Changing the Way People Buy: Physical to Digital on Xbox LIVE   Ben Smith Director of Program Management  Xbox 360 - Xbox ...
In the beginning…
Part 1: A simple story about a man and his horse…
And the people spoke…
and voted with their wallets
Lessons <ul><li>People will buy digital goods, even if they don’t have intrinsic value </li></ul><ul><li>Most people would...
Part 2: Plastic guitars that mint money http://www.joystiq.com/2009/03/26/npd-rock-band-surpassed-1b-in-retail-sales-in-no...
Experience + Microtransactions = $$$ <ul><li>According to NPD, by March, 2007 both Rock Band and Guitar Hero passed  $1B  ...
Lessons <ul><li>Existence proof that a viable business model in console gaming that relies  as much or more  on digital ad...
Part 3: The Map Pack Revolution
Call of Duty MW2 Stimulus Package
Lessons <ul><li>Digital is a real, viable channel on its own </li></ul><ul><li>Be prepared for unbelievable demand </li></...
Part 4: Power of Pint-size People
Lessons <ul><li>People love to express themselves – it about “me” and “who I am” </li></ul><ul><li>Be ok with being playfu...
So what? <ul><li>Future is very digital  </li></ul><ul><li>Virtual is less virtual everyday  </li></ul><ul><li>Still have ...
The Final Word
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Ben Smith\'s Changing the Way People Buy: Physical to Digital on Xbox LIVE at Virtual Goods Summit West

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Ben Smith\'s Changing the Way People Buy: Physical to Digital on Xbox LIVE at Virtual Goods Summit West

  1. 1. Changing the Way People Buy: Physical to Digital on Xbox LIVE Ben Smith Director of Program Management Xbox 360 - Xbox LIVE - Kinect [email_address]
  2. 2. In the beginning…
  3. 3. Part 1: A simple story about a man and his horse…
  4. 4. And the people spoke…
  5. 5. and voted with their wallets
  6. 6. Lessons <ul><li>People will buy digital goods, even if they don’t have intrinsic value </li></ul><ul><li>Most people would prefer in-game items that have value in the game </li></ul><ul><li>People were/are still developing their digital-value instincts </li></ul><ul><li>The is money to be made and customers to make happy </li></ul>
  7. 7. Part 2: Plastic guitars that mint money http://www.joystiq.com/2009/03/26/npd-rock-band-surpassed-1b-in-retail-sales-in-north-america/
  8. 8. Experience + Microtransactions = $$$ <ul><li>According to NPD, by March, 2007 both Rock Band and Guitar Hero passed $1B in sales. </li></ul><ul><li>In 2008-2009 Rock Band topped Xbox 360 in: </li></ul><ul><ul><li>add-on revenue </li></ul></ul><ul><ul><li>downloads </li></ul></ul><ul><ul><li>More downloads that the rest of the Top 10 combined </li></ul></ul>
  9. 9. Lessons <ul><li>Existence proof that a viable business model in console gaming that relies as much or more on digital add-on sales than physical media </li></ul><ul><li>Content matters, especially having content people love </li></ul><ul><li>You can build a franchise online within console gaming </li></ul>
  10. 10. Part 3: The Map Pack Revolution
  11. 11. Call of Duty MW2 Stimulus Package
  12. 12. Lessons <ul><li>Digital is a real, viable channel on its own </li></ul><ul><li>Be prepared for unbelievable demand </li></ul><ul><li>Just because you aren’t worried about supply chain problems, doesn’t mean you won’t have capacity issues </li></ul>
  13. 13. Part 4: Power of Pint-size People
  14. 14. Lessons <ul><li>People love to express themselves – it about “me” and “who I am” </li></ul><ul><li>Be ok with being playful </li></ul><ul><li>The uncanny valley is not a fun place </li></ul><ul><li>Hardcore gamers aren’t immune from expressing themselves if you let them “drive” </li></ul>
  15. 15. So what? <ul><li>Future is very digital </li></ul><ul><li>Virtual is less virtual everyday </li></ul><ul><li>Still have a lot to figure out: </li></ul><ul><ul><li>DRM policies and technology </li></ul></ul><ul><ul><li>Value/Price balance in mainstream markets </li></ul></ul><ul><ul><li>Interesting twists – scarcity, limited edition, transfer, time expiration, rental, etc…. </li></ul></ul><ul><ul><li>Fraud and other unfun topics </li></ul></ul><ul><ul><li>How micro can you go? </li></ul></ul>
  16. 16. The Final Word
  17. 17. Thank you!

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