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Windows Phone 7: Could Mobile Gaming Be Microsoft’s Ticket?

Yesterday Microsoft released Windows Phone 7, the company’s latest attempt to gain a foothold in the mobile space. With the smartphone market already dominated by Apple, Google, and RIM, some people are saying it might be too late for Microsoft. But could mobile gaming be its ticket?

While Microsoft only has a 3% share of the smartphone market now, it does have experience in disrupting the market when video gaming is involved. Remember, in the 1990s the video gaming market was controlled by three Japanese companies—Nintendo, Sony, and Sega. Then in 2001 Microsoft came out of nowhere to release the Xbox. The next year it introduced online social gaming to American households with its network Xbox LIVE.

If you had told me back then that Microsoft would become a big player in the video game console wars, I would have never believed you. But the Xbox 360 has outsold the Sony Playstation 3 for years, and this year it finally caught up with the Nintendo Wii to tie as the best-selling console of 2010.

Xbox LIVE is the backbone of the gaming experience on Windows Phone 7. Your gamertag (gaming identity), friends list, and gaming achievements are all available on the device. With more than 23 million members, LIVE is one of the best online gaming experiences you can get. Instead of playing a game alone, you can play online with your sister who lives across the country or with friends down the street. It makes gaming social, which is just plain fun.

Does Apple, RIM, or Google have anything like Xbox LIVE in place? Not yet.

There are a ton of great games available for the iPhone and iPad, but Apple’s social gaming network, Game Center, is just getting off the ground. Apple could implement features similar to Xbox LIVE, but it could be awhile before they are able to rival the LIVE community.

RIM is all about business. There are some games for the BlackBerry, but RIM probably won’t even attempt a gaming network.

Google hasn’t announced any plans for an Android gaming network, but not long ago, Engadget broke the news that Sony is working on a Playstation Phone rumored to be based on the Android operating system. A Playstation Phone would be able to play the massive back catalog of Playstation 2 titles and tap into the Playstation Network, Sony’s gaming network. While this could be a big gaming move for Google’s Android, the Playstation Phone is currently just a prototype and may never be seen by consumers.

If Microsoft wants to increase its smartphone market share, it should push it hard on the gaming front, where it now has an advantage. The smartphone is clearly the new gaming device. A recent Nielsen study found that 61% of surveyed smartphone users had bought and played a game in the last month. Mobile social gaming is the next logical step. The network effect is powerful, as are gaming addictions. If Microsoft is smart it will use LIVE as a disruptor again.

Brian Johnson is a recent graduate of the MCDM program with an interest in video gaming and social media. His Xbox LIVE gamertag is thepiecesfit. His favorite video game is “The Legend of Zelda: Ocarina of Time.”

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This post is categorized in: Gaming

21 Responses to Windows Phone 7: Could Mobile Gaming Be Microsoft’s Ticket?

  1. Ko Yun Tsai (Coco) says:

    I totally agree that gaming on mobile is definitely a killer. Since I have my iPhone, I can’t stop downloading any kinds of game apps from apple store. I always glad to pay money if the games are attractive. I also tried social games on iPhone called “We Rule” and crushed on it for several months. Hence I could image how people will be addicted to Xbox LIVE experience on Windows phone 7. However, I am not sure if consumers really want to change their habit to purchase the phone because of its added value such as gaming application? (Take myself as an example, I am used to use iPhone UI and maybe hard to change the behavior…) I believe that the added value must be strong enough to pull me out of the comfortable world.

  2. mepriestley says:

    Yeah, I totally agree with you on a lot of counts. I’m a Playstation fan myself, but the one thing that excited me about the Windows phone is hearing that they were going to tie in with XBox LIVE. I’m not about to go out and buy and XBox and I’m not about to buy a Windows phone, but I think it’s a strong push towards making gaming even more mainstream and that’s exciting. Yes, Apple is a lot about gaming as well as all the other apps, but it’s mostly geared for quick or social and it’s anything but mixing in the usual games that attract hardcore gamers – Game Center, for example, is a joke.

    I’ve been on top of mobile updates for Microsoft and Sony and as much as I hate to admit it, I would love to see a Playstation Phone with the Android OS. It would be the perfect marriage of my current phone choice and my gaming choice. I had a PSP and I can run game system emulators on my Droid, but I can only imagine the possibilities of a PS Phone with Android. For that reason alone, I hope that Microsoft is successful with their mobile gaming push – even if it takes other companies a little while to catch up.

