MCV was recently invited to have lunch with Microsoft's Pip Marlow, General Manager, and David McLean, Consumer Channels Group Director at it's Sydney Kinect event.
The pair discussed at length Microsoft's thoughts about the strengths and weaknesses of Xbox, the importance of Kinect, media services on home consoles and core content for consumers.
Netflix is a huge part of the Xbox user experience in the US, with 25% of those on Xbox LIVE using it, and conversely 40% of Netflix users accessing it through Xbox LIVE. While Microsoft looks forward to continuing to push streaming TV and movie services (having recently added SBS and ABC streaming to its ranks), Netflix is still waiting for legal clearance for Australian-specific broadcast rights.
The services being ranged, however, are not set to expand into browser territory. McLean explains: “You can't control it. Xbox LIVE is currently a rich, controlled environment which creates a fair experience for everyone. Browsers would take you outside that environment.”
These and other additional services are part of the overall Xbox LIVE experience, which apparently has a stronger tie to the hardcore audience in Australia than it does in other territories, hovering at around 40-50% of devices connected for the last few years.
Microsoft sees its services as competing with other forms of entertainment, rather than directly with its competitors. The Zune Music Pass was announced at the event for Australia, and McLean and Marlow believe it competes with people's general entertainment budget and the amount of time they have, alongside brick and mortar video-rental facilities, rather than going up against competing services on other consoles.
This is likely an apt distinction considering the typical household with a single home-console will be making their choice between using the service or not, rather than using the service vs a competing one.
Microsoft are also creating a dedicated Windows Phone team to support the development of indie games for the platform, and are looking to unify their devices with an unique ID moving forward. Their support of developers continues to be strong, with the release of the Kinect SDK proving to create quite unique applications for the device in fields outside of gaming.
McLean continues: “The best Kinect has to offer will not come from Microsoft.”
The opening up of the Microsoft development community and process on both platforms is designed to push what Marlow still sees as Microsoft's strong point: content.
McLean asserts: “Halo made us. We still have a stronger relationship with our hardcore audience than anyone else.” He points to the exclusive episodes of Grand Theft Auto IV as still being exactly the kind of thing Microsoft wants to shoot for.
The retail experience is still a vital part of Microsoft's strategy, even for online content purchasing. McLean says that the experience the consumer has going into retail and speaking to someone who is like a trusted adviser is “part of the theatre” of buying games, and isn't going away any time soon.
While the core audience remains a strong part of Microsoft's strategy, McLean and Marlow say that they're still fighting the good fight of trying to have department stores move their console out of the gaming section and into lifestyle technologies for the home where it belongs.
As home consoles and set-top boxes become less distinct, Microsoft wants this final step of normalising gaming to take place at retail and really drive home to the consumer the role the gaming console should play in the home.
To register for the MCV Pacific News Digest, head to the registration page: http://www.mcvpacific.com/user/index/register/journey/register