Why is Microsoft Fussed Over Live?

Justin Buser · 02-01-2006, 03:49 AM

Quote:

Online Focus

Even before the launch of the Xbox 360, Microsoft was the most aggressive of the console makers in championing online gaming. More than 150 games for its original Xbox, launched in 2001, allow gamers to play against each other online as long as users pay the Xbox Live subscription fee.

The appeal of online play is that users can quickly find human competitors -- whether they're friends or strangers -- without having to gather in someone's living room. For instance, a user wanting to find a competitor in Electronic Arts Inc.'s Madden football game late at night easily can log on to Xbox Live and find a foe within seconds. Each player would coach a virtual team in the same game.

More than two million users of the original Xbox have subscribed to Xbox Live, or about 10% of the customer base. Adoption has been "much faster than expected," said Aaron Greenberg, Microsoft's group marketing manager for Xbox Live, who declined to say whether the service is profitable. With the Xbox 360, Microsoft hopes to persuade 50% of users to hook up to the Internet, he said.

One of Microsoft's strategies to garner more online users is to make it easier to sign up. Unlike with the original Xbox, users of the Xbox 360 don't have to buy a special online kit at a store. If they get the $400, premium version of the new console -- or pay for extra memory for the $300 core model -- they get a free subscription to a service called Xbox Live Silver. It lets players buy and download certain games and send text or voice messages to other users. If they want to compete against others online, they must upgrade to the pay service, known as Xbox Live Gold.

Users pick a nickname -- called a "gamertag" -- that identifies who they are in any game they play on the Xbox 360. This makes it easier for other users to find them and communicate, and it allows Microsoft to offer features in the Gold service such as a tool that assigns a rating to players and pairs them with competitors of similar skill levels.

High Stakes

Mr. Goodman, the Yankee Group analyst, estimates that Microsoft spent more than $200 million just to develop Xbox Live. Mr. Pachter, of Wedbush Morgan, estimates the company has spent more than $1 billion total on the service, including marketing costs. Microsoft won't disclose the cost, though Mr. Greenberg said it has made "a huge investment" in Xbox Live. Microsoft pledged in 2002 to spend $2 billion over five years to beef up its Xbox business, including the development of Xbox Live and the Xbox 360.

The Xbox Live service is part of an entertainment division which includes the Xbox console, as well as PC games and interactive TV products. The division reported an operating loss of $391 million on $3.24 billion in revenue for the fiscal year ended June 30, 2005. Microsoft expects a wider loss for the current fiscal year, because of costs associated with the Xbox 360's launch.

Microsoft's ability to convince more users to pay for the online service will play a key role in the Xbox's profitability. While online gaming is growing in popularity – U.S. revenue is expected to climb to $1.6 billion next year from $1.1 billion this year, according to Dallas research firm Park Associates -- the concept remains unfamiliar to many users of console machines like the Xbox. And while many of the most popular PC games incorporate online play, such features are often included for free. An exception is multiplayer PC games designed for thousands of players, in which publishers typically charge a monthly subscription fee of about $15.

Microsoft could attract a higher percentage of online users for the Xbox 360 than it has with the original Xbox, industry analysts said, in part because the company has positioned the console to be a one-stop digital entertainment center, allowing users to download and play movies and music and view digital photos. But some analysts said they were skeptical that interest among gamers in playing online is strong enough for Microsoft to meet its goal of getting half of Xbox 360 users to use the online service. "The market for online gaming for Xbox is maybe 20%" of users, Mr. Pachter said.

One strategy Microsoft is using to expand its audience is Xbox Live Arcade, a service geared to more casual gamers that features games that are faster to learn, and don't take as long to play. It lets users download arcade-style games for free and test them for a few days -- or for a few levels of the game. If they like a game, users pay between $5 and $15 to keep it. Multiplayer titles include Gauntlet and Joust, popular games from the 1980s.

The company also will allow players to buy add-on content for games, such as special characters and weapons, and Microsoft will share the revenue with publishers. The move could help push more publishers to make online-compatible games for the Xbox 360.

Link

camwilson04 · 27-01-2006, 03:58 AM

kool i cant wait till go on xbox live

AIR MCNAIR 9 · 27-01-2006, 09:13 AM

Of all the people i know that have Playstations, none of them have ever used the online service. I have heard that it is not as friendly as XBL.

