Gleaned from a Microsoft Product Manager’s LinkedIn profile comes the news that far from feeling the heat of Sony’s free PSN model, Microsoft will be rolling out additional measures aimed at bringing Xbox Live revenue up to an even billion. Details on the new strategy are not mentioned, but a Holiday 2012 rollout seems likely.
Microsoft’s Praveen Rutnam claims to have developed a strategy to “further monetize Xbox LIVE subscriber base that will be implemented for holiday 2012.” However, despite gamers closely associating Xbox Live with multiplayer games, it’s likely the new strategy will be targeted more at enhancing revenue from Microsoft’s push into living room entertainment content like music and movies.
Expanding Xbox Live Beyond Gaming
The Xbox Live service has long been synonymous with online multiplayer gaming, offering gamers the ability to connect and compete with friends and strangers alike. However, in recent years, Microsoft has been steadily expanding the scope of Xbox Live to include a broader range of entertainment options. This shift is evident in the addition of various apps and services that allow users to stream music, watch movies, and even access television content directly through their Xbox consoles.
By focusing on these additional entertainment options, Microsoft aims to create a more comprehensive living room experience. This strategy not only caters to gamers but also appeals to a wider audience who may not be as interested in gaming but still seek a centralized hub for their entertainment needs. For instance, services like Netflix, Hulu, and Spotify have become integral parts of the Xbox Live ecosystem, providing users with a diverse array of content to enjoy.
Potential Revenue Streams
One of the key aspects of Microsoft’s new strategy is likely to involve leveraging these entertainment services to generate additional revenue. This could be achieved through various means, such as offering premium subscriptions, exclusive content, or even ad-supported free tiers. For example, Microsoft could introduce a tiered subscription model where users pay a higher fee for access to exclusive movies, early releases, or ad-free streaming.
Another potential revenue stream could come from partnerships with content providers. By collaborating with major studios, music labels, and television networks, Microsoft could secure exclusive content deals that would attract more subscribers to Xbox Live. This approach not only enhances the value proposition for users but also creates new opportunities for revenue sharing with content partners.
Moreover, Microsoft could explore the integration of microtransactions within entertainment apps. Similar to in-game purchases, users could buy or rent individual movies, episodes, or albums directly through the Xbox Live platform. This pay-per-view model would provide an additional layer of monetization while giving users the flexibility to choose the content they want to consume.
Enhancing User Engagement
To ensure the success of this expanded strategy, Microsoft will need to focus on enhancing user engagement. This could involve improving the user interface and overall experience of the Xbox Live platform, making it easier for users to discover and access the content they want. Personalized recommendations, curated playlists, and seamless integration with other devices could all contribute to a more engaging and user-friendly experience.
Additionally, Microsoft could introduce social features that allow users to share their favorite content with friends, create watch parties, or even participate in live events. These social elements would not only foster a sense of community but also encourage users to spend more time on the platform, thereby increasing the likelihood of monetization.
In conclusion, Microsoft’s strategy to further monetize the Xbox Live subscriber base is likely to focus on expanding the platform’s entertainment offerings and creating new revenue streams through premium subscriptions, exclusive content, and microtransactions. By enhancing user engagement and leveraging partnerships with content providers, Microsoft aims to transform Xbox Live into a comprehensive entertainment hub that appeals to a broader audience. As the Holiday 2012 rollout approaches, it will be interesting to see how these new measures are implemented and how they impact the overall Xbox Live experience.
Source LinkedIn
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