    Now the only question I have is where the heck are they holding the long-lasting batteries that are going to be needed to get people to actually use their phones for more network/battery intensive apps?

  3. Kelly McIvor says:

    I, too, agree that the gaming aspect of Windows Phone 7 provides a potential advantage. Gaming on mobile phones, however, isn’t like gaming on a console. Not only is the experience very different but the users are different, too. Currently mobile gaming is more popular among women and they are playing casual and puzzle games. Consoles are the primary domain of men who are involved in more complex games such as first-person shooters and RPG. I think MS’s success in mobile gaming will be to provide a good mobile experience for the console gamers but that isn’t who main mobile gamer is today. They have some work to do.

  4. mepriestley says:

    Agreed. They definitely have to strike a balance between the hardcore console gamers and the usual casual mobile gamers, but they can do that simply with a variety of offerings, couldn’t they? I mean, it was the same thing with the console… you have to balance FPS/MMO games with an offering of casual games (not only for the casual gamers in general, but for young children and families).

  5. Marina Ferrer says:

    I think that this is a very good positioning strategy. Nowadays Windows is losing brand image and customers against Apple and Google. In this context seems that Windows is not the only player any more, although this product could help to relaunch the brand again. I think that they found what it could be its competitive advantage against Iphone or Android. Right now every time that I think about iphone I associated it with cool, trendy images. If Windows positioning its phone well, customers will be associated Windows phone with mobile games and they could be the leader on that field. But they will have to focus on that position very hard if play station is going to work with RIM.

  6. Debbie Hinck says:

    Mobile phones + Xbox LIVE + Arcade Games = WIN!!!! As an avid console gamer with dwindling amounts of free time, I find myself lumped in with the growing number of casual gamers in the world. The prospect of bringing my Xbox LIVE community with me on mundane errands and on bus rides thrills me. My moments of micro-boredom will now have a skosh more meaning.

    From a business perspective, Microsoft may have hit the sweet spot. With the popularity of casual gaming skyrocketing across all demographics, Microsoft’s introduction of a mobile OS that combines a strong casual gaming platform with the social aspect of Xbox LIVE is extremely potent and well timed.

    As Brian mentions, the market is not yet saturated with social casual gaming platforms. At this point in time, the only other major player is Facebook, a company with which Microsoft is already partnering. Sony may be looking to launch a gaming solution with Android, but the growing rivalry and animosity between Facebook and Google may be a factor in that product’s success. I don’t know what the future plans may hold, but the combination of Xbox LIVE and Facebook on a single mobile OS is a potent combination for mobile social gaming.

  7. Thanks for all of the comments! Great discussion and good ideas flowing here.

    Kelly makes a good point about gaming demographics. While casual gamers and hardcore gamers don’t overlap much, I think LIVE is the kind of thing that can bring the ecosystem together. I’m hoping Microsoft really develops LIVE for the Windows Phone 7 as I think it will really “tie the room together.”

    If anything, it will be interesting to see how gaming networks develop for smartphones over the next couple of years.

  8. Thanks for posting this Brian! I’ve been working on the WP7 campaign for over a year now through my agency and just ordered an HD7 last night. Microsoft seems to be heavily invested in this launch and doing everything possible to stay relevant in the mobile market. MS should be credited with bringing several innovative ideas to market. Even if the platform were to flop, consumers will still benefit from the increased competition.

    Currently the focus seems to be on getting developers to build apps which is something that has become increasingly more difficult as more platforms emerge. I’m very curious to see if the momentum builds to the point that current developers feel the need to have their apps run on WP7 phones.

    I hadn’t yet heard that Sony may be working with the Google on a Playstation/Android phone but I think that could be a huge game changer for both companies as they compliment each other nicely.

  9. Thanks for the kind words Corey. It does feel like MS really is putting everything behind this product. Apps will play a key role so it will be interesting to see how that aspect of the Phone 7 plays out.

    As far as a Playstation Phone, I doubt that Google would have much of a hand in it. Android would be a good base to build a gaming phone from, but the gaming side of it would be all Sony and they would control the gaming network. That is pure speculation, but its my best guess.

  10. Jim Hong says:

    I think games on mobile platforms are truly a strong value prop, and being able to augment your gamertag info with mobile data just adds value to the gamertag since it provide yet another data stream.

