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Xbox Cinema   by George Jugaru

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WHEN the dust finally settled on the 2006 holiday buying season, American consumers -- who braved long lines, cold weather and possibly a few kicks to the shins -- had spent $3.7 billion on new video-game consoles and software. And while the more than two million youngsters (and not-so-youngsters) who discovered a next-generation gaming system under the Christmas tree -- a Microsoft Xbox 360, a Sony PlayStation 3 or a Nintendo Wii -- represent a substantial user base for these platforms, they mean even more to the entertainment industry as a whole. To the makers of these video-game systems and to a growing number of film and television studios, they represent a significant new audience for full-length movies and television shows that can be downloaded directly to gaming consoles.
In late November Microsoft began expanding the library on its Xbox Live network, a broadband service available by subscription to Xbox 360 owners. In addition to the video-game trailers and playable demonstrations that the network has traditionally offered, you can now find an eclectically selected collection of films and television shows offered for downloading to a console's hard drive: for a few dollars you can view "Mission: Impossible III" or "Chinatown" or the episode of "Chappelle's Show" with the blind white supremacist, on your television, just as if you were watching a DVD or a video-on-demand channel.

For gamers with top-shelf home-theater setups, Xbox Live also offers content in high definition: download the HD version of the "Star Trek" episode "Mirror, Mirror," in which the Enterprise crew is accidentally beamed into a malevolent alternate reality, and you can practically count each strand of hair in evil Mr. Spock's goatee. This month XBox Live will offer a new view of the corpulent form of Eric Cartman when it becomes the first outlet ever to offer an episode of "South Park" in high definition.

While Microsoft acknowledges that most consumers are buying Xbox 360s primarily, if not solely, to play video games, the company also sees an opportunity to use film and television content to draw an audience that doesn't fit the stereotypical gamer profile.

"The original Xbox was probably the domain of that testosterone-fueled male in the household, and while we love him to death, we also want his little brother and sister and mom and dad and their friends to be able to enjoy it," said Peter Moore, corporate vice president of Microsoft's interactive entertainment business division.

To that end Microsoft spent several months negotiating with Hollywood studios and television networks, including Warner Brothers, Paramount, CBS and MTV, to secure a broad variety of programming before rolling out the expanded Xbox Live service.

Although more than 4.5 million Xbox 360s have been sold, and some 60 percent of owners are connected to Xbox Live, the network's audience will not make broadcast television or movie theaters obsolete any time soon. Yet the kind of content most abundantly available on the network -- goofy comedies like "Nacho Libre" and "Zoolander," clips of Nascar races and adventure films like "Mad Max 2: The Road Warrior" -- clearly indicates whom Microsoft expects to make the most use of it: men in their 20s and 30s with enough disposable income to buy lots of video games.

"This guy is typically not going to the movies, and more often than not he's not watching television, he's playing games in the living room," Mr. Moore said. "He's a difficult person to get to in the first place."

It is Xbox Live's potential to deliver such a narrowly defined and increasingly difficult-to-reach demographic that makes it so enticing to the entertainment industry. "This is, to a large extent, an entirely new audience for us," said Steve Beeks, the president of Lionsgate, an independent studio whose library includes horror movies like "The Descent" and the "Saw" franchise and which recently announced it would make its films available for download on Xbox Live. "These are active buyers of games, but we don't believe they've been active buyers of movies. We're turning them into consumers of films."

For television networks whose programming appears on the service, Xbox Live offers the additional benefit of a precise metric to determine how many gamers are downloading their shows and how many are then seeking out these shows on broadcast television.
"We're gauging how different clips translate into what kind of pickup in viewership we get and what kind of buzz we're getting on the blogs," said Dennis Quinn, Turner Broadcasting's executive vice president for business development. "If they're watching a six-minute clip of 'Robot Chicken,' is that translating into a greater sampling of the network show? If we see older shows like 'Harvey Birdman' picking up again, what does that mean for people who produce the content?"
At least one of Microsoft's competitors is also preparing to enter this digital arena. Sony's PlayStation 3, which comes with the ability to play high-definition Blu-ray DVDs, also allows gamers to connect to Sony's own broadband network. Right now that network doesn't offer much more than video-game demos and movie trailers, but that will soon change.

"As long as you're downloading a trailer, what's to stop us from offering the entire program, whether it's a movie or a TV show?" said Peter Dille, the senior vice president for marketing for Sony Computer Entertainment America. "Being part of Sony Corporation, with a film entertainment company as a sister company and a music company at arm's length, the world is our oyster in many respects."

For the moment Nintendo has no immediate plans to make film and television programming available for its Wii game console, which also lets gamers connect to an Internet-based network of content channels. But the company did not rule out the possibility.

"There's a lot of plans we have for the channels," said Perrin Kaplan, Nintendo's vice president for marketing. "And there are ways that they could be used that we haven't yet really conceived of."

Though Microsoft is the only gaming company to provide a substantial content library (roughly 100 movies and several hundred television episodes so far), some gamers feel the offerings are too limited to encourage them to use the feature regularly.

"Until you feel like it's a pretty comprehensive list where you can look up just about anything, it's not a service that I think most people will use," said Dan Hsu, editor in chief of Electronic Gaming Monthly magazine. "You can just go, 'Well, maybe I'll check the iTunes music store or nbc.com and see if they have the shows that I want.' "

Other industry executives say the current push to provide entertainment content has more to do with satisfying console manufacturers' needs than with fulfilling gamers' demands.

"For this round of consoles it makes total sense that they have to focus on entertainment," said Ricardo Sanchez, an executive at GameTap, a service that lets subscribers play console and arcade games on their personal computers. "For Sony I've got to believe the PS3 is as much about establishing Blu-ray as it is about selling games. On the Microsoft side they're betting so much on Xbox Live that they'll do practically anything to drive awareness and interest in it."

At the same time, Mr. Sanchez said, "I don't see them spending a lot of effort, beyond just aggregating content you can get elsewhere."

Most gamers understand that in exchange for the ability to watch "South Park" reruns on demand, they are giving the console makers something: a valuable piece of real estate in their home-theater cabinets that a DVD player or stereo receiver might otherwise occupy. That bargain is especially precious for Microsoft, which is still better known as a monolithic software company than a trusted manufacturer of home electronics.

"This is following years of Bill Gates wanting to pursue something around a set-top box," said Josh Larson, the director of the video-game Web site GameSpot.com. "It's kind of a Trojan horse into the living room."

But as media ploys go, Mr. Larson would rather download his movies from Xbox Live than from PC-based services like Movielink or Amazon.com's Unbox. "Is it more likely for a gamer that you're going to download from iTunes and hook your PC up to your TV set?" he asked. "Or a couple button-pushes and you're watching it in a way that you're used to watching that content? I think that's pretty powerful."

Despite the enduring perception that his company is seeking to conquer the universe, Mr. Moore said Microsoft was looking only to provide an audience of savvy, affluent media consumers with the kind of products they want in the way they've grown accustomed to consuming them. "In my case," he said, "I very rarely watch live television anymore. Shows like 'Lost,' I'll wait for the DVD, thank you, rather than have to see it chopped up into five-minute increments with four minutes of commercials. In today's world we don't have appointment viewing anymore."

More recently, Mr. Moore said, he was looking to catch up on some recent episodes of "CSI" -- in high-definition, preferably -- and sure enough, the only place he could find them was on Xbox Live. "I live in Seattle," he explained, "and I have DirecTV. They don't put the local networks on in high-def."
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