According to Yusuf Mehdi, head of Marketing and Strategy for Xbox, people now spend an average of 84 hours a month on Xbox Live. What isn't made clear is whether being "on Xbox Live" includes people connected to Live, but playing single player games, watching DVDs, or taking part in any number of non-Xbox Live related activities. It also isn't made entirely clear whether this figure includes only Gold subscribers, or those who have a Free account, too. Either way, Microsoft are quick to trumpet that the figures are up 30% from a year ago, and compare favourably to the 150 hours a month the average household spends watching TV in the traditional form. In fact, over half of the time people spend on their Xbox is spent watching films, TV shows, or listening to music.
But is this transition really in Microsoft's best interest?
"What we're seeing is that people are turning on the Xbox to play games and then keeping it on afterwards to get other types of entertainment," Mehdi said, suggesting that the platform holder certainly seems to think it's making the right move. But take a step back, and look at the situation a little bit differently, and it starts to become apparent that Microsoft are playing a very dangerous game here.
The idea of conquering the living room is certainly a noble one, and trying to make the family's entertainment time revolve around the Xbox - no matter whether they want to watch a film, play a game, or catch up on a program they've missed certainly makes sense - at least to begin with. But only if the end result of this is that by spending all their time on the Xbox, and getting it into the living room, people end up buying more games. Judging by the recently released statistics, there's no reason to believe that's anywhere near true.
If people are spending more than half of the time on their Xbox watching TV and films, then less than half of their time - that's less than 42 hours a month, or less than an hour and a half a day, playing games. Whether that's risen or fallen in absolute terms compared to years gone by is anyone's guess - but at least proportionally, the amount of time people spend playing games - and presumably therefore, the amount of games they buy - has fallen. In that same period, the number of "apps" on the 360 has increased from around 3 (Last.fm, Sky Player, and the Zune Marketplace) to a much more robust line up of 36 in America. The Zune marketplace has gone from being pretty much empty, to hosting a much more robust collection of films. Countless hours of time, effort, and marketing has gone into turning the 360 into not just a games machine, but a "media hub" - to the point that now, the primary use of the console is as a video player.
And for Microsoft, that's not a good thing.
For starters, while "apps" may sound like a great idea on paper, they're not likely to be able to provide the same sort of revenue stream that Microsoft receives from a game. While most apps are only available if you have an Xbox Live Gold Subscription (which currently sets you back around £40 a year), that's roughly the cost of a single game - and many people with Xbox 360s usually buy a lot more than a single game in a year. When compared to the £40+ RRP of a game, plus the Gold subscription people will have, plus any downloadable extras they buy, apps don't seem to be all that good an economical proposition.
By increasing the number of apps on the 360, and increasing the number of things people can do other than playing games, what Microsoft are actually doing here is competing with themselves, for eyeballs, for TV time, and for people. As, formerly primarily, a games console, most of Microsoft's budget presumably still goes on the promotion, developing, publishing and marketing of games. The longer people spend watching TV on demand on their 360s, the less time they'll have to play games, and the less games they'll buy. Without any income from the various apps to replace the theoretical fall in game sales (and we don't believe they do get any money from it), Microsoft may well see their revenue streams fall while their usage goes up.
Another thing to think about is that by getting involved in media and TV on demand, Microsoft has not only opened itself up to a whole new market - but to a whole host of competition, too. It's clear that Microsoft's been promoting its console as being a media hub - but it's not the only hardware provider to be thinking along the same lines. Over the past few years, Smart TVs have been becoming ever more popular, offering many of the same services the 360 does - but for free. YouTube, Netflix, Hulu, Love Film, Facebook, Twitter, and the BBC iPlayer, to name just a few, are all available through Smart TVs at the moment - and as the idea becomes more popular, the novelty of the 360 will become almost null and void. After all, when every TV is its own media hub, why would you buy another console, and pay a £40 a year subscription?
It's worth remembering that, try as it might, Microsoft will never have the exclusive on TV services, films, or music. No TV provider in its right mind would offer an exclusive contract to a console, when it wants its programs seen by as many eyes as possible. While there's nothing wrong with adding these apps to increase the capabilities of the console (we've rented a few films from the Zune marketplace before, and do dabble in the iPlayer from time to time), it's by no means what Microsoft should be placing all its bets on - or shouting the loudest about, when the competiton in that sector's about to become cut throat. After all, the second Smart TVs take off - and that could be this year, or a year or two in the future - one of Microsoft's biggest selling points will have been rendered completely useless - and their new "media hub" console risks looking like an ancient folly.
Which is why it's all the more frustrating that Microsoft seems to be trumpeting TV and video above all else, as though it's forgotten where its strengths really lie. Microsoft always has, and always will be a software developer, and the sole area where Microsoft's proven it can really excel is in the production of games. No matter how advanced TVs get in the next few years, being able to stream a proper, Xbox 360 quality game, with all the social features (party chat, friends lists, achievements) that the console provides, above all else, in a reliable, lag free fashion is still a long way from being a reality - especially while download caps and broadband throttling remain the norm. In taking on the TV, Microsoft's taking its eye off its strengths, and if anything, highlighting its weaknesses, potentially letting its competitors sneak past. With Nintendo's latest console, the Wii U launching later this year, and the PS3 picking up momentum, a new focus on the games from either one of them could tip the balance in their favour. And while Microsoft spend their time focussing on positioning their console as a media hub, were their audience to leave, and find their gaming fix elsewhere, as soon as Smart TVs become more commonplace - the latest efforts from LG and Samsung looking particularly likely to provide practically every media feature the 360 does, Microsoft's media hub audience will be gone.
If an assault on the living room is key to Microsoft's success, there are better ways to go about it. For starters, why not launch a new push towards making games the whole family can play, together? As much as it may seem like Kinect's the means to that particular end, it's important to remember Kinect's particular limitations. With Kinect, your styles of games are incredibly limited (how many games are there that aren't mini game collections, fitness, or dancing games so far?), and the number of players it can support is limited to two. Even if it could support four, the amount of space you'd need would be restrictive for anyone but those 5% with the largest living rooms in the country. A new focus on games the whole family can play together, with a controller, would encourage the Xbox to be brought out into the living room, increase sales of games (and peripherals), whilst simultaneously not leaving anyone out, due to having a normal sized living room, a coffee table, or a disability.
However you look at the situation, it seems clear that the path Microsoft are treading is one littered with potential pitfalls and danger. In the end, Microsoft don't want to be left in a position wondering where it all went wrong. It's important that they remember where their money comes from, where their strengths lie, and where they stand the best chance of taking on their competition - and that's with their games.