E3 2011 Analysis: Microsoft Press Conference

So the Internet hated Microsoft’s 2011 E3 press conference. Like, really hated it. NeoGaffers and games press professionals alike were fed up with the attention Microsoft gave to Kinect titles. The show opened with several high-profile third-party titles (Modern Warfare 3, Tomb Raider, Mass Effect 3, Ghost Recon) and Kinect even snuck its way into a couple of those presentations.

As someone who loves video games, sure, I was disappointed. From a business perspective, however, this conference included announcements that are sheer genius and will help Microsoft continue its recent successes.

There are a  few main points I want to make here:

1. This press conference wasn’t for you

Microsoft doesn’t care about you, Mr. Hardcore gamer. They’ve got you hooked. Hooked by achievements, Xbox Live and friends lists. You love games and you’re going to buy them no matter what. They don’t need to “win E3” to win your allegiance. If you own an Xbox, they’ve already got it.

Microsoft does care about finding markets to enable the Xbox’s base to grow and the keys to that are expanding the 360’s non-gaming functionality and Kinect’s library. That’s why the majority of the conference were dedicated to those two things.

You may not care about Kinect Star Wars, that Disney game or Sesame Street, but I guarantee you there are of millions of families that will. If I had seen Star Wars when I was about 10, I probably would shit my pants with excitement.

Expanding the 360’s media functionality, which will soon include live television, is equally as important. We recently got numbers indicating that approximately 40% of all 360 usage comes from non-gaming applications. Microsoft wants the Xbox to compete with Apple TV, Boxee and Roku and by combining the applications that are already announced with Kinect and Bing functionality, it’s not hard to see people picking up Xboxes as the center of their digital entertainment life.

These two strategies — expanding Kinect and building entertainment options — allow Microsoft to pursue markets relatively untapped by the Xbox brand and that’s exactly what they need to do.

2. So why show me this crap at E3 if it’s not for me?

Well, that’s a harder question. The best answer is that this is the Xbox brand’s biggest stage.

At no point in the year are eyes more focused on the game industry. If a mainstream consumer is the target audience, then mainstream media is the target method of communication. Microsoft needs headlines in USA Today and Entertainment Weekly, not IGN or Gamespot. Partnering with behemoths like Disney, Star Wars and UFC is definitely a way to break out of the enthusiast press, as we’ve already seen with Entertainment Weekly’s tech blog breaking the Star Wars story.

E3 is by no means the best venue for this though. Microsoft might benefit from establishing two press events; perhaps one on the weekend prior to E3 designed specifically for larger outlets and aimed at the Kinect audience while devoting their real E3 press conference to “core” titles. But then what do you do with games like Fable: The Journey? Maybe feature them at both? Who knows?

3. The third-party is king

The press conference offered only one non-Kinect, first-party demo, Gears of War 3. While of course this is a bit disappointing, it’s just another signifier of the changes this industry is facing.

At this point in what has become an extended console cycle, first-party titles just aren’t that important. They were always the top tier games, the things used to attract consumers to a specific console,  but people are locked in place at this point. They either own a 360, a PS3 or both. And while first-party titles are still often great games, they have most definitely been superceded as the best by products coming from third-parties.

In this way, first-party games are really losing their luster. I’m not saying they aren’t important, but maintaining relationships with third-parties is definitely a higher priority than producing exclusives (just ask Nintendo).

This press conference really drove this point home. Microsoft doesn’t need stellar first-party lineups year after year. They can rely on the masses of blockbuster third-party titles and concentrate on expanding their install base into new markets.

Conclusion: Microsoft is staying the course

All of the stuff I’ve outlined so far is part of the greater 360 plan. Microsoft is going expand their audience, rest on the wealth of third-party support they receive and hammer out the requisite first-party titles when necessary. They’ve seen success with this plan thus far. At this point they’ll just ride it out until the launch of their next console. The better question is: what happens then?

There is definitely a chance that Microsoft will push a little too far with Kinect and alienate the “core” even further, not a good group of people to piss off when a new console is imminent. For now though, this direction will likely continue to yield positive results for them. It definitely seems like a diminishing returns situation, however, and in terms of encouraging developers to take risks and create something worthwhile, it’s in no way helping. Except for Sesame Street. That shit looks magical.


Images via NeoGaf

About Matt Gerardi
Matt Gerardi is a journalist and musician. He also happens to write about video games.

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