Xbox 360 as Video Platform– Will It Work?

So now we pretty much know why Microsoft is doggedly pushing ahead with plans to make a Halo movie, even after two studios balked at the budget, and the unlikelihood of such a movie making any money at the box office. It will almost certainly be the topline content for Xbox Live Marketplace, the new ITunes-style movie/TV download service for Xbox 360 owners announced yesterday. Last month I speculated about “Halo movie trailers and excerpts downloadable only on Xbox Live”, but clearly I wasn’t thinking big enough. No, Xbox commandant Peter Moore is looking forward to a time when millions of Xbox Live subscribers will download the entire movie to their 20 gig hard drives, either in standard TV resolution, which will take up a fifth of the drive, or in HDTV format, which will suck up most of that space, and take up half the day, to acquire.

That last point is probably the biggest stumbling block to Xbox Live Marketplace succeeding:

With just 20 gigs in the console’s standard hard drive set-up, you’re talking about 10 TV episodes, or five movies, or one high definition movie 10 high definition TV episodes or five HD movies. Most gamers can churn through that content in days. Then comes the painful decision of deleting several movies or TV shows you paid $1.99-$5.99 to download onto your hard drive (Microsoft is still mum on the pricing, except that it’ll be competitive with existing services) to make room for more.

That’s not to mention Microsoft’s past history with digital rights management extremism with the Xbox, already onerous when it comes to ripping music files, which will surely grow even more strict, when the MPAA brings its attorneys into play. A service that isn’t as seamless as ITunes (of for that matter, YouTube), is destined to failure.

All that to one side, it’s still a strong move on Microsoft’s part, beating out the other consoles on that front, even catching them flat-footed. “We haven’t announced any content besides games,” a befuddled-sounding spokesman for Sony Computer Entertainment America told the Times, when asked to comment on the news, “but all the executives have said that downloading other entertainment content is something the Playstation 3 capable of doing.” (As a statement, it’s on a par with the kid who watches Tony Hawk pull off an amazing stunt, then asserts, “I could do that, I just don’t want to.”)

A Sony statement sent to Next Gen is somewhat more measured, but about as, well, desperate, playing up the fact that Xbox 360 is sold in both non-hard drive and hard drive configurations. “We would never segregate or shut out any of our consumers from our entertainment experience because they didn’t buy the top of the line system”, the peculiarly self-righteous announcement sniffs. It’s always unseemly when an international corporation apes the language of the civil rights movement– especially when PS3’s price point of $599 doesn’t exactly make it the Rosa Parks of consoles. And we’re about to find out just how much Xbox Live Marketplace drives consumers to buy the hard drive configuration. My guess is, it’s a deal-sealer.

Update, 4:56pm:  Corrected an estimate of Xbox 360’s download capacity.  Also, GigaOM reader Kevin C. Tofel sends along word that there will be no Zune support for new Xbox Live Videos.  (Zune is essentially Microsoft’s answer to the iPod/iTunes.)  “Got the official word from Microsoft and this surprises me,” he writes. “HDTV and movie content over broadband to your 360: great! No re-encoding and transport to Zune: not so great (unless you’re Apple)! I’d bet a Zune player that this will change inside of 60 to 90 days.”