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XBox (Games) Advertising Businesses Microsoft The Almighty Buck Games

The Ugly, Profitable Details About Xbox Live Advertising 204

An anonymous reader writes "In an editorial at Penny Arcade, Ben Kuchera writes about how Microsoft's subscription-based Xbox Live platform has become an advertising cash cow — to the detriment of users who already pay for the service. Quoting: 'People who don't play video games would be forgiven if they turned on an Xbox 360 and didn't realize it was a device used to primarily play games. The first screen you see on the Xbox 360 Dashboard is often a mixture of ads for all sorts of goods and services, and many times games are in the minority of ad slots. The latest redesign increased the ad space that can be sold to advertisers, and that in turn increased this problem. Let's be clear, it is a problem. Game discovery is terrible in the current design of Xbox Live, and the usability of a system that used to be about games is suffering in order for Microsoft to make money on ads. Sadly, this issue isn't going away: Ad sales simply bring in too much money to ignore, and revenue is growing. ... I contacted Microsoft and asked how much advertising revenue impacted the profitability of the Xbox 360. "We don't share this information publicly but we can tell you that, since 2010, the advertising business has grown 142%," I was told.'"
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The Ugly, Profitable Details About Xbox Live Advertising

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  • So, basically ... (Score:4, Insightful)

    by Anonymous Coward on Friday July 13, 2012 @04:36PM (#40643121)

    With Xbox Live you pay to receive ads. With PSN, you don't pay a dime and still get online gaming.

    While I'm acting smug as a PS3 owner, who doesn't have to put up with Microsoft's bullshit, I have to wonder just how much longer Sony's offering will last.

  • by jeffy210 ( 214759 ) on Friday July 13, 2012 @04:41PM (#40643177)

    So what is exactly is suffering for gaming? Has the hardware been gimped? Can you not just pop a game in and play it? The XBox is being slotted as a media platform, not just a gaming platform and it seems to be doing that rather well, just look at the sales. Just because it's not the uber-hardcore gaming machine you're expecting does not make it bad. If you really want that go build a PC. But as long as it plays games and you still have access to game content, all while providing additional entertainment and media options, I fail to see the issue.

    To be honest, I use mine mainly for Netflix and other media related options. Occasionally I do play a game, so it fits perfectly for me. It's no longer just a "gaming console".

  • by hbean ( 144582 ) on Friday July 13, 2012 @04:48PM (#40643261)
    Lots of people pay for cable, and there's a ton of ads on it. Just saying.
  • by Rijnzael ( 1294596 ) on Friday July 13, 2012 @04:52PM (#40643305)
    I doubt Sony is going to see what Microsoft is doing as anything other than a precedent and road map for future endeavors. The only reason PSN is free is because they wanted to overcome the shocking price of the initial PS3 models and wanted to take a chunk out of Xbox Live's market share. Xbox Live is profitable, PSN is not. If PSN ever reaches comfortable profitability, you can bet they'll be doing exactly what Microsoft is. They're just as much about screwing the customer as any other company (anti-piracy rootkits anyone?).
  • by Anonymous Coward on Friday July 13, 2012 @04:53PM (#40643329)
    One must wonder how many IEDs and AK47s the PSN network has bought for terrorists. Those stolen credit cards are probably used for nasty things.
  • Overstated (Score:2, Insightful)

    by kamapuaa ( 555446 ) on Friday July 13, 2012 @04:59PM (#40643365) Homepage

    I'm annoyed by the idea of ads, but in reality I don't think the ads get in the way at all.

    If you start your system with a game in it, press the "a" button and the game goes. To browse the game library, press down and hit "a."

    It's not like you have to sit through a commercial, it doesn't even take up screen space that would be better used elsewhere. It's basically a non-factor.

    XBLA games that get popular get popular through positive reviews, word-of-mouth, and advertising. Not because people are randomly browsing through streamlined XBox menus and decide to take a chance.

  • by Anonymous Coward on Friday July 13, 2012 @05:02PM (#40643407)

    I'm not sure this is a perfect metaphor (though I don't know much about advertising in cable). In order to relate TV to Xbox live, you have to consider that the cable provider = Xbox live service, and cable channels = video games. With the cable advertisement system, advertisements are run on a per-channel basis, with time slots sold by the channel. The difference here is that the advertisements aren't coming in through the analogous video games, but through the provider itself, Xbox.

