Commentary

Xbox Is Only 60% Gaming

Call of Duty: Black Ops Like every other gamer in the known universe, I got my copy of Call of Duty: Black Ops this week. Unlike my younger game fans, I have a job that pretty much accounts for my waking hours during the week. As I look forward to this weekend, that unopened green game box beckons. Time for some serious killing.

And to be frank, that will be the first time my Xbox has been used for a game in quite a while. Until the new Apple TV and Roku boxes showed up here in the testing lab-cum-living room in recent months, my Xbox had pretty much become a Netflix device. And while my video gaming habits have been more depressed than most aficionados, this is not uncommon, according to Microsoft. At a BMO Capital Markets Digital Entertainment Conference in New York this week, VP and COO/CFO of Microsoft's Interactive Entertainment Business Dennis Durkin said that 40% of the Xbox Live time spent by members in the U.S. is for non-gaming purposes. Among the popular alternative uses of the connected box are Netflix, music playing via last.fm and Zune and social media interactions via the embedded versions of Facebook and Twitter. Xbox live also carries ESPN3 streaming services.

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Microsoft Xbox just pushed to its owners an upgrade to the Dashboard interface that seems to encourage these non-gaming uses. Navigation to music and film services is now easier and the social networking features are a bit more apparent.

Durkin was quoted in a CNet report telling the audience, "What we found is the core gamer might be the person who brought the console into the house, but as you widen the choices of content it broadens what people can do with the system." There are 25 million Xbox Live subscribers in the U.S. and about half of those are paying for premium access. Among the paid subscribers, Durkin says that they average three hours online a day.

As we have mentioned here before, the Xbox Live Dashboard is a remarkably effective advertising tool. It presents tiles of animated content to draw the user's eye and can click through to rich micro-sites for sponsors. The recently introduced Kinect full-body controller adds a new targeting capability to these ads and other media offerings in the system. The Kinect sensor detects different users in the living room. Durkin suggested that content and offers on the Xbox Live system could be customized to target specific viewers that Kinect detects in the room.

Welcome to Minority Report...in your living room.

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