Next Xbox will still play games sometimes
I can't be the only one concerned with Microsoft's trend towards providing an entertainment console over a gaming console. With a series of moves and announcements, it appears more and more likely that Microsoft's next-gen console will put an emphasis on providing interactive television and live events. And what happens to gaming? It is doomed to become the forgotten mistress.
A combination of Kinect functionality, voice command, the hiring of Nancy Tellem and an emphasis on entertainment apps are the backings for this new approach. Unfortunately, I can't see an outcome that doesn't affect the current gaming landscape of the Xbox. Let's look at what we know to be fact.
At D: Dive Into Media, Yusuf Mehdi and Nancy Tellem provided insight into the future plans of Microsoft entertainment, but without giving away any details on the next Xbox console. Yusuf Mehdi is the Senior Vice President of Interactive Entertainment Business for Microsoft, specifically for the Xbox. Equally as important in this equation, if not more, is Nancy Tellem. Tellem was brought in by Microsoft and appointed her the Entertainment and Digital Media President. She'll mainly be spreading her vision for entertainment onto the Xbox. And boy, what a vision that is.
Tellem was President of CBS Network Television Entertainment Group before Microsoft lured her away. Now, Tellem and Mehdi plan to push the entertainment side of the Xbox. Their plan is to offer original content through the new Los Angeles-based Xbox Entertainment Studios, tons of new voice-controlled customized TV and entertainment apps, partnerships with content creators and networks, and interactive programs.
Speaking at D: Dive Into Media, Mehdi and Tellem used statistics and numbers to justify their expansion into entertainment. Mehdi said that the Xbox 360 has over 75 million consoles worldwide, with 40 million Xbox LIVE customers. These users average 87 hours a month on their Xbox, for either gaming or entertainment. As of last March, most of that is now on entertainment, which makes sense considering they have over 100 media partners -- HBO and Netflix included. Of course, this includes watching movies, TV shows, interactive programs, fitness, sports and education. In 2012 alone, 18 billion hours of entertainment were viewed on the Xbox, but most of that was primarily video. Some of this is contributed to the Xbox user-base. What started as male-centric has evolved into 38 percent of Xbox users being women, and 51 percent of Xbox users having kids.
Tellem said, "We know right now obviously as a gaming console, our focuses are transitioning to an entertainment device. We have thousands of movies, sports events, live events -- but we also know we're looking at males 18-34, there's women as well, so the idea is to start and focus with our core audience and kind of expand from there."
It's easy for Tellem and Mehdi to see the numbers and think that entertainment needs to be on the forefront. Hell, it's smart business to follow trends in hopes to have as successful a product as you can. That's why the duo essentially pledged that Microsoft will launch 40 new voice-controlled customized TV and entertainment apps on the Xbox. They'll continue partnering with content creators, networks, aggregators, advertisers and MVPDs (multi-channel video programming distributors, like Comcast, DirecTV and AT&T Uverse) to change the future of TV and entertainment. They believe that viewers want to do more with the entertainment they view; basically, this is where interactivity comes into play.
Tellem said that synchronized, second-screen experiences are going to provide a deeper understanding of stories, like for Game of Thrones. She also stated that "interactivity is the natural extension of what we do. It's kind of a multitasking existence and I think it extends into entertainment as well." I don't know about you, but while I'm watching Game of Thrones, I don't want to have to look away from the screen or stop paying full attention to it. I doubt any Game of Thrones fan wants to interrupt the show for the sake of interaction. I'd say SmartGlass and Kinect have a ton to do with this interactive initiative.
SmartGlass is a companion app for the Xbox 360. It was announced at last year's E3, and will most likely have a ton more information announced about its future at this year's E3. Basically, it's the beginning of interactive entertainment, allowing your mobile devices to serve as a second screen or remote controller. Right now, a game like Halo 4 uses SmartGlass to show you more stats. In the future, it sounds like navigating and interacting with entertainment will be its primary use.
In particular, Tellem has said that their TV programming will be more interactive by having more live events; awards shows where you share what you're viewing with your friends and watch it together for a real-time experience; Sesame Street with interactive experiences using Kinect technology; and being able to talk with your friends while you watch, no matter where you're located.
We have already seen the first steps of this with Kinect Sesame Street TV. Dubbed a "2-way TV experience for the Xbox 360 with Kinect," this is obviously what Tellem has in mind. Kinect Sesame Street TV are actual episodes of Sesame Street that have interactive elements to them. Instead of watching Grover count coconuts, a child will be asked to throw the coconuts to Grover so he can count them. Doing a quick throwing motion, you'll see a coconut fly into Grover's arms on-screen. You can also shout at the Kinect for voice command, like to take a snapshot of an item you're supposed to help Elmo find. It's not as much of a game as it is a TV experience.
