Microsoft’s E3 Media Push Ignores Xbox Achilles’ Heel

Seven years into the Xbox 360’s life cycle, Microsoft has moved the emphasis of its console from video games to digital media services, bolstering its living room credentials. But for those who would use the Xbox 360 solely as a living room set-top box, the device has a single, significant and inexcusable weakness: Users must pay $60 a year for Xbox LIVE Gold on top of the actual services they intend to enjoy.

Microsoft first provided Xbox LIVE to gamers on the original Xbox in 2002, providing both free and paid versions of an online multiplayer gaming service that could take advantage of the console’s Ethernet port and broadband connectivity. Over the years, however, the service has evolved to include non-gaming features, including integration with Microsoft’s Windows Live Messenger service, Zune media services, and Bing Search.

But in recent years, Microsoft has pushed its most recent console, the Xbox 360, as a general-purpose entertainment hub for the living room. And it’s been adding numerous third party media services—like Netflix, Hulu Plus, Amazon Instant Video, last.FM, MLB.TV, Vevo, and many others—to the console. Most of these services require the user to have a paid subscription of some kind, and most are likewise available via other devices, including in some cases the Apple TV, the Sony PlayStation 3, Roku media players, and so on.

But only on the Xbox 360 do you need to pay extra to use these services. Xbox 360 users must also have an Xbox LIVE Gold account, which costs $60 per year, while those with an Apple TV, the PS3, Roku, or other devices don’t charge extra beyond the cost of the hardware and the actual services.

Furthermore, many of these devices are much less expensive than an Xbox 360, which starts at $200 in the United States. An Apple TV costs just $99, while Roku sells three different versions of its media set-top boxes, the most expensive of which is $99. The least expensive Roku, meanwhile, costs just $50.

Microsoft’s strategy of attaching third party media services to its paid Xbox LIVE Gold account made sense when the primary audience for its console was gamers: After all, Xbox LIVE Gold includes several features aimed at dedicated gamers, and the media services were basically an enticement to use the console more. But with over 50 percent of all time spent using the Xbox 360 now taken up with non-gaming uses, this strategy is hard to justify. It doesn’t help that not a single Microsoft competitor is charging the same kind of additional fee.

So while I applaud Microsoft’s renewed push into digital media with the Xbox 360, and its ongoing rebranding of its own media services under the Xbox umbrella, charging a yearly fee for the pleasure of using these services on the Xbox 360 is unfair and unwarranted. In fact, I argue that Microsoft should use free access to these services as an enticement for non-gamers to learn more about Xbox LIVE’s games and game-based services, flipping the original point of the service around nicely.

And while I’m on this topic, I also find it somewhat bizarre that the Xbox 360’s dashboard serves up numerous annoying and animated ads. I pay for Xbox LIVE Gold, after all. Shouldn’t membership and its annual fee at least spare me from that?

TAGS: Windows 8
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