Microsoft has a pretty interesting post on their official blog yesterday about the Xbox 360. It’s been pretty clear in the past few years that the console is an extremely important part of the company as a whole, but until recently it had seemed that the Xbox was still about gaming first and foremost. Other features of the Xbox experience like the Netflix app were great, but definitely a secondary priority of the overall focus.
According to Microsoft, 40% of all activity on the Xbox 360 is non-gaming activity. That means that users spend close to half the time on the console watching streaming video. The Netflix application, ESPN streaming, and newly introduced Hulu partnership make up a dominating trio when it comes to usage. Not to mention that users can stream movies and music through Zune.
Over 30 hours per month per Xbox is spent consuming video. That’s about an hour a day. When you think about the fact that there are over 53 million Xbox owners, 30 million of which are Xbox live members, that totals out to a lot of streaming video.
Sure, this means that 60% of use on the 360 is still gaming, but a substantial chunk has been replaced by other activities. This makes Microsoft’s console not just a video game system, but a real entertainment hub. While the PlayStation Network is doing everything but work for the last few weeks, Microsoft is reporting growth in their entertainment division that is simply astonishing.
In April, when Microsoft reported their Q3 earnings, the Xbox 360 and Kinect emerged as the stars of the report.
All of their divisions grew (Business 21% year-over-year, Server & Tools 11%, Online Services 14%). But their entertainment division grew 60%, fueled by Xbox console and Live subscription sales, as well as Kinect sales.
Frank Shaw, Microsoft’s VP of Corporate Communications says that “simply, Xbox = entertainment” in the blog post. And then he hints about the future of how Xbox will be marketed:
The vision for Xbox is straightforward: All of the entertainment you want. With the people you care about. Made easy. That is why you’ve seen us invest in partnerships with ESPN, Netflix and Hulu. That is why we’ve baked social directly into the experience with Xbox LIVE – connecting gamers, friends and families across the globe. That is why you’ll see Xbox marketed more as an entertainment brand this year.
Will the Xbox console, both the 360 and any future versions ever be less about gaming than other entertainment? It’s possible. Microsoft seems to know that it got into everyone’s homes with gaming on the Xbox, and that it can use that established position to develop a full on entertainment brand. Their recent acquisition of Skype may be further evidence of the changing landscape of the Xbox gaming console.