    But, I’m not entirely sure multiplayer gaming is going to be overly huge on mobile. At least, not synchronous multiplayer gaming. The way people play mobile games is very different than the way people play traditional console or PC games. Mobile games have a very short engagement duration, though people may come back to them multiple times during the day. This is because people use them as filler time or quick distractions, not as dedicated gaming sessions. The overhead of having “live” multiplayer interactions is too large, IMO.

    That said, asynchronous games like Scrabble, Words With Friends, Chess, etc. that allow you to take a turn and then wait for your friend to take their turn do well, but that’s because these kinds of games do not alter the usage pattern of single player mobile games. I suppose this kind of game could be brokered by Xbox Live so that turns, points, achievement, and history is tracked there, but that doesn’t feel to me like a reason to jump platforms. The mobile games have to be great, but I wonder if there will be any real exclusivity for really hot properties (you can already see Angry Birds hit every platform imaginable).

  11. I like your line of thinking Jim. I totally agree that gaming takes on a different form on mobile phones. As you mentioned, certain game types work way better than others, e.g. turn based vs. FPS. The current situation of having to friend people in each different game you want to play is cumbersome. A gaming network fixes that problem, but to get that kind of integration, I think you’d have to do it at the OS level.

    I’m hopeful that some bright game designers will explore different game mechanics to see what works on mobile phones.

  12. James says:

    Hi Brian, Nice post, I’m definitely a casual gamer on my iphone but saw a friends developer version of this new windows phone with the xbox live app (or is it just a feature?) – and my cursory thought was it’s pretty sweet. I’m not the target demographic of hardcore gamer who needs to be constantly connected to the gaming experience, but I can see there being a large market for it. I agree with Kelly that the UI of a mobile seems too limiting for the robust game experience, but it’ll be interesting to see how big this gets.

  13. hector says:

    check out mimvi games at: http://www.mimvigames.com

  14. Alison Fiorito says:

    Unlike other posters here, I am a casual gamer and part of the growing gaming demographic (women 40-50) of Facebook. This is a fantastic move on the part of MS and I agree that it could really up the MS market share in the smart phone. The list of games that Jim mentioned and the reasons why people play them describe exactly what occurs in my life and what I observe in the lives of other busy moms.

    Many of us who are casual gamers have a very limited amount of time for playing (as Debbie noted: “dwindling amounts of free time”) because of work and family demands. We often need games with a “very short engagement duration” as Jim describes. While I may distract myself with a game on the bus, or while waiting for offspring at karate class, I also see lots of moms handing phones to younger children to entertain them while we all wait. I’m not advocating the use of high end technology by toddlers or promoting them as a chew toy, I am however, reporting what I see. Moms have a lot of buying power; and we LOVE getting as much done as we can while carrying as few items as possible. There is nothing like winning a game of scrabble, or just stopping the crying for a while so that you can breathe that makes the day a whole lot sunnier…and games have a lot of power to do that.

    From my perspective, games that I can play with friends/family (Scrabble, words with friends etc.) make smart phones FUN!

  15. joepavey says:

    This is an interesting article Brian, and folks have really added to the conversation with great trail of comments. I agree with you that Microsoft has definitely brought some its most successful and exciting properties together with Windows Phone 7, and that integration of Xbox Live definitely adds value to the platform.

    This addition of Xbox Live to the mobile gaming experience has been a long time coming. I remember hearing Bill Gates talk about Live gaming being great for mobile way back when the rebranding first took place.

    One thing troubles me though: Is it too late? The demographic that own Xbox 360 consoles are likely to already be invested in a particular smartphone platform as well. And to the casual gaming market (who are likely not to have upgraded to a smartphone yet), the addition of Live won’t represent much of a lure. These folks won’t know (or care) that Xbox LIve is entrenched and that Game Center is something new. They’re only likely to try the platform out once they’ve already bought the device.

    Will the lure of better mobile gaming be enough to make anyone switch? Only time will tell. But if Microsoft had been able to get this out the door a year ago, before Apple launched Game Center, this could have been huge. But at this point, it seems like an incredibly polished addition, that most folks will see merely as feature parity.

  16. Wow. You guys are really bringing it in the comments!

    @James – You said you aren’t in the target demographic, the hardcore gamer, but I think that is a misconception. I think initially, the xbox and LIVE were all about hardcore gamers. Now, though, there are hardcore gamers still, but MS has made significant inroads on casual gaming, with things like the Avatars and Kinect.

