Just when you thought Microsoft could get no more massive, The Wall Street Journal reports that Microsoft is
acquiring New York-based video game advertising company Massive Inc. for between $200 million and $400 million.
We're not sure what took the Journal so long. We totally saw this one coming, like, four months
ago.
What's that sound? It's a cash register ringing up revenue stream #17 for Microsoft's growing
gaming business.
Don't remember the others? Here's a refresher on just the Xbox-related streams: (1) Xbox
Live subscriptions; (2) royalties from Xbox Live Arcade titles (direct
digital distribution 4TW); (3) Xbox Live sponsored
weekends; (4) Peripherals; (5) That
"artist of the month" music video distribution deal that we've never bothered to write about but that you can
be sure Microsoft is getting paid handsomely for; (6) royalties on every Xbox 360 game sold; (7) direct revenues from
first-party game sales; (8) Movie trailers (surely, Microsoft's not paying movie theaters to place trailers on the
360); (9) DirecTV on the 360;
(10) Xbox gear; (11) game-to-movie
royalties; (12) Sound tracks; (13)
books
based on games; (14) digital tchotchkes purchased with Microsoft points; (15) royalties on content packs and episodic
game content (16) sales of the consoles themselves...
Microsoft munches Massive Inc.
22 Comments by Vladimir Cole Apr 26th 2006 12:16AM
Filed under: Mac, PC, Sony PlayStation 3, Nintendo Wii, Wireless, Microsoft Xbox, Microsoft Xbox 360, Online, MMO, Business
Tags: ads in games, advertising, massive, media
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_thumbnail.jpg "i am 8-bit: 2008")
(Page 1) Reader Comments
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However, the free service probably wouldn't have HD trailers and perhaps a more limited demo selection. That's because these are NOT distributed but must be hosted on MS servers, costing more.
If anyone from MS is listening, I think I'm not the only one that would really go for this. It would also boost your "online" percentages by a huge margin which can't hurt given that Sony and Nintendo are now both looking to create online analogues for Live.
In contrast, adding ads to the already for-pay Gold while not adding functionality to Silver will probably alienate those who have had ad-free Gold services for several years ... you choose.
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I have one critique i want to mention on revenue stream 16. I thought Microsoft was selling it's console at a loss while capitalizing on live subscriptions, micropayments, and of course, ridiculously expensive 60 dollar games.
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Xbox Live Gold already has ads...
Notice the banners on the dashboard menus?
Notice the movie trailers for download?
Notice advertisements inside many games already?
How much more intrusive can you get? And why should I pay $50/yr for this?
And about Micrsoft hosting files... it costs them next to nothing for 1GB of bandwidth, by that I mean 0.000001, and I'll bet you they get around $0.50 per download.
In a way, the Xbox 360 is also Microsoft's trojan horse to get inside your living room. Sales of Media Center PCs haven't been too great, so the Xbox 360 is taking its place in Microsoft's plan to dominate every device in the hame. The 360 isn't really a game console at heart, that's just the disguise to sell units.
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Microsoft are doing some good stuff and we all know, you dont have to PUSH it in our faces on the news pages.
Stop with the Brown nosing, ta.
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Huh? Sorry man, just playing... listening to too much drrty drrty south tonight.
Anyway... Have fun when some in-game voice-over suggests "taking down the terrorist from the safety of the Subway Brand billboard, don't bother with the Quiznos billboard, its already shot full of holes and offers no cover..."
This in-game advertising is going to get BAD, and if it doesn't bother you yet, it will in a while... 'Need for Speed Underground 2,' anyone?
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Do you know... something?
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Compare all of this to $4 a month. Now do you think Live is expensive.
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Nice try though.
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They're not going to try and take over the world or anything, they're trying to sell their merchandise and make more money to make more merchandise to sell and expand into other markets.
Who gives a crap if the 360 is just a way for MS to get into your living room, of course it bloody is, it's a games console!
Banners saying 'Call of Duty 2 Demo Out Now' on the Marketplace are hardly advertisments, more like notifications, otherwise how would Mr Average Joe know that the CoD2 demo is out?!
The point is Microsoft made a great product, have the best online service available anywhere, and I basically think that the mere £40 a year I'm paying to keep my XBL Gold account going is more than worth it!
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I dont know what youre trying to pull, but youre not convincing anyone.
$50 bucks a year is like spending that much on some bad Playstation game like Tekken which you'll play for a few weeks and then stop. Xbox Live lasts you a year, and you pay for the service. Not servers, but maintenance, upgrades, 24/7 tech support, etc.
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Vista will have full Media Center functionality. Then it will have full control of your living room.
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As a shareholder, you SHOULD be happy that the company's working on so many different ways to turn the Xbox into a profit center.
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How short-sighted that would have been! A company that does what shareholders want is being managed for certain doom. Managers need to add value by taking on long-term projects that may be negative NPV in the short run, but pay off in spades over the long run.
Nobody's claiming victory, but $500 million bucks is friggin' chump change when you're talking about the battle for the LIVING ROOM. Microsoft paid out the largest corporate dividend EVER ($32 billion) in 2004 because it couldn't find enough projects to invest in. That's the nightmare scenario that should worry shareholders, not a few bets placed on technology that could help the company break into the last open frontier.
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