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  (Source: Microsoft Studios)
TV shows are expected to be Xbox One exclusive, give console a boost

Microsoft Corp. (MSFT) delivered a rather mild surprise when it announced that it had recruited Steven Spielberg to produce an upcoming exclusive TV show for the Xbox One based on the Halo series in which future humans battle alien invaders.

I. Forza Motorsports: The TV Series?

This of course wasn't the first video game franchise to see a turn to video.  But past efforts have tended to be either well after the fact (like Tekken and Alone in the Dark), were horribly campy (like Street FighterMortal Kombat, and The Super Mario Brothers), or were just plain inexplicably mediocre despite big name actors/budgets (e.g. Prince of Persia and Lara Croft: Tomb Raider).

But over the last couple weeks, Microsoft has delivered a far bigger surprise revealing that it is looking to become perhaps the biggest maker of video game television and movies in the industry.  Comments Microsoft Studios CVP Phil Spencer at the Tokyo Game Show, "[The joint Microsoft/Spielberg team has] literally hundreds of ideas that they are incubating right now.  We will have some new announcement for TV shows coming pretty soon."

According to Reuters, Microsoft refers to these other projects as "Nancy projects" a title which pays homage to CBS Corp.'s (CBS) former Television Studios President Nancy Tellem whom Microsoft hired a year ago as head of entertainment and digital media. 

Mario Bros. movie
Microsoft doesn't seem overly concerned that in most cases video games moves have... well, stunk. [Image Source: Buena Vista Pictures]

But of all Microsoft “experiments”, its gaming business has been by far the most profitable, particularly as it has expanded its game publishing efforts via its Microsoft Studios Holdings.  And increasing the software/media efforts related to its gaming business helps to offset and make worthwhile the money losing console business.

And Microsoft's TV efforts could go a long ways to differentiating its Xbox console.  In addition to its Halo and unannounced other game-based TV series which ooze hardcore nerd/gamer appeal, Microsoft will also cater to the mainstream partner with the National Football League and other partners to offer exclusive clips via the Xbox One and its online backbone, Xbox Live.

II. Dwindling Console Sales, Controversy Take a Toll on Xbox Expectations

However; the effort is not without risk.  Microsoft upgraded its console to pull even with arch-rival Sony Corp. (TYO:6758) on an offline-hardware basis.  As a result, it will likely lose money on every unit sold.  Microsoft's big bet is cornered on three key assumptions -- that a lot of people will buy its Xbox One console, which launches in 13 markets on Nov. 22, that a lot of people will buy Microsoft Studios games (like HaloForza Motorsports, and Zoo Tycoon), and that a lot of people will sign up for its $60 USD a year Xbox Live Gold membership.

The consoles sales goal is by no means a done deal.  Piper Jaffray Comp. analyst Michael Olson predicts that the Sony PlayStation 4 (PS4) and Xbox One will each sell about 3 million units -- a far cry from the booming sales of some past consoles.  Mobile gaming has taken its toll on traditional console gaming.  Microsoft arguably has the more compelling console in terms of interface and exclusive titles, but has been mired in controversy.  

Some of Microsoft's most controversial stands (e.g. offering developers digital rights management code libraries to ban used games and requiring the console to be "always on"were reversed -- an admirable show of listening to customers.  But these controversies still have somewhat damaged the console's overall image.  And given Microsoft Corp.'s (MSFT) data sharing arrangements with U.S. National Security Agency (NSA) some remain concerned that the console's 1080p Kinect 2 camera -- which is always on when the console is powered up and internet active -- will be a privacy risk.  Microsoft's console is also more expensive; the Xbox One retails for $499 USD, while the PS4 retails for $399 USD.

As for the game sales goal, video game sales for consoles now only account for 33 percent of sales -- according to the NPD Group -- due to mobile games, social network games, and other niches stealing away some of traditional gaming's business.  Still that number is slightly misleading, as it doesn't factor in the digital downloads market (part of the remaining 67 percent), of which the Xbox has a substantial stake.
Xbox One
It's unclear whether Xbox Live Silver customers will be locked out of Microsoft Studios's TV shows.  Microsoft cripples certain console hardware features for customers who don't buy a "Gold" level membership.

But speaking of digital downloads, Microsoft's efforts to push customers into its Xbox Live Gold model by locking them out of features on their console (DVR, etc.) if they stick with the free Live Silver level members is alienating some potential buyers.  Microsoft's approach seems pretty counterintuitive in that it actually allows non-paying users to play online games (which costs Microsoft money in serving fees) for free, which Sony only allows paying customers to do.  But Sony does not lock non-paying PlayStation Network customers out of features on their console; features that essentially have already been paid for with the cost of the console.

With respect to its TV push, one critical thing not yet made clear by Microsoft is whether Live Silver subscribers will be locked out of the free Halo show and other television content on the console.  It's very possible that they may be, given Microsoft's announcement of the channel guide and DVR locking.

In short, there's a lot of unknowns as the Xbox One approaches, but Microsoft is certainly not shying from taking a unique and ambitious direction with its television ambitions.

