Xbox Live Is Becoming Highway Robbery

By Chad Awkerman

November 19, 2009

A couple months ago, if you participated in the beta events for Microsoft’s new game show on Xbox Live – 1 vs. 100 – you might have noticed ads from Sprint during pseudo-commercial breaks between rounds.  It interested me a bit, but I was quickly over it.  So, they’re getting a little ad revenue from one ad spot, what’s the harm in that?  Fast forward to today.  The New York Post has a piece on Microsoft’s intention to partner with the Nielsen ratings to start tracking their Xbox Live “viewership” in a similar manner to which television programs determine their ratings.  Here’s what the article had to say about Microsoft’s intentions.

The end game for Microsoft is to provide ad buyers with a standard metric — Nielsen ratings — that they can use to compare the Xbox Live in-game audience to the traditional TV marketplace.

With more and more people using Xbox Live – really, any online service – to watch movies and television shows on-demand, this seems like the natural progression for Microsoft to take.  It shouldn’t come as a surprise to anyone, to be honest.  Just take a quick glance through your Xbox dashboard while connected to the Internet.  Paid gold and free silver accounts alike have ads popping up in various panels at various times.  This is all in addition to the Sprint ads during the beta run of 1 vs. 100.  So, Microsoft is looking to expand its ad revenue and try to lure television advertisers to Xbox Live and, from the sounds of it, those advertisers are rather interested in seeing some numbers.  This is problematic – at least in the past – as, unlike television, there is no standard to measure those who watch various different forms of media via their gaming system.  Quoted in the article, here’s what the  head of advertising for Microsoft’s entertainment and devices group had to say.

This is something TV advertisers are very comfortable with.  At some point, the media planner just wants to be able to compare us side-by-side.

In a way, this is a good thing.  Bringing Nielsen on board for some test runs will help support the content that is provided.  Along with Nielsen measuring the audience for tonight’s 1 vs. 100 season premiere, here’s some more info about the specific ad deals they’ve secured.

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Sprint has signed on as the sponsor and has bought 15- and 30-second spots just like television. A handful of other advertisers have bought spots during the game. Nielsen will also measure how many people watch the ads as part of the pilot.

You still with me?  It took some build-up, but here is the issue with all of this.  While this is all well and good if Sony would get on the same bandwagon – their online service is provided free of charge – Microsoft charges $50 per year for an Xbox Live gold membership.  In other words, they already have the funds coming in from millions of paid subscribers to support the service and profit off of it.  Why do they need advertisers?

Browsing around on the Internet, you’ll see various services that are free of charge, but are supported by ads.  One glance at much of the free software on Apple’s iPhone app store shows the same thing – free apps supported by ads.  Then, the next step up you see the same app, possibly with some more features, and a price tag next to it.  This app or service will then be ad-free.  That’s just fine.  For something free, I expect whoever is behind it to have some way of supporting it, such is the case with the ads.

But, if I’m paying for something, I expect that cost to go toward the maintenance and upkeep of whatever service it is, not for them to show how greedy they are an tack ads onto a paid service, as well.  This is exactly where the Microsoft/Nielsen collaboration is heading.  At the heart of the matter, it isn’t a bad thing that they wish to create some sort of standard for a new way of experiencing various forms of entertainment.  But, what is of concern is what will happen if or when this kicks into high gear and we have to sit through three-minute commercial breaks during 1 vs. 100, which we seem to also be paying for in the form of our Xbox Live gold subscription.

Which direction will Microsoft go?  Will they force paying customers to sit through various ads or will they drop the yearly fee for the Xbox Live service altogether once they have decent ad revenue coming in to match their current subscription revenue?  That is the question of the day here, folks.  What do you think?

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Chad Awkerman

Chad joined the DualShockers staff in mid 2009 and since then has put much of his time into covering RPGs, with a focus on the Japanese side of the genre, from the obscure to the mainstream. He's a huge fan of iconic games like Secret of Mana, Final Fantasy VI and Persona 4 yet enjoys the smaller niche titles, as well. In his spare time he enjoys experiencing new beer, new foods and keeping up with just about every sci-fi show on television. He's married to an intelligent, beautiful Southern Belle who keeps his life interesting with witty banter and spicy Cajun cooking.

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