Xbox Lassos More Content to Wrangle More Eyeballs

Microsoft continued to expand its television offerings for members of its Xbox Live Gold service Monday by adding HBO Go, Major League Baseball video and Comcast’s on-demand video service.

Comcast Xfinity TV allows Xbox Gold members to access the cable carrier’s expansive library of entertainment programming whenever they want it.

HBO Go offers live and original entertainment from the premium content cable network, from its latest series like “Game of Thrones,” to oldies-but-goodies like “The Sopranos.”

With MLB.com, users can watch any major league game in progress or, in split screen mode, two at a time.

Microsoft’s Kinect controller can be used with the new services to navigate through program offerings with voice or with gestures.

The Big Picture

Xbox 360 owners who want to take advantage of all the new additions will need to expand their entertainment budgets. An Xbox Gold subscription is US$60 a year; HBO Go/Xfinity, $90 a month; and MLB, $25 a month.

However, Comcast subscribers will be relieved to know that they can gorge themselves on Xfinity offerings without their usage being applied to the cable company’s 250 gigabyte broadband data cap.

These latest offerings to Xbox Gold members are part of Microsoft’s larger strategy to make its Xbox console into an entertainment hub, according to Scott Steinberg, a video game industry consultant and author of The Modern Parent’s Guide to Kids and Video Games.

“Microsoft sees the big picture in the battle for the living room,” he told the E-Commerce Times. “That’s positioning the Xbox 360 not only as a gaming device, but as a full-fledged digital lifestyle and multi-media hub.”

Focus Away From Hardware

Microsoft wants to make its console a one-stop shop for connected entertainment, he said. That strategy is being prodded by current hardware lifecycles in the gaming industry.

“What Microsoft realizes is that the current generation of consoles is roughly on a 10-year lifecycle, which is about twice as long as past console generations have lasted,” he observed.

Given the maturity of the existing systems — they’re six years into the lifecycle — companies aren’t focusing on raising the technology bar for their consoles, but on differentiating themselves based on software and services, he maintained.

“Microsoft’s decision to expand its roster of entertainment channels and on-demand programming is just an extension of that strategy,” he said.

Capturing Eeyballs

That strategy appears to be working, especially among Xbox users under 25 years old. More than 60 percent of the Xbox users in that demographic use the console as their primary source for online video, according to Strategy Analytics.

“That means they watch more video on the Xbox than they do on a laptop or computer,” Strategy Analytics Senior Analyst Jia Wu told the E-Commerce Times.

“Putting more content on that platform will help those users stay on that platform, spend more time on the platform and increase the value of the Xbox console in general,” he said.

Kinect is also playing a role in the strategy, Steinberg observed. By pairing it with its services, he said, Microsoft not only adds an element of differentiation to its offerings, but also hopes to heighten enjoyment of them and expand engagement, keeping fans glued to their screens longer.

Perk for Providers

Microsoft might not be the only beneficiary of its content expansion strategy. Service providers like Comcast and Verizon may benefit down the road, too.

“There’s a recognition in the service provider space that they need to be making their content more accessible outside the traditional set-top box to appeal to younger viewers,” Kurt Scherfvice president and principal analyst with Parks Associates, told the E-Commerce Times.

The audience for Xbox programming will skew toward younger males, a demographic that’s expected to lose its interest in paid TV subscriptions in the future, he explained.

While extending their content to devices beyond the set-top box is driven by customer satisfaction, he noted, there’s an element of self-interest in it, too.

“It’s a way of helping them reduce their costs of delivering service because providing a set-top box to every TV is an expensive proposition,” he explained.

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