• by Jonathan Blum , January 2, 2009

Forget MSNBC.

Microsoft's latest TV ambitions are all about Xbox. Suddenly, Microsoft's gaming platform - known for interactive hits such as Halo - is beginning to look and smell like a linear, nearly old-school cable TV channel. The latest additions to the hardware platform, Xbox Live Marketplace and the software company's resell agreement with Netflix, now routinely offer fare similar to multichannel TV. The Incredible Hulk, Fred Claus and many others sit comfortably next to Master Chief.

Even true TV content like South Park is on the Xbox. Creators Trey Parker and Matt Stone cut a deal to have all 10 seasons of the series and the movie Bigger, Longer, & Uncut available in HD through Live Marketplace. And Microsoft is feeling its producing chops. Its Webisode property "The Guild" is coming back for a second season in 2009.

Marketers are paying attention. "I have been downloading content on Xbox Live for years, ever since it came out," says Todd Purgason, executive creative director of JUXT, a boutique online advertising and strategy agency in Newport Beach, Calif. Purgason claims the service has a much wider variety of content than the market gives it credit for. And the interface competes very favorably with new-media titans like iTunes.

"The new platform allows for more user engagement and a social networking experience," says Renee Whittingstall, associate media director/digital for Dallas-based TM Advertising. These new factors offer advertisers many interesting ways to get users to interact with their brands, Whittingstall says - including both traditional sponsored rentals, preroll video, and actual shopping and commerce during media sessions.

Microsoft argues its media-ized game platform fits nicely into today's down-spending, price-sensitive, contracting economy. The company recently cut the entry price of Xbox 360 to $199. Though this unit has limited storage and would need upgrades to fully utilize its media services, the company says data shows that shoppers want what Xbox offers: units that work well at home, that a family can enjoy together and that can be used over time.

It also doesn't hurt that Xbox offers plenty of future upside. "The way to really break this wide open will be to create set-top boxes for cable and dish that include Xbox technology," says Tom Napper, senior interactive producer at Chicago-based interactive shop Element79.

Others agree. "I'm excited about thinking of ideas for Xbox and Xbox 360 Live. Who wouldn't be?" asks Todd Crisman, senior vice president for interactive at Element79. "Whether it's embedding your ads into an office-slacker-targeted, first-person shooter console game, providing a free Xbox Live download to teens in the marketplace, or sponsoring a movie that my mom is streaming, I'll tell you, I'm interested in talking to Microsoft and content developers about opportunities to connect all the above and surround a family with age-appropriate messaging so that it touches every member of a household." Take that, HBO.