have crossed the weird boundary into full-bore crazy.
What's truly noteworthy about this game is that it's a strange combination of Pandora and "Glee: Karaoke Revolution". Much like a night at a karaoke bar, users will pay by the hour to get lyrics onscreen and music with the vocal tracks removed so that users can provide the singing themselves, but they'll also get access to over 8,000 different songs. The library is part of The Karaoke Channel's library, so it doesn't seem Microsoft will have to go through the studios for their deal.
This shows two critical industry-level points at once. Not only does this show an interesting new path for gaming pricing structures in general--an hourly pricing structure is largely unheard of--but it also provides evidence of Microsoft's commitment to open up the Xbox to new and unusual experiences.
With the growing rise of mobile gaming, as evidenced by not only the rise of smartphones and tablets but also the popularity of the Wii console, it shows that unusual experiences in gaming are starting to take on a whole new popularity. Admittedly, there will likely be some who don't much care for the thought of continually renting a game, but there will also likely be some who like the thought of only paying for a game when they need it, especially for a game that they're not likely to use very often anyway.
Microsoft's making some very unusual moves, and with a new console likely to be coming into play soon, that bodes well for the enterprise as a whole. If Microsoft starts taking chances, they may well generate some very exciting new prospects, and Karaoke might be one of them.
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