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Microsoft opens LA studio to develop custom content

Xbox is center of their content strategy
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Microsoft has some big original content plans of its own and it will center around the Xbox game console, a device that's becoming less about games and more about streaming content.

Hulu Plus has been producing compelling original content for a couple of years. Netflix joined the parade with its new series "House of Cards," which I wrote about in my Editor's Corner recently. Now, PCMag.com is reporting that Microsoft has opened a studio in Los Angeles with the goal of producing its own content. 

Microsoft (NASDAQ: MSFT) reports that there  are now 76 million Xbox 360 consoles around the world and a third of them have the Kinnect sensor connected. The new studio, called Xbox Entertainment Studios, will be charged with producing interactive content for the Xbox system. Microsoft has hired former CBS executive Nancy Tellem as president of entertainment and digital media at Microsoft, and she has some big plans.

In an article written by Microsoft PR, Tellem said she envisioned a new, more interactive way of watching television. "When I worked in traditional TV, we would find ourselves saying things like 'Wouldn't it be cool if we could add an interactive aspect directly into the show and engage directly with the viewers?'" That's what she intends to do with the programming produced for the Xbox--and when you consider the Kinnect, it brings this idea to a new level.

The goal here is to find new ways to get advertisers involved in the Xbox system, and if Microsoft can use the entertainment they produce to monetize all those xBoxes out there, it could be a lucrative and creative revenue stream for a company that has seen its primary Windows-Office revenue model under attack from cloud and mobile, as people buy fewer PCs and look for other ways to access the Internet and get work done.

This is an intriguing idea, but it really depends on how well they execute on the big budget and high expectations. With so many devices and companies competing for our entertainment attention, even with great content and all those Xboxes, it's going to be a challenge. But with that many devices in place, it's definitely a gamble worth taking.

For more information:
- see the Microsoft xBox entertainment article

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