    @Alison – That is some good stuff there. Smartphones really do cater to different audiences. You need to have a good gaming network that can work in multiple ways.

    @Joe – Bill Gates did lay out some big picture stuff a long time ago. It is good to see some of those ideas coming to life. I don’t think it is too late. There are tons and tons of people who still don’t have smartphones. Gaming might not be enough to get people to switch, but is a very strong selling point. Time will tell.

  17. Corey Murata says:

    The combination of a mobile gaming platform + geolocation + a large existing Xbox LIVE community (not to mention a company with some deep pockets) leads to all kinds of possibilities. The current crop of GPS-based games do not have the benefit of such a large existing user base or linkage to an existing game universe.
    I don’t think mobile gaming is going to always be limited to standalone casual games. We just haven’t seen yet what can be done with a robust platform and lots and lots of users. And, I don’t think hard-core gamers will be left out either. These are people that used to load up their cars to go to LAN parties. Give them a game that they can play on their mobile with their friends and works seamlessly with an Xbox and you could start to see a whole new kind of multi-player gaming experience.

  18. dtkwakye says:

    Personally I am resolutely not a gamer but with the advent of iphone and ipad, and the Apps that are available have slowly influenced my paradigm. Having been using smart phones for a while now, I find myself downloading and playing games on my smart phones whether it’d Android or on an IOS, I am gamed. Having Xbox on Window 7 mobile would definitely reach out to niche markets – consumers such as myself who revel in smart phones but not necessary a hard-core gamer. Having the ability to play games on the go definitely works better for me because hardly would you find me transfixed at home playing Xbox 360 or any other console games. My life, and other’s like me is jam-packed. But if we can play a game whilst let’s say waiting in line, or riding a bus or waiting in a departure lounge because my plane is delayed, then I am more likely to make use of my idle time playing games on my smart phone. I know I am not alone on this and as such, I believe this would be a huge success. A smart move on MS side to incorporate XBOX on win7 phones.

    One more point about Xbox 360 success. Lets not forget that it lost money (billions) every year for three years before breaking even.

  19. Josh Samson says:

    Nice thoughts on Xbox Live being the possible disruptor to the smartphone market for Microsoft. Clearly that’s the thinking in only releasing XBL on Windows Phone 7. I think it’s a big gamble on Microsoft’s part to restrict the mobile version of its very successful service to their own devices. While it has the potential to help generate phone sales, it could be detrimental to the XBL brand – that would be a double whammy for MS. If the new Windows phones end up grabbing a larger percentage of the market (and I hope they do, despite being committed to the iOS platform), then it will be a win/win in promoting two important Microsoft brands. However, if the phones fail to catch on in a big way – it could end up hurting the Xbox brand. Mobile is becoming an increasingly important space and gaming will play a big role. If WP7 struggles, Microsoft must bring XBL to the other mobile operating systems. Their customers are already out there (25 million Gold subscribers) but if XBL can’t reach them, they could easily move on.

  20. Ivan Orbegozo says:

    What a great article Brian! According to Oct. 2010 data from The Nielsen Company, 29.7 percent of U.S. mobile subscribers now own smartphones that run full operating systems. Windows Phone 7 certainly has a competitive advantage in having Xbox LIVE as a backbone on gaming experience in comparison with other smartphones in the market. According to Facebook Windows Phone 7 (WP7) app there are almost 131K users of Facebook for WP7 which means that Microsoft and its preferred partners only sold approximately 131k WP7 smartphones since the official launch. This is not good news for the Microsoft marketing team that spent about $100 million for the WM7 launching campaign.
    I completely agree with your article in regards that Microsoft must push it hard on the gaming front to be able to grab more market shares in the US and worldwide. They need to implement it fast because companies like Apple, RIM, or Google do not have that competitive advantage yet.

  21. Zanna Braziul says:

    Hi Brian,

    Thank you so much for leading me to this posting. It was a great posting and I am glad that it took me a while to get to it so I was able to read the great comments that our friends made before me. I love the fact that Microsoft is finding a niche and is willing to capitalize with the success of XBox. Many people use their mobile devices in the spare time for gaming but it was just something that was seeing as a secondary feature. Great job Microsoft!!!

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