Xbox 360: MS' Marketing Machine

Not even Raymond is getting as much love from everybody as the Xbox 360. It looks like this will sell a lot of consoles for Microsoft and games for its partners, but the bigger picture is the Xbox 360 as a vehicle for online commerce. This is after all, the first product launch since Microsoft said it has awoken to the Google marketing reality of ad-supported services.

Microsoft has enhanced its Xbox Live service to address the problem of micro-payment transactions by offering Microsoft Points. Players pre-pay for a block of points and can spend them in sub-dollar increments. Now gamers can download a skin, game map or arcade game at their leisure, and the sellers don't have to worry about paying the credit card company transaction fees.

Points cards (like phone cards) can be purchased at retail, which makes it easy for credit card-less minors to buy stuff online. Microsoft will give out Points through future promotions such as game contests, which gamers will have to spend with them, so it's no money lost.

I bet that sometime soon Xbox 360 gamers will be able to collect points by watching advertisements, and games will also be able to redeem points through third party services (MS already says hardware is a possibility). One likely scenario would be free online games that feature ads for pizza delivery, which users could click on and use points to order. No phone calls or credit card transactions necessary, so hands can stay on the game pad!

The Live Marketpalce offers a free Silver membership, which will be a good place to watch how Microsoft uses ads in the gaming experience. Players will also be able to buy points with each other, adding yet another layer to the commerce possibilities. The Xbox 360 should be renamed Xbox 365, 'cause that's how many days a year it will be used to market to gamers.