Microsoft, Epic Strike Deal for Music, Video Content for Xbox Live

Microsoft inked a deal with Epic Records that will give Xbox Live users a year’s worth of free access to downloadable music and high-definition on-demand video from Epic artists.

Xbox Live is the online, interactive portion of the Xbox 360 gaming platform that debuted last year as the first of what is expected to be a wave of next-generation consoles that offer multi-media and Internet capabilities.

More Than Just Games

The Epic partnership highlights those capabilities and the fact that the Xbox is the first such device to be widely available. Rival Sony said this week it would delay the launch of its PlayStation 3 and Nintendo’s next-generation gaming box, known as Revolution, is not expected to debut until later this year.

The free feeds from Epic will feature up-and-coming music artists, with one new artist featured each month for a year with free music downloads and high-definition video clips.

“Our goal has always been to make Xbox Live a cutting-edge entertainment experience,” said Peter Moore, corporate vice president of the Interactive Entertainment Business at Microsoft. “This agreement with Epic Records offers our members exclusive artistic content directly from the source.”

The partnership, he added, provides “exactly what music-loving gamers want: brand-new, exclusive music videos that can be downloaded quickly, easily and free of charge.”

Everybody Plays

Gaming and music have long had a symbiotic relationship, with both most popular among younger users.

“The fusion of music and video games now plays a significant role in breaking artists and enhancing the video game experience,” said Epic Records President Charlie Walk. “Through this alliance, Epic and Xbox show that we are in one business — exciting young adults and leading them to the art of discovery.”

The Artist of the Month program will launch with British singer-songwriter Natasha Bedingfield, whose current single, “Unwritten,” is among the top songs in terms of downloads from the iTunes Music Store.

Microsoft said it will also promote a “Game with Fame” feature that gives Xbox Live members a chance to play online games against music artists and other celebrities, a move meant to highlight the interactive capabilities of the console and to entice users to sign up for the subscription-based Xbox Live service.

The deal comes just days after Microsoft announced plans for a free test weekend for its Xbox Live service through Verizon, another effort to get gamers to test the premium service and the Xbox’ higher-end features.

Making Hay

Microsoft is likely eager to capitalize on the window of opportunity it has to capture as many gamers as possible for its Xbox 360 and Xbox Live platforms before rivals such as Sony and Nintendo are able to bring their consoles to market.

Interactive gaming is expected to boom in coming years and Microsoft has positioned itself at the cutting edge of that trend. For instance, it recently announced that it had secured a patent — the 5,000th in Microsoft’s history — for a method of allowing spectators to watch live online gaming contests.

Yankee Group analyst Michael Goodman told the E-Commerce Times that the sizeable investments Microsoft has made in Xbox Live — he estimates the development cost to be at least US$200 million — gives it additional motivation for capturing an audience quickly.

“Broadening the appeal by adding new content is a way to hook in the non hardcore gamers,” he said, noting that only about 10 percent of the original Xbox owners ever signed up for the Xbox Live service.

Parks Associates estimates the online gaming market was worth about $1.6 billion in 2005 and is on track for steady growth for the next several years, reaching $4 billion — making it larger than online music — by 2010. Much of that growth is expected to come soon.

“This year will be a watershed for delivering to consumers an array of new entertainment experiences,” said Kurt Scherf, vice president and principal analyst at Parks. “Thanks to broadband proliferation and growing cooperation between content producers and other members of the digital entertainment value chain, we’ll see significant product and service announcements throughout 2006.”

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