This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Microsoft Still a Long Way From Home

But that hasn't stopped Microsoft from adding new features to its online-gaming platform, Xbox Live, to move closer toward the single-device ideal. Among them: a new marketplace for online commerce and the ability to handle micropayments for features that gamers can build onto their games.

To date, however, online gaming has attracted a small audience. Xbox Live counts only 2 million subscribers, or about 10% of total Xbox owners. Although Xbox Live is widely viewed as a more powerful platform than rival Sony's (SNE - Get Report) online gaming effort for Play Station, Sony's has far more users, with 2.5 million registered in North America alone.

While the larger number of Play Stations sold partially explains this difference, there's another key difference between Microsoft and Sony's online strategy: Microsoft has been charging $49.99 for an annual subscription to Xbox Live while Sony has offered its online platform for free.

"Certainly what we found in our research is that cost was a huge barrier to entry," says Molly Smith, senior director of brand development and communication for Sony Computer Entertainment America.

Microsoft apparently came to the same conclusion, as it's adding a free "silver" tier of Xbox Live to the $49.99 gold membership, which offers additional content and the multiplayer online gaming.

It's still a subject of debate, however, whether online gaming will move beyond a niche market that attracts only hard-core gamers. Wedbush Morgan analyst Michael Pachter argues that playing video games is primarily a solitary activity, like other forms of entertainment, such as reading a book and watching TV.

"You don't want to interact with other people -- we do that all day long," Pachter argues. "Microsoft is wrong: Everybody doesn't want to be online all the time."

But David Riley, senior marketing manager for NPD Group, disagrees. A recent NPD survey of gamers found that they're spending more time playing online compared with last year, and they're more willing to pay for online play. In particular, NPD highlighted an increase in woman and teens playing Xbox Live.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CMCSA $60.25 -1.20%
MSFT $47.04 -0.86%
SNE $26.47 0.19%
AAPL $111.37 1.70%
GOOG $642.61 0.54%


Chart of I:DJI
DOW 17,044.30 -6.45 -0.04%
S&P 500 2,013.43 +15.91 0.80%
NASDAQ 4,821.3610 +10.5730 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs