"Whether or not we should go on TV, for example, to promote Video Marketplace is something we've been discussing internally," he says. "It's challenging to communicate all the services we offer. You can't just call and have us deliver and set up the box. It still requires the knowledge to set up a network that connects to Xbox Live."
Staying true to video game enthusiasts remains a priority, but finding the perfect message to communicate all the services Xbox offers has become a challenge for Microsoft. While it recognizes that most consumers buy a game console based on their desire to play video games, Microsoft also wants consumers to discover all the features Xbox 360 offers, including Xbox Live, Video Marketplace, and Media Center.
"Sony tries to market the PlayStation as a Blu-ray player and computer entertainment system, but, first and foremost, it's a game machine," Penello says. "As a marketer, it's a tricky challenge to communicate all the services Xbox offers."
Still, Xbox fits into Microsoft's vision for connected entertainment, from Zune and Windows Mobile to Media Center and Media Room. The scenarios bantered about in theory for years are now starting to become reality.
Historically, the company has marketed the Xbox 360 as a box that sits at the center of the living room entertainment system. It extends digital media from the PC to the television to the portable media player, such as Zune.
Microsoft also will rely on new media partnerships to market services. Those agreements were announced at the Consumer Electronics Show earlier this week.
The company unveiled deals with NBC Universal, Disney-ABC Television Group and Metro-Goldwyn-Mayer Studios to enhance entertainment content through Xbox Live and MSN online services. The deals add to existing partnerships with CBS, MTV Networks, Paramount Pictures, Turner Broadcasting, UFC and Warner Bros to provide content through Xbox Live network.
The deal between Microsoft and NBC Universal will bring consumers live and on-demand content from the 2008 Olympic Beijing games. About 3,600 hours of Olympics events will become available.
Microsoft also will join British Telecom to deliver high-definition gaming, television and movies to BT customers who own Xbox 360s. Microsoft Mediaroom Internet Protocol TV (IPTV) will power the service.