  • Re:Overstated (Score:4, Insightful)

    by h4rr4r ( 612664 ) on Friday July 13, 2012 @05:04PM (#40643427)

    That does not matter. I will not pay to receive ads. If there are ads on the system the games had better be free.

    Same reason why I will never have cable, and would cancel netflix in an instant if they ever showed a single advertisement on streaming.

    The screen space would be better used by being blank.

  • Cable TV anyone? (Score:5, Insightful)

    by NalosLayor ( 958307 ) on Friday July 13, 2012 @05:09PM (#40643511)
    Not to point out the rotting dead fish in the middle of the room, but this is exactly what happened with cable TV, and yet there is no real outrage on that front any more. I'm not saying it's the right thing...or even "acceptable" but customers seem to never balk at ads, and content streamers never turn down a revenue stream. It feels almost inevitable.
  • by Baloroth ( 2370816 ) on Friday July 13, 2012 @05:14PM (#40643555)

    Well, besides the fact that it can interfere with your ability to find actual content (as others have pointed out), it's also the "frog in boiling water" problem. While it may not interfere with your ability to do what you want now, I have no doubt MS is looking at the possibility of doing things like playing unskippable ads before you can play DVDs or games, or adding ads into games (or even movies) on the fly. Anything they can do to make even more money. And so long as people have a good deal already invested in the platform (in the form of locked-in games and whatnot), people won't switch away. Whatever MS can get away with, they will do, eventually.

  • by scot4875 ( 542869 ) on Friday July 13, 2012 @05:47PM (#40643933) Homepage

    Big fuckin' deal. I've had an HD TV for nearly 10 years; HD is a nice bonus, but it doesn't make a bad movie good, and the lack of it doesn't make a good game bad.


  • by CanHasDIY ( 1672858 ) on Friday July 13, 2012 @06:06PM (#40644159) Homepage Journal

    There are ads that load in when you connect to PSN. However, most of those ads are for games/videos you can download from PSN.

    Same thing goes for Xbox Live. I'm an XBL user and I didn't really notice the change that much, because it's no different than what Google is doing with Android Market and what Apple does with its iOS and Mac App Stores.

    It's completely different.

    Apple and Google relegate their advertising to their app stores - you know, a special place specifically designed for you to go and buy stuff? It would be the same thing, if every time you turned on your Android or iDevice, you were smacked upside the head with ad after ad, but that's not the case.

    Also worth noting, Apple and Google don't charge you for the privilege.

  • by sarysa ( 1089739 ) on Friday July 13, 2012 @08:07PM (#40645119)
    The thing is, the default setting if you have a disc (XBL gold or not) is for that disc to play. If that disc has multiplayer and you're logged into XBL, multiplayer just works -- you're not force fed advertisements at any time. Messages are primarily sent through the little Xbox-button menu which is usable both in and out of game. Achievements can be browsed this way as well, and friends can also be searched this way. No ads there either.

    The point I'm trying to make is the Xbox Live landing page is typically for users who are looking for something else. It's not all that different than Google Play (I used the outdated name earlier) or App Store if you really think about user behavior. You pretend to spend $200-300 on a phone (in reality it's thousands over two years) and when you're looking for content, you're first shown featured content -- not a bland search screen or category listing. The console's core purpose of being a gaming device is no more compromised by the Xbox landing page than smartphones are by their respective market pages. I mean, it sucks that you can't go and put your Arcade games/indie games/netflix/whatever on the landing page, but I don't remember ever being able to.

    If Silver members see the ads/featuring then it's really not all that bad. You can buy $1000 worth of content on the App Store and the featured content isn't going to change.

    Not that anyone's claimed this, but I'm not a M$ employee, just an amateur devil's advocate.
  • by BoogeyOfTheMan ( 1256002 ) on Saturday July 14, 2012 @01:01AM (#40646389)

    I wish people would stop spreading this FUD. Yes Sony-BMG did the whole root kit thing and they should be shunned for it, but Sony Computer Entertainment had nothing to do with that division.

    Its like not buying a Yamaha keyboard because you think Yamaha motorcycles suck. Or hating someone because their brother is a douche bag.

    If you're going to hate a company, hate them for the things they DID do.

Logic is the chastity belt of the mind!