Xbox’s Future Is Lots Of New Ads, Entertainment Apps, And A Few Games

Microsoft released a press release yesterday to brag a bit about the Xbox 360’s hardware sales, and to talk about their future plans for their Interactive Entertainment Business. The company has never hid the fact that they want their video game console to be the center of “entertainment” in the living room, however, it is clear now that gaming is no longer their focus and has been relegated to “oh, it can do that too” status.

Bolstered by a reported 57% year-over-year increase in Xbox Live non-gaming “entertainment app” usage, Microsoft Interactive Entertainment vice president Yusuf Mehdi almost disregards the Xbox’s gaming history, saying:

“Yes, we started with video games, but we have been on a journey to make Xbox the center of every household’s entertainment,”

“We believe that Xbox is being used by more people in the household, during more hours in the day and for more forms of entertainment. People are using Xbox in the morning to work out with the Kinect Nike+ Fitness program, kids are watching cartoons, families are enjoying movies, and of course people are playing blockbuster games like ‘Halo 4.’”

Probably the most frightening part of this “entertainment” focus are some of the “new business models” that Microsoft is excited about expanding, most notably the NUads that first appeared as polls during the 2012 presidential election.

Nancy Tellem, the president of entertainment and digital media at Microsoft, is extremely excited about the future use of NUads, saying “When I worked in traditional TV, we would find ourselves saying things like ‘Wouldn’t it be cool if we could add an interactive aspect directly into the show and engage directly with the viewers?’ With Xbox, that is possible today.”

Mehdi echoed her sentiment on NUads, explaining that the new ad format combined with “Kinect and natural user interface” is an “important moment for TV advertising”. He then added that with NUads, “passive TV advertising is transformed into engaging and actionable experiences.”

Basically, we are going to be seeing a lot more of it on both the Xbox 360 Dashboard and its upcoming next-generation successor.

I’m not at all against the addition of non-gaming “entertainment apps” running on my gaming consoles. In fact, I’m actually extremely fond of streaming/downloading movies and TV shows — although, I do prefer to do that on anything but the Xbox 360, where it is not locked behind the cost of an Xbox Live Gold subscription. With that said, I can’t help but feel that Microsoft is setting itself up for a huge blow during the next console cycle.

Gamers may use the other features of Microsoft’s console, but they are paying that Xbox Live Gold subscription mainly because they want to play with their friends online — after all, there are far cheaper ways to stream entertainment content to your TV if that is your main goal. If the future of Xbox truly moves gaming to the backseat Microsoft will likely lose its base at some point.

Xbox started as a video game console, that is its foundation. Microsoft can remodel and make additions that expand on that foundation in interesting ways and everything will be just fine, possibly even better. However, if you neglect that gaming foundation — or start knocking out the support beams with new “engaging” NUads — it won’t be too long before the entire thing comes crashing down. Especially when your business model is based on charging your customers an additional fee to access the same subscription services that a whole host of other devices can access for free.