One thing Tellem did say is that interactivity will be organic to any scripted story; it will never be forced. If the future of the Xbox is offering entertainment with Kinect integration, be it forced or not, the Xbox will ultimately fail. Microsoft is over-estimating how much people want to interact with the programs they watch. The most I do while watching something is send out a quick tweet or text, or check Facebook. I find it hard to believe that there's a large group of Xbox users yearning to use their mobile devices to get the whole story or experience, or use voice and Kinect integration to further the progress of a show.
Furthermore, while I'm a firm believer that cable and satellite companies need to adopt with technological advances, this wasn't what I had in mind. With Netflix, Hulu and being able to watch pretty much any show online, I was expecting traditional MVPDs, studios, and creators to provide an a la carte service that allows viewers to customize what they want to see. This is just a different way to access what you're already paying for.
That brings us to pricing. There's no way that all of this is going to be available for the current Xbox LIVE price of $60 a year, or $10 a month. Microsoft is currently avoiding being a paid TV provider. They see more value in adding interactivity than being another distributor. Here's the scary part of the interview from Dive Into Media: when Mehdi was asked if the Xbox LIVE membership will be part of this package, Mehdi responded, "We haven't decided how we're going to package things, but yea, I think you should assume some of that."
This question was asked for further clarification: "If I wanna watch the shows, I shouldn't need to pay extra on top of what I'm already paying for Xbox?" After an awkward silence, Tellem responded, "I think we're really looking closely how best to present it." As of now, most of the entertainment apps on Xbox LIVE require a subscription to LIVE in addition to a contract with a provider like DirecTV, Uverse, Comcast, or Verizon FIOS. To access Netflix, Hulu Plus, Amazon Instant Video or HBO GO, you'll need subscriptions to those on top of what you already pay for LIVE. There's no way that is going to change, even if Sony continues offering apps like this for free. My money is on an added cost for this new emphasis on interactive versions of the programs you like to watch.
Mehdi has stated that the Xbox charges for its online experience because it's the best that their is. Beyond a PC, it was believed that the Xbox 360 was the number one way to watch Netflix. That was until Netflix put out a release that said the PS3 was the best way to watch it. It comes down to the PS3 letting you access the Netflix app (provided you have an account) for free, while you need an Xbox LIVE membership to use Netflix on the 360. How do you argue with that? By saying that the PS3 isn't as great of an entertainment device as the Xbox -- everyone knows that. At least, that's what Mehdi said. The only reason that the Xbox 360's Netflix numbers are lower than the PS3's is because the 360 has more entertainment options. And those options are going to expand in 2013.
Tellem has plan to create original content for Xbox users with Xbox Entertainment Studios. In a brief interview with Hollywood Reporter, Tellem said that original programming gives them an opportunity to brand the Xbox. "Looking at the technology the Xbox console provides, we are really a bit ahead of the more traditional media companies in having the ability to develop and produce interactive content." The content figures to be in all sorts of forms for every member of the family. It will cover live events, reality, game shows, documentaries and scripted comedy or drama. As of now, there's a plan in place for a very robust content production schedule. And while she won't name any names, a lot of actors, directors and studios are excited for the opportunity to produce custom content and interactive shows.
While no one is asking for interactive TV, Tellem thinks Microsoft and Xbox are in a unique position for it to take off. "The technology is there, not only for the audience that just wants to watch passively, but also for those who want to engage the content more, whether by mobile, tablet or on TV."
Microsoft is throwing all of its eggs into the interactive entertainment basket. The thing is, outside of some dancing games, no one is begging for more Kinect and voice integration. What started as a gaming console with entertainment options has turned into an entertainment console that can play games. I hate -- and I know hate is a strong word -- the fact that there is an emphasis on TV and live entertainment that you can interact with, while gaming goes unnoticed. All we hear about is SmartGlass this and Kinect that. It's like Microsoft thinks they can completely ignore the gaming side of it, just release a Halo and Call of Duty every year, and people will buy it.
Here's your problem Microsoft: the niche crowd of people interested in interactive programming are the only ones that will find this feature exciting. Even then, how likely are they to drop $400 or more on a box that allows them the opportunity to interact the way you're describing? The main consumer of your next Xbox will be gamers. Custom programming and more entertainment apps should be nice features on a gaming console. Instead, gaming will be a nice little feature on your entertainment console. You're missing the mark on what your audience wants.
I don't need your $60/year service to watch more Netflix when I can just have a Netflix subscription and a $0/year cost for a Roku. I don't need to pay more for your Xbox LIVE subscription to view entertainment I already get with a cable service provider -- especially when I can get virtually everything on the internet. I'm not buying what you're selling. Come time to release your next console, if this is your plan, I don't think many others will be buying it either.