Source: Bloomberg

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By GulWestfale on 9/19/13, Rating: 0
RE: flop?
By TSS on 9/19/13, Rating: -1
RE: flop?
By StanO360 on 9/19/2013 3:51:36 PM , Rating: 1
Your a simpleton drone, I'd rather share the views of Madison, Jefferson, Washington and the other founding fathers than Occupy Wall St. thank you.

RE: flop?
By GulWestfale on 9/19/2013 4:39:52 PM , Rating: 1
"your a simpleton"

that's almost as good as

"your a idiot"


and i'm sure these people you speak of didn't want your government to spy on its citizens in a worse way than the soviet union or east germany ever did. something about not trading freedom for security... what was it again?

RE: flop?
By DiscoWade on 9/19/2013 4:41:54 PM , Rating: 3
Why not just go ahead and say "Jane, you ignorant slut" and be done with it.

RE: flop?
By M'n'M on 9/19/2013 4:58:51 PM , Rating: 3
Because that would mark him as being old enough to have watched SNL ... when it was actually funny.

RE: flop?
By GulWestfale on 9/19/2013 6:59:53 PM , Rating: 2
snl used to be funny? well, i never...

RE: flop?
By BifurcatedBoat on 9/19/2013 5:31:18 PM , Rating: 2
Those people were willing to start a war over taxes. You really think they would appreciate an organization like the NSA?

RE: flop?
By CaedenV on 9/19/2013 8:43:25 PM , Rating: 2
You think it was about taxes? Really? I mean taxes did play a part in it, but there was a lot more that went into it. One of the biggest issues was that you could only purchase (with rare exception) goods imported from europe, as making things out of materials gathered from America was illegal. This caused huge prices on things which made it impossible to gather any wealth at all... and a great many of the people came in order to start life over and attempt to build some sort of wealth which could not be had in England. When they started adding punitive taxes it was just insult to injury, but things were already headed towards revolution long before they were implemented.

RE: flop?
By augiem on 9/19/2013 5:01:19 PM , Rating: 2
even if it comes with an NSA camera/microphone that's always on.

If you buy it:

Option 1: Duct tape and foam.
Option 2: Unplug system.

RE: flop?
By M'n'M on 9/19/2013 5:54:43 PM , Rating: 2
I'd have proposed a more interesting study. Park it aimed at a TV perpetually tuned to the porn channel. Then watch your network traffic and see how much is being used by the XBox and when.

RE: flop?
By inighthawki on 9/19/2013 8:30:54 PM , Rating: 2
I think it'd be fairly easy to monitor traffic to see if the xbox ever sends video traffic across the network at all. It's not that easy to hide a video feed's worth of traffic on a device that, when in standby, should be sending hundreds of kilobytes a day, tops.

RE: flop?
By troysavary on 9/19/2013 9:02:06 PM , Rating: 2
So, I guess you must not have a cell phone. After all, if you think Bill Gates wants to watch you masturbate on your sofa, you must obviously be too afraid to carry a device with a mic, camera, and location tracking with you everywhere you go.

RE: flop?
By Mint on 9/19/2013 9:44:57 PM , Rating: 2
Exactly. How is it that people are so paranoid about MS conspiring with the NSA for XBox One yet give a pass to smartphones?

If you're gonna wear a tin foil hat, at least be consistent.

RE: flop?
By FITCamaro on 9/23/2013 8:28:33 AM , Rating: 2
People who express the sentiments of the OP rarely think anything through, much less complex subjects.

Any good
By Ammohunt on 9/19/2013 2:49:34 PM , Rating: 3
Was any of the Halo TV shows/Movies any good? i have seen the movie on Netflix but don't want to waste a couple hours of my life watching a video game movie. That and i have never been into the halo scene(there has always ben better games out on PC)

RE: Any good
By FITCamaro on 9/19/2013 3:28:57 PM , Rating: 2
It was definitely very good.

RE: Any good
By StevoLincolnite on 9/19/2013 7:23:42 PM , Rating: 2
Halo: Forward onto Dawn was actually rather decent considering what it was.
It was easily the best Sci-Fi show on air at the time, that doesn't say allot, really the only Sci-Fi shows on was: Falling Skies and Defiance (Police Drama dressed up in Sci-Fi) and now with a little dash of Under the Dome, so the competition isn't exactly aggressive.

The current state of Sci-Fi TV is actually rather depressing considering what we got in the past with the likes of StarGate, Star-Trek, Firefly, V, Battlestar Galactica and such.

Halo: Legends though, was a boring piece of molasses, being a stitched up bunch of short films.

RE: Any good
By althaz on 9/19/2013 8:22:51 PM , Rating: 2
Red vs Blue is pretty incredible and that's made with Halo.

RE: Any good
By inperfectdarkness on 9/20/2013 3:31:22 AM , Rating: 2
Is it going to be sponsored by Mountain everything else Halo related?

RE: Any good
By Silver2k7 on 9/23/2013 6:11:07 AM , Rating: 2
Mountain Dew is pretty good.. but I did like MD Pitch Black even better, they should add it back on shelves :)

RE: Any good
By Jeffk464 on 9/21/2013 4:36:55 PM , Rating: 2
i have seen the movie on Netflix but don't want to waste a couple hours of my life watching a video game movie.

Good, dont know about that. It beats watching another episode of CSI though.

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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