Gaming is serious business, and Microsoft knows it

Gaming is serious business, and Microsoft knows it

Summary: It's all connected: Microsoft shifts Web services talent to its gaming and entertainment division.

TOPICS: Mobility

ZDNet colleague Mary Jo Foley reports that three Microsoft Web services brains -- including Dave Treadwell, Joe Long and Don Box (SOAP guru, and a star in the Web services and SOA space) -- may be engaged in Microsoft's Interactive Entertainment Business (IEB), the part of Microsoft that currently encompasses the Xbox/gaming; IPTV; Media Center; Zune; and mobile communications businesses.

Mary Jo, who probably knows more about the inner workings of Microsoft than Steve Ballmer, could only speculate on why these chaps are in Xbox land. Perhaps they're involved in gaming, perhaps digital home connectivity, or perhaps something new altogether.  (A couple of readers offer that their work may involve Live Mesh.)

But one thing is certain: gaming and associated online entertainment have become big, big, business -- and may have more influence over innovation and productivity investments than the actual military itself. And computer gaming itself has become a huge sector of the economy.

Keys to the kingdom? Microsoft Xbox joystick and console. (Photo credit: Wikipedia.)

Keys to the economic kingdom? Microsoft Xbox joystick and console. (Photo credit: Wikipedia.)

A recent survey of 755 Internet users conducted by the Pew Research Center confirms the economic viability of the game business: 19 percent of respondents said they had purchased online games in the most recent quarter. Considering the fact that there are about two billion Internet users across the globe, that translates into one big, big market.

A new report from the Texas Comptroller of Public Accounts says that the computer and video game industry created more full time jobs in the past two years than any other moving image entertainment sector.

Writing in The Wall Street Journal, Andy Kessler makes the point that the military and defense spending were the locus of the US economy for decades. Now, it appears the ground has shifted. Rather than military spending, the foundation of innovation and productivity investment is now based on electronic games.

Even the military is following suit, he observes, noting that piloting and navigation systems are likely to be modeled after game consoles.  Witness the pilotless drones being employed across the world, controlled by joysticks and video screens.

The user interfaces developed for gaming eventually find their way into the corporate world as productivity-enhancing tools, productivity is what drives our economy onward and upward. “Much as keyboards and mice and fast graphics have driven corporate productivity for 40 years… the next decades will be driven by tools that can harness voices and gestures,” says Kessler. Gaming technology has stolen the show here.

There is plenty of evidence that adoption of computer games is on the rise within the corporate sector. As reported by my colleague Heather Clancy just this past October, IBM launched CityOne, an interactive simulation exercise focused on business and civic leaders. There are more than 100 different development scenarios built into the “game,” focused on traffic congestion, saving water, supply chain optimization, green power choices and so on.

Last year, ZDNet/SmartPlanet colleague Heather Clancy talked about how some of the world’s biggest and most successful companies are encouraging management candidates to participate in business simulations to build the skills they need for their next step up the corporate ladder. Companies such as including Nokia, Accenture, Sony, Phillips, Rolls-Royce, Novartis, Ernst & Young, KPMG, IBM, Hewlett-Packard and Cisco are encouraging up-and-coming management candidates to participate in such an experience, the BTS Global Business Tournament, to build the skills they need for their next step up the corporate ladder.

There is enormous educational value, in fact. Last summer, a survey of more than 200 medical students at the University of Michigan and University of Wisconsin at Madison, reported in CNET, founds that 77 percent say they would participate in a multiplayer online health care simulator if said simulator helped them accomplish an important goal.

Consider also the convergence that is taking place between gaming, entertainment, online services, and the cloud. Chris Nuttall, writing in The Financial Times, observes that the set-top box and console for computer games may soon be going the way of the VCR — being replaced by online games that are streamed to consumers from cloud data centers.

Nuttall reports that online game companies such as OnLive, Playcast, and GameTree TV are beginning to stream games to consumers in early markets. While computer games already use the Internet to bring competitors together from around the world, we may soon be able to partake in them without the hardware, cartridges, and disks. As Nuttall put it: "Although it enhances them now, the Internet could soon make these devices obsolete… the PC box can go and little more than a monitor, keyboard and mouse are needed.”

Another interesting twist that I’ve also observed is that games themselves are serving as gateways to the Internet. The Wii system itself, for example, can serve as a front-end device for surfing the Internet, though not quite as agile as a mobile or PC. Either way, the convergence is coming on strong.

It's all connected.

Topic: Mobility

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  • May be Mary Jo should applied for the CEO position that will be opening up

    "Mary Jo, who probably knows more about the inner workings of Microsoft than Steve Ballmer..."
    • Good one

      @iPad-awan - HA! That would be a cool idea. Then we could have Ed Bott as head of the Platforms Division, Paul Thurrott as head of the Business Division & Adrian Kingsley as head of the Entertainment & Devices division
  • Gaming is serious business, and Microsoft knows it

    it is a LIE.

