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They want Xbox to be seen not as a mere gaming machine for teenagers but as a media portal for parents and grandparents, too. The company is even producing shows for users: It is in the middle of Season 2 of ‘‘1 vs. 100,’’ an interactive version of a game show that was on the NBC television network.
The content ambitions do not end there. Microsoft has held in-depth discussions with Walt Disney Co. about a programming deal with its ESPN unit, according to people close to the discussions, who requested anonymity because the talks were intended to be private.
For a per-subscriber fee, ESPN could provide live streaming of sporting events, similar to the ones available through ESPN 360, a service that is available from some high-speed Internet providers in the United States. Microsoft could also create some interactive games in association with ESPN, the people said.
Already, video game consoles are putting a new emphasis on the video, rather than the game. The roughly 20 million members of Xbox Live can surf Facebook, browse an online mall of movies and television episodes, and, if they pay, watch streaming movies from Netflix.
‘‘It’s 20 million connected living rooms,’’ said Marc Whitten, the general manager of Xbox Live.
Similarly, users of the Sony Play- Station can tune into BBC shows and see Weather Channel updates, as well as stream Netflix movies. Last week, Netflix extended its streaming service to the Nintendo Wii. Among the many companies that want to transport the on-demand qualities of the Internet into the living room, the console makers have a significant head start.
‘‘For both of the big guys, it’s about extending the value of the hardware platform,’’ said Mike McGuire, a vice president of Gartner, the research firm, referring to Microsoft and Sony. ‘‘The devices are hooked to TVs and have broadband connections, and there are more and more opportunities to license movies and TV shows and deliver them in over-the-top models.’’ Microsoft said this month that it had sold 39 million Xbox 360 consoles around the world. About half of the users sign into Xbox Live each month.
At that size, ‘‘it starts to feel like a cable network,’’ said Mark Kroese, who oversees Xbox advertising sales for Microsoft.
The company does not specify how many members subscribe to its premium service.
Microsoft says it regularly counts more than a million concurrent users— and topped out at 2.2 million during the Christmas week last month. The seventh- most-watched U.S. cable property, Cartoon Network’s Adult Swim, averaged a million viewers last year, according to Nielsen.
The comparisons are crude at best because many of Xbox Live’s users are playing games rather than watching video, and because no third-party measurement exists since ratings companies like Nielsen do not yet track the service fully. But there is no doubt that consoles are expanding their domain.
The addition of the Netflix service in late 2008 was an important step into the entertainment arena for Xbox, and perhaps a precursor to Microsoft’s current talks with Hollywood producers.
Without releasing specific numbers, Mr. Whitten said the streaming movies and television service were ‘‘very, very popular,’’ including in his own household.
His wife is not a gamer, but she is a Netflix fan, he said.
Mr. Whitten said Microsoft wanted to be a ‘‘bigger player’’ in television and film viewing. He declined to comment on the conversations with Disney but said, ‘‘There’s going to be a ton of experimentation around business models and rights.’’ ‘‘Our goal is, really, howcan we get as much content there as possible?’’ The interactive gameshow‘‘1 vs. 100’’ at times drew about 100,000 concurrent users during its first season last year, according to Microsoft’s internal data.
Like the defunct NBC show, the game features a contestant, ‘‘The One,’’ and a ‘‘Mob’’ of 100 other players. Other members of the audience can watch passively or play along, improving their odds of being picked to play for prizes. Unlike the live-action TV show, every Xbox player is represented by an avatar, a cartoon image of a person.
DaveMcCarthy, a general manager at Microsoft Game Studios, said the television- style shows provided a guarantee that ‘‘you’re a part of something bigger.’’ Beyond the game show realm, Microsoft also exclusively shows ‘‘The Guild,’’ a sitcom that it bills as ‘‘Seinfeld’’ meets video game culture. It stars its creator, the actress Felicia Day, and is sponsored by Sprint, the mobile service provider.
For Sprint and other advertisers, online communities like Xbox Live are another arena to pursue consumers. Within ‘‘1 vs. 100’’ there are 15- and 30-second commercial breaks, like those on television.
The spots account for about 15 percent of the service’s advertising revenue; most of the rest comes from ads on Xbox Live navigation pages, like display ads on Web sites.







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