DimitriC2982 · 28-01-2006, 12:53 PM

yeah playstation online sucks badly

Glowin Smurff · 28-01-2006, 02:18 PM

yeah and the fact that 56k can connect make it blow even more (damn lag demons)

MH_prophet · 28-01-2006, 05:14 PM

Playstation's service isn't unified, meaning you have a different username and varying subscription fees for each seperate game.

busboy33 · 29-01-2006, 12:27 PM

Plus, since its not a unified service, feedback and avoiding jackholes is even more difficult.

360rulz · 31-01-2006, 12:55 AM

most playstation fanboys think online is useless. an actual quote is "oh online crap you dont need that"

andreiDsurgeon · 03-02-2006, 02:27 PM

ps3 will have one now bahahaha... i hope its better than live coz so we will have better competition. competition is good.

Xtrm Liability · 03-02-2006, 03:17 PM

Yes, unified makes all the difference in the world.

covert_storm · 28-03-2006, 01:20 PM

It's BS that Microsoft make's you pay for online service, Playstation doesn't and already said they won't for PS3, Nintendo said they're going to have a online service and they arn't going to make people pay, so why the hell is Microsoft making us pay for something thats should be free. I already pay for internet service, I payed $400. for an Xbox, and I pay $60. for the games. So as far as LIVE or other Online services go, I give full props to PS and Nintendo. Sorry I hate paying for the same thing twice.

Ohira34 · 28-03-2006, 01:26 PM

well if you bought the 400 box then you got a free year of live so stop complaining.

Don_Rico · 28-03-2006, 01:28 PM

Quote:

Originally Posted by covert_storm

It's BS that Microsoft make's you pay for online service, Playstation doesn't and already said they won't for PS3, Nintendo said they're going to have a online service and they arn't going to make people pay, so why the hell is Microsoft making us pay for something thats should be free. I already pay for internet service, I payed $400. for an Xbox, and I pay $60. for the games. So as far as LIVE or other Online services go, I give full props to PS and Nintendo. Sorry I hate paying for the same thing twice.

If you're talking to your Playstation about the PS3, or anything else, you should go consult a doctor.

Ohira34 · 28-03-2006, 01:29 PM

good one rico..i should have caught that. damn

FlaskyMcNasty · 28-03-2006, 01:32 PM

I do not think that it is bs to have to pay for a subscription to an online service. It is a service, and what actual service can you get for free? Thats like saying you think it is BS to have to pay for a subscription to AAA. Microsoft spends money on Xbox live, to develop the software, host servers, create patches and to moniter our feedback and such. Playstation2's online is free yes, but do they have downloadable content? And a friendly user interface? Hmm... No I do not think so. I have many qualms about Microsoft, but having to pay for XBL is not one of them.

Ohira34 · 28-03-2006, 01:34 PM

yeah for sure flasky I concur... ms does a lot. my only gripe is I want more oh well...

Don_Rico · 28-03-2006, 01:37 PM

Quote:

Originally Posted by Ohira34

good one rico..i should have caught that. damn

Oh well, you still have the best avatar

Ohira34 · 28-03-2006, 01:41 PM

true...true.

Grindstone · 28-03-2006, 02:36 PM

Quote:

Originally Posted by covert_storm

It's BS that Microsoft make's you pay for online service, Playstation doesn't and already said they won't for PS3, Nintendo said they're going to have a online service and they arn't going to make people pay, so why the hell is Microsoft making us pay for something thats should be free. I already pay for internet service, I payed $400. for an Xbox, and I pay $60. for the games. So as far as LIVE or other Online services go, I give full props to PS and Nintendo. Sorry I hate paying for the same thing twice.

Best you wait until the PS3 launch and subsequent online service before you start making claims. True, Sony has said some things will be free on the "HUB" system, but we do not know how much you get with that free, or if 3rd party developers will get to charge some sort of premium. For example, Sony may have a free online system, but so does MSoft. PS3 may allow you to play some 1st party games for free, but 3rd party games can charge you for using Sony's online HUB system.

As for Nintendo, you have nothing to claim as you know very little. Thus far, it appears that RARE games will not be part of that downloadable content as they are owned by MSoft now. Some games, such as Donkey Kong, still will be. I bet some games are offered as free, just to garner interest, but some will be by purchase (and why not make an extra buck or two?).

covert_storm · 28-03-2006, 06:27 PM

?!?!?! So much hate from everyone. I was just saying Playstation & Nintendo claim they will have a similar Online service, and they also claim it will be free. Maybe you're all right and it will have a free service and a pay service, I dont know. And some of you need to calm down, if anyone mentions PS3 you freak out. Maybe it will be better than Xbox, who know until it come out. I'll buy it anyway and I'll buy the Revolution, a lot of people do, this dosn't mean I'm not going to play 360 anymore, I just like variety.