[Satellite News 07-14-09] Microsoft’s deal with BSkyB, which will bring Sky Player satellite TV content to broadband-enabled Xbox 360 video game consoles in the United Kingdom and Ireland, was a significant deal for both parties and perhaps an indicator of things to come in terms of innovative broadcast partnerships involving the satellite industry, Neil Thompson, senior regional director, Northern Europe, Entertainment & Devices Division, Microsoft, told Satellite News.
    Thompson discussed Microsoft’s ambitions in its partnership with BSkyB and the changing role of satellite in integrated video game entertainment.

Satellite News: Would you describe the BSkyB partnership as a landmark deal for Microsoft?

Thompson: I think this is a landmark deal. It is the first time that live TV has been brought onto a console platform, and it is a real indication of the way digital media is going, where both ourselves and Sky are looking to offer as much choice to consumers as we can and this allows us both to look at our customers and offer them a more complete service than what we were offering before at a holistic entertainment level. It is unique on Xbox. There are no other countries offering this service yet on the Xbox platform worldwide. I think it is a pretty innovative step for us.

Satellite News: How important is video content in terms of overall Microsoft Xbox strategy?

Thompson: Any true games console in the market today has to offer a broad-ranging entertainment package. You have to have compelling gaming content and you have to have compelling TV, movies and music content to give people the opportunity to connect with their friends and family through social mechanisms and environment. When you combine these things together, you have a console platform that is very powerful, which is why we will continue to add these sorts of services to the platform and evolve the platform over time.
When we set out on the Xbox journey originally, we always said we weren’t going to evolve our consoles through plastic moudings and new sizes. Their evolution was going to be about how we use software and services to change that experience for consumers on an ongoing basis. The consoles you buy today will be different from the ones you buy in one-to-two years time because we will update the software and services. That is pretty essential in today’s market as consumers have ever-increasing demands and are looking for more innovative ways of enjoying entertainment.

Satellite News: Do you expect the deal with BSkyB to boost sales of both the Xbox and the Sky Player service?

Thompson: We believe this is going to be a compelling offering for people that are currently on the Xbox platform, which much to people’s misunderstanding, is a broad ranging demographic of people. It is young, old, male and female. Over the last few years, we have broadened out the types of consumers who enjoy the entertainment on Xbox. We think it is going to be very appealing to those customers and give them a different choice than the one they have now. As new customers evaluate consoles, we think this gives us a compelling advantage over our competitors. For us, it is a very exciting addition to the reasons why people will come to our platform.
   

Satellite News: How does video fit into the new multimedia gaming console market battleground?

Thompson: While video is certainly a compelling area that we think consumers value, the gaming and social interactive experiences are going to be core as to why people buy games consoles. If you going to be competitive in today’s world, you need a very rounded entertainment offering, so from that sense, video is a piece of a puzzle you need to be offering. I think everybody who is in the entertainment business understands there is a level of convergence happening between the world of gaming, the world of music, TV, movies, etc. In terms of what people offer on platform, a lot of people are going to migrate around those elements and figure out where is the compelling difference of where I can stand out.
    One of the unique things about we have done with Sky is people will now be able to get Sky Sports on a monthly subscription. Our customers can now create parties on Sky Sports where up to eight people can watch a game together in the virtual world and interact in that virtual world. That is where it is very interesting for console companies to figure out how we bring the social element of online gaming into the world of broader entertainment such as movies, music, radio, etc. I think that is where this convergence becomes really interesting, where these console companies like Microsoft are bringing a unique twist to this entertainment offering and that is what will change perceptions on how we consume certain types of entertainment.

Satellite News: Is Microsoft now in competition with set-top box providers?

Thompson: No. I think what this does is offer consumers one more choice. Different consumers want different things in different ways. Consumers like to have different choices. Sometimes they like to have a mix of technologies on one platform. I think this fundamentally is about consumer choice, and they will be the ones that tell us when we get it right and when we don’t.

Satellite News: Do you think we will see more partnerships between Xbox and satellite players in other regions?

Thompson: I think it will depend market by market, but obviously in all of our key markets we are looking at how we enhance what we bring to Xbox live and the services we can offer. Based on a market situation will be the type of content and the type of companies we will be going after. But I am absolutely sure you will hear more from us about new partners in the coming years around the world. I can’t go into specifics but we want to offer this sort of entertainment service to all of our customers around the world. It is a question of how fast we can move with different partners in different geographies.