Xbox Live – The Shift to Social Networks

In the past six months, Microsoft’s Xbox Live has had 14 million subscribers connect to the service. By comparison, HBO and Cinemax packages net around 40 million, XM radio around 19 million, and services like Netflix approximately 9 million. What does all this mean? Well, all of these services play into the digital age and the shift in how entertainment is acquired in the world. The Xbox, embraces such digital convergence far better than the other consoles, and has produced well over $1 billion in gross revenue with Xbox Live alone since 2001 and intends to make use of this new age.

Currently, Xbox Live has really only snared the hardcore gamers. Microsoft executive, Shane Kim, wants to expand this market as he talks about the “New Xbox Experience.” Its purpose: to shift Xbox Live from a mere multiplayer matchmaking tool to a much more engrossing entertainment based social network, and with the digital attunement of the console, it is not a far step from where it currently is and the update will be launching on November 19th.

The new Xbox Live will allow users to not only play games, but to actually communicate with one another through the use of cute avatars (sort of a Microsoft version of Nintendo’s Mii avatars). When in the network, people will not only be able to socialize, but also find new entertainment methods beyond games such as music, videos, and more. Furthermore, the interface has been made simple and easy and allows users to easily make new friends, and discover all sorts of new media (it will even be integrated into Netflix next week).

Considering that Nintendo’s Wii, with its much broader audience, has been the biggest competition for Microsoft in the console wars, it is not surprising that they would attempt to do this. According to Kim, it never pays to bash Nintendo, because while they have been producing things that some might say “aren’t games,” there are those that are making them that say “I don’t care, I’m selling a whole bunch of that stuff.”

Just look at the sales for the Wii: Unlike the Xbox or the Playstation III, Nintendo has pulled in the much broader casual crowd as well as a number of the hardcore players. With titles such as Wii Fit, the console has begun evolving beyond just games and is becoming a vessel of interactive entertainment, which is something that the industry needs to grow, and something Kim wants for Xbox. The variety of fun and interactive elements seen in the recent wave of game titles has bridged a great gap between the gamer and the non-gamer and has been led by Nintendo for some time. Kim and Microsoft hope to follow suit and trump this with the new Xbox Live.

In this day in age, nothing is immune from the effects of the economy; not even games, and as such, companies must expand beyond what they know in order to forge a lucrative path forward. “I believe to be the leader in interactive entertainment, we have to expand well beyond gaming,” says Kim. Of course, this doesn’t mean that games will start playing second fiddle. The industry is a billion dollar a year industry, but with the expansion of Xbox Live’s capabilities, Microsoft feels comfortable with where their console is, and where it is going.

[via VentureBeat]