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Thursday, December 01, 2005 

Gaming's Online Ventures

According to a new report from videogame tracking firm DFC Intelligence, Microsoft's Xbox 360 and its Xbox Live features foreshadow the future of interactive entertainment.

David Cole, president of DFC Intelligence, believes that the Xbox 360 had one of the most well-rounded launch lineups ever, but that is not what will matter two years from now.

"In the long term, the digital distribution features in the new Xbox Live service, especially the Live Marketplace, should end up having a much larger impact on the future of gaming than any individual launch title," said Cole. "Ultimately, Live Marketplace aims to provide a new paradigm of paying for and receiving content."

Microsoft's open market, which allows publishers, developers and gamers to buy and sell content freely in an open virtual market place. This digital distribution model, which currently focuses on games and game content, will eventually expand to traditional entertainment like movies, TV shows and music. It will also open up new opportuninities for game developers to create original episodic games and bypass both publishers and retailers.

"The basic concept is not a revolution by any stretch of the imagination," said Cole, who noted that iTunes has been making a go at digital distribution for some time. "Casual games, like those offered on the Marketplace, have been offered in downloadable form for years. What makes the Microsoft offering different is the integration between the various components of the package to form a platform for digitally distributed content: microtransaction ecosystem, hardware, and digital distribution delivery network."

Cole believes that Xbox Live has come the closest to approximating what mass market online gaming will look like in the future. Xbox Live "is simple, fairly clean, and allows richer media interaction than most computer online games through the extensive use of headsets. It is easily the most successful cohesive online gaming service ever offered on a console," said Cole.

Powering the Xbox Live Marketplace is a new prepaid "Points" card system, which are available at retail locations or online via a credit card. These card allows non-credit card holders to partake in the download community. A $20 card gets you 1,600 points, which can be used to buy games, pictures, logos, screen savers and other items for your Xbox Live Dashboard. Casual games currently range from $5 to $15. There are also free downloadable trailers, demos and music videos.

"In North America, the challenge has been building a microtransaction system to handle payments under $5," said Cole. "To some extent, Xbox Live Marketplace overcomes some of that challenge. If Microsoft is successful is gaining traction with its payment platform, it could really change the way people think about purchasing game, add-on, and other content. Instead of buying games in large $50 chunks, other types of purchase options become available."

Anyone who has played online games on Xbox or Xbox 360, compared to PlayStation 2, will see an immediate difference. Microsoft has invested millions of dollars in its Xbox Live, and the fruits of that labor are already evident through the service. The new Live Marketplace and 360 hardware open up new opportunities for gamers and game creators to interact in a safe system. The opportunities for interactive and traditional entertainment on Xbox Live are endless. And with each new console, Microsoft can continue to build on its stellar online system. Xbox Live and its Marketplace will flourish as the future of gaming expands beyond retail and into digitally distributed model.

"What remains to be seen is whether the next generation of consoles will be used not just for online play, but also for digital distribution and payment," said Cole. "If one or more of the three consoles can unite those three components in a user-friendly and compelling package, we might be looking at a very different interactive entertainment industry value-chain by the time the next next-gen consoles roll around."">Inside Video Games - BLOG: "Gaming's Online Ventures

Xbox_2According to a new report from videogame tracking firm DFC Intelligence, Microsoft's Xbox 360 and its Xbox Live features foreshadow the future of interactive entertainment.

David Cole, president of DFC Intelligence, believes that the Xbox 360 had one of the most well-rounded launch lineups ever, but that is not what will matter two years from now.

'In the long term, the digital distribution features in the new Xbox Live service, especially the Live Marketplace, should end up having a much larger impact on the future of gaming than any individual launch title,' said Cole. 'Ultimately, Live Marketplace aims to provide a new paradigm of paying for and receiving content.'

Microsoft's open market, which allows publishers, developers and gamers to buy and sell content freely in an open virtual market place. This digital distribution model, which currently focuses on games and game content, will eventually expand to traditional entertainment like movies, TV shows and music. It will also open up new opportuninities for game developers to create original episodic games and bypass both publishers and retailers.

'The basic concept is not a revolution by any stretch of the imagination,' said Cole, who noted that iTunes has been making a go at digital distribution for some time. 'Casual games, like those offered on the Marketplace, have been offered in downloadable form for years. What makes the Microsoft offering different is the integration between the various components of the package to form a platform for digitally distributed content: microtransaction ecosystem, hardware, and digital distribution delivery network.'

Cole believes that Xbox Live has come the closest to approximating what mass market online gaming will look like in the future. Xbox Live 'is simple, fairly clean, and allows richer media interaction than most computer online games through the extensive use of headsets. It is easily the most successful cohesive online gaming service ever offered on a console,' said Cole.

Powering the Xbox Live Marketplace is a new prepaid 'Points' card system, which are available at retail locations or online via a credit card. These card allows non-credit card holders to partake in the download community. A $20 card gets you 1,600 points, which can be used to buy games, pictures, logos, screen savers and other items for your Xbox Live Dashboard. Casual games currently range from $5 to $15. There are also free downloadable trailers, demos and music videos.

'In North America, the challenge has been building a microtransaction system to handle payments under $5,' said Cole. 'To some extent, Xbox Live Marketplace overcomes some of that challenge. If Microsoft is successful is gaining traction with its payment platform, it could really change the way people think about purchasing game, add-on, and other content. Instead of buying games in large $50 chunks, other types of purchase options become available.'

Anyone who has played online games on Xbox or Xbox 360, compared to PlayStation 2, will see an immediate difference. Microsoft has invested millions of dollars in its Xbox Live, and the fruits of that labor are already evident through the service. The new Live Marketplace and 360 hardware open up new opportunities for gamers and game creators to interact in a safe system. The opportunities for interactive and traditional entertainment on Xbox Live are endless. And with each new console, Microsoft can continue to build on its stellar online system. Xbox Live and its Marketplace will flourish as the future of gaming expands beyond retail and into digitally distributed model.

'What remains to be seen is whether the next generation of consoles will be used not just for online play, but also for digital distribution and payment,' said Cole. 'If one or more of the three consoles can unite those three components in a user-friendly and compelling package, we might be looking at a very different interactive entertainment industry value-chain by the time the next next-gen consoles roll around.'"