Gamers receptive to ad-supported Xbox Live service

by Vladimir Cole { Feb 15th 2006 at 7:00AM }

Two weeks ago, we polled you to ask whether you'd be interested in an ad-supported version of Xbox Live. The results are in and they're somewhat surprising.

Nearly half (46%) of Xbox 360-owning poll respondents would opt for an ad-supported version of Xbox Live if it were available. Of gamers who were willing to view ads in exchange for free access to Xbox Live, 40% of them were not previously subscribers to Xbox Live, suggesting that Microsoft could considerably expand the ranks of gamers who use Xbox Live if the company were to offer a free version of the service.

Over half (52%) of the Xbox 360 owners who responded to the poll said that they pay for Xbox Live now and would continue to pay for the service in order to avoid seeing advertisements. Our gut tells us that this number is skewed somewhat higher than it would be if this were a real option. Gamers tend to react very negatively to the idea of advertisements, but might be somewhat more tolerant of ads in practice (this gut is supported by the insane traffic that still inundates certain popular games sites, where the advertising is egregious, invasive, and not at all consumer-friendly).

Might this idea actually see the light of day? We reckon it depends on whether the value created by a connected gamer exceeds the foregone subscription revenues. The success of Asian MMOGs (free to play, but digital content'll cost ya) indicates that the real value of a connected gamer isn't necessarily in the subscription fees.

Reader Comments (Page 1 of 1)

Raving Lunatic @ Feb 15th 2006 7:50AM

I was at work at Blockbuster the other day when someone called and asked if we carried some game that began with the letter "H". As I was looking for it in our computer database, I happened across an entry for Halo 3, which said that the expected release date for the game was October 10, 2006.

~NX~ @ Feb 15th 2006 7:52AM

If you haven't realized already, Xbox live is *already* full of ads. There's a targetted banner ad on all the dashboard pages, even a half-page ad on the marketplace menu. Then there's the content like movie trailers in which Microsoft is *paid* for every download.

TC @ Feb 15th 2006 7:56AM

How much of the traffic to those ad-heavy game sites is from people using industrial-grade ad-blockers, though? That probably wouldn't be an option on Live (even if you managed to get your firewall to filter the ads, MS would probably ban your box for it)

epobirs @ Feb 15th 2006 9:37AM

It seems like a reasonable trade for Gold level premium services. Online support isn't free. It cost money to get it all up and running, then more money to operate the servers and personnel to maintain them as well as the pipes they use to reach the customers. For some types of games the cost is pretty minor and can be factored as part of the marketing cost, although a game that sells only mildly well but ha a highly devoted online contingent can eventually become a money loser.

Other types of games and services, especially a constantly evolving system like Xbox Live, have a substantial infrastructure cost. There needs to be cashflow or it becomes a financial sinkhole. getting that money from other places to allow a wider customer base is always useful.

This would appeal to me because I cannot currently justify an XBL Gold membership. It isn't the cost so much as the infrequency of use. I might be a heavy user for a week and then not use it at all for a couple of months. Making the service more accessable to users like me will allow more growth.

Andrew Fong @ Feb 15th 2006 9:55AM

If they offered a per-hour subscription plan, I might jump in -- some months I play a lot and some months I don't.

Oncnawan @ Feb 15th 2006 10:18AM

I find the tie between ad-based Xbox Live and ad-ridden gaming news sites tenuous at best, ridiculous at worst. I surf game news sites to gather news. Reading or viewing media, I can ignore many of the ads, especially when I can block the more obnoxious ones. When I play on my Xbox 360, I seek entertainment. The whole experience either contributes to or detracts from my enjoyment of the game, which is the focal point. If I had to "click here to continue to Call of Duty 2", I would find some other service, some other box. Xbox 360 owners all over the web have extolled the virtues of the dashboard, its slick design, ease of use and elegant simplicity. Advertisement cheapens that experience. I am willing to pay $4.20(US) every month to game ad free.

benderillo @ Feb 15th 2006 10:26AM

"this gut is supported by the insane traffic that still inundates certain popular games sites, where the advertising is egregious, invasive, and not at all consumer-friendly"

all of the sudden I feel the need to buy a DLP HDTV...

JusJusJus @ Feb 15th 2006 11:04AM

"This would appeal to me because I cannot currently justify an XBL Gold membership. It isn't the cost so much as the infrequency of use. I might be a heavy user for a week and then not use it at all for a couple of months. Making the service more accessable to users like me will allow more growth."

Thats why there are monthly subscription cards you can buy...If you don't want to purchase a yearly plan just go with one of those...

Aram @ Feb 15th 2006 11:23AM

It'll be great if they have 2 kinds of gold service: paying subscription and ad-based subscription. Not everyone can justify paying for the Gold service, especially for casual gamers who may play just 1 or 2 games online.

besides, seeing ads aren't too bad, as long as they aren't too invasive (like in-game advertising!)

Bloo @ Feb 15th 2006 1:28PM

If you can't come up with $5 more a month, you need to play less games and learn had to do something where you'll get paid more.

Captain Betty @ Feb 15th 2006 1:36PM

Uhm...

1. Xbox Silver is free and MS has plans to offer free "Gold Preview" weekends.

2. If you can't affort $50/year (the cost of 1 game)...don't bother or like others said - get a 1mo or 3mo subscription card. How many $50 games do you have laying around that haven't been played yet?

Keep the adds off my box.

tellute @ Feb 15th 2006 1:47PM

Without wanting to sound too snobbish, if this happened I hope there'd be an option for paid members to opt out of playing with the ad-supported people. There's too already many kids on XBL and I don't want to come across loads more.