Microsoft's Live Arcade to be game central

November 10, 2005

Walk into the Los Angeles Convention Center during the Electronics Entertainment Expo each May and you'll see what video-game industry insiders wrestle with on a daily basis: Amid the bright lights, throngs of attendees, booth models, driving music, mind-boggling displays and seemingly unending quantities of promotional merchandise, each of the companies in attendance tries to grab the attention of its audience.

With only a few moments to present its products, a firm tries to get a demonstration version of their product into an attendee's hands.

In years past, Internet download sites, software included on magazine CD-ROMs, game reviews and advertising have been used to achieve this end. Come December, the rules might change with the launch of Microsoft's Xbox 360 game console along with an improved version of its Xbox Live Arcade network service.

Currently available in a limited version, Xbox Live Arcade requires a full account, which can be purchased at $49.99 per year. The current system, which is disc-based, requires the user to insert a demo CD-ROM into the console, then sign in through his or her Live account to be able to download a demo version of an upcoming game.

The revised service, which will premiere with the Xbox 360 console, will allow users to download and play game demos and movie trailers for upcoming titles provided they complete a one-time registration process with the server.

Xbox Live Arcade will also boast additional features such as the ability to download additional game levels, characters, items and content via a micro-payment program and the ability to unlock game demos for fees of five to 10 dollars. Once paid for, demo programs become full versions without the restrictions that typically arrive with demo programs.

"The best way to market a title is to get someone to play the title and no amount of media, reviews, etc. is as effective as someone playing the title. That's what we built into Live Arcade, a functional demo of every game," said Greg Canessa, group manager for Xbox Live Arcade. "We've enabled customers on consoles to experience a frictionless distribution system without have to go to the store or do what's typically involved in buying retail."

Canessa then likened the upcoming Xbox Live Arcade system to Apple's iTunes, Valve's Steam content-distribution engine and various Internet Web sites that allow users to download video games as proof that digital distribution can work.

"The current hope game developers have is that the audience is searching for something new," said Ben Bajarin, an analyst for Creative Strategies, who pointed out that video-game developers will often buy along a wide range of advertising methods in order to address their audience. "Clearly this is a more cost effective mechanism. The Xbox Live Arcade system pushes content for players, who are interested in the game as they play."

"One of the additional features is that it knows what games you're playing and requests demos and content that you might be interested in," said Bajarin, commenting on Xbox Live Arcade's system of monitoring player behavior and then offering similar content. "This is more of an in-game marketing experience where you're getting instant updates."

"In the old days, you just had to upload a demo to AOL's games section and everyone who was online would see it. Then the Internet fragmented the audience and it became harder to get those eyeballs," said Colin Smith, vice president of Freeverse Software.

"This opens the console world to some independent developers who could never afford to make an Xbox game otherwise, and it will provide the Xbox with some more casual and arcade-type niche games that consoles have been missing," said Smith with regard to the effect the Xbox Live Arcade system might have for both marketing and future development of game titles.

The Live Arcade architecture could be more permissive for smaller developers, who would otherwise need to run up against policies established by the larger game developers and retail channels. The ability to sign on with a partner, distribute a game to them, have them market it through an effective channel and be able to update the game through that channel has long been the dream of developers.

It might be closer to coming true.

Copyright 2005 by United Press International