    For Microsoft, the gaming market is equal to less than 3% of the entire business, including several years of negative balance. Plus, during 2009 and 2010, Microsoft closed some in-house game studio and put-on-ice some franchises.

    And the Natal/Kinect marketing flop does not help at all, remember that Microsoft spend *a lot of money* for a revolution but received a warm welcome with some nice (but not enough) sales during xmas and nothing more.

    Microsoft is more interested in the "live service" rather in the whole concept of sell consoles and games, they want live for PC (already present but for free), for console (done), for cellphone (done) and for personal device (and done).
    • RE: Gaming is serious business, and Microsoft knows it


      "kinect marketing flop". Surely you don't believe what you write so that means you're just another troll.
    • RE: Gaming is serious business, and Microsoft knows it

      What? You do know the kinect has set sales records world wide of all time killing sony numbers and nintendo which has no chance? The kinect was sold out at almost every store it was in. Matter of fact here in Chicago i happen to be out yesterday and 3 store I went into were sold out again of the units. Thats a failure??Gaming is moving away from consoles and Microsoft knows a huge online community is the money maker. look at a company just starting like .
    • RE: Gaming is serious business, and Microsoft knows it

      @magallanes Ahhh, 8 million KINECT units since early November, outselling the iPad 2:1 over an equal number of days. You're just not paying attention. And, I don't even have mine yet. But, I will have one now that every review gives the KINECT good-to-excellent marks. It is clearly a winner, and marketing (as well as user feedback) certainly had something to do with its early success in sales.
    • RE: Gaming is serious business, and Microsoft knows it

      so are you here just to generate traffic for this article with some good old fashion flame war because your assertions are about as educated as my pet rock's knowledge of technology.
  • Microsoft owns gaming and interactive entertainment

    "Microsoft knows it" -- that's an understatement!<br><br>Xbox is the leading gaming platform. Xbox has been the best-selling console for the past six months. All the best games are out on Xbox first. Game studios know that Xbox is the only platform where they are well-protected from piracy. PC is the only other serious gaming platform. Microsoft also operates Microsoft Game Studios which is at the bleeding edge of interactive entertainment technology, and partners directly with and nurturs the undisputed best in genre game studios like Bungie and Lionhead. Microsoft also has Kinect.<br><br>Why did you use a picture of the old last-generation Xbox console, the Xbox 2? Xbox 360 has been out for years, and now we have the new slim Xbox 360.<br><br>E.g. The <a href="">Halo Reach skinned limited-edition slim console!</a><br><br><br>Also, look to <a href="" target="_blank">Xbox-exclusive games like Halo, developed in partnership with Microsoft, and the buzz around each individual launch</a>!<br><br>And consider the <a href="" target="_blank">pioneering cool stuff MS and their partners are doing with the web and web service APIs</a>!<br><br>Xbox LIVE and associated services available directly on the console, including Zune, Sky Movies, Sky Sports,, Facebook, Twitter, etc -- this is a truly awesome business proposition! And LIVE is fully integrated with MIcrosoft's mobile platform, Windows Phone 7.
    Tim Acheson
  • RE: Gaming is serious business, and Microsoft knows it


    "the kinect marketing flop"

    Are you aware that Kinect sold 2,5 MILLION units in the first twenty five DAYS? It was the number one gadget last Xmas!
    Tim Acheson
    • And yet, now days we hear absolutly nothing about the kinect.

      @Tim Acheson

      The shiny rubbed off the kinect by new years eve... We don't hear anything about it now days. The reason it because it never had any "wow", only the illusion of wow thanks to Nintendo. Funny thing is, Craiglist, right now, has tons of people trying to sell their kinect.. Why.. Because it sucks... Over the past month I have had a ton of kinect owners ask me if I knew of any cool games to play with the kinect. The problem is, there are none. I also advise them they may not want to have it connected unless they are playing a game with it as it is a web cam aimed directly at their couch. (that always shocks them for some reason). But then again, they were dumb enough to have bought a kinect... LOL.
      • RE: Gaming is serious business, and Microsoft knows it

        you just aren't paying attention then. Kinect is everywhere. you can see commercials on TV constantly. There are almost daily stories of how the kinect technology is being hacked for new and different purposes. Microsoft is working on PC versions.
        One thing you are partially correct about, when playing online multi-player the Kinect microphone is always on. They need to have an easy off switch for this.
      • RE: Gaming is serious business, and Microsoft knows it

        ummmm no. Are you not aware of all the Mods to kinect by a forming community? Have you even looked at some of the stuff that they are developing? Its incredible. Thats why there is a sdk for kinect. Its going beyond gaming fast with no competition. But thanks for trolling.
  • RE: Gaming is serious business, and Microsoft knows it

    Gaming is something that Microsoft has always gotten and it as well as openness are the two biggest reasons Windows prevailed over Apple.
  • RE: Gaming is serious business, and Microsoft knows it

    I think the PC market is more saturated than the game console market.