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Lessons in Inevitability

Xbox One and Nielsen?

The other day we were taking a tour of the Nielsen’s Tampa Bay facilities to see how they worked and get a look at their impressive Tampa campus (fancy).  Throughout the tour one thing kept bothering me.

It was an Xbox Kinect used as a showpiece next to Nielsen’s own face tracking hardware.

See, there’s this baffling new device Microsoft is bringing to market this fall.  It’s called the Xbox one.  They’ve been quiet on it for the longest time, but with the E3, the Electronic Entertainment Expo coming up, they’ve started to open up a little.

We’ve known for a while that the system might be bundled with their Kinect peripheral (a gaming accessory tracking voice and physical movements), but the rest of the company’s choices were even more confusing.  The system never turns off.  It has to connect to the internet every twenty four hours.  There is no longer such a thing as a used game, just a game license on a disk.4  Every time they step out to make another press release they send core customers into a foaming rage.

But a pattern is starting to emerge.  There is an HDMI out port for output to a television, but there is also an input port, so that you can throttle your DVR through the system.  Microsoft consoles have always had internet access, but the new model promises to be even more akin to a computer than ever, certainly allowing convenient access to Netflix and other online video.  It even plays Blu-ray DVD’s, coming ever closer to Microsoft’s dream of selling people on an all in one entertainment device.

While the Xbox One is placed to insinuate its way into the heart of your living room, it is also built to keep tabs on you. The new Xbox encourages gamers to log in to their account at others houses by allowing easy access to any game on the account.  Perhaps most important is the Kinect integration.  The system turns on via voice controls, and it recognizes who is speaking.  It can detect your posture your heartbeat2, who is holding its controllers3, see in the dark, and Microsoft claims to be working on emotions.  This is a machine designed to mine its users for as much context relevant data as Microsoft can get without an x-ray.

With this wealth of information, it seems unlikely, that Microsoft will be unable to somehow monetize it.  A program of a fairly rudimentary nature should be able to associate the warm bodies and vocalizations in front of the screen with the details stored in a gamer tag.  And while Microsoft says that the system sensors can be put to sleep, how many people will remember to do that?  Microsoft claims the current user agreement precludes the use of targeted advertising, but there are plenty of loopholes to that, even if they don’t outright change their minds.  Gathering Nielsen data would be one such loophole.

Whoever jumps this claim will have a couple ways to go about it.  Consumers have shown they are willing to accept a fair bit of data mining for the sake of a good product, take Google Chrome for example.  Any heavily Microsoft affiliated element could offer something as simple as free or cheapened Xbox live to appropriately randomized participants and would likely snare a majority of selected customers. The other way to go about it would be to offer the machine itself as collateral.  Retrofit a number of systems with Microsoft’s approval and give them away with the addendum that they must be left connected for at least five or so years in lieu of a balance owed by the user.  This modification should require little more than a specially designed program, and short of open hostility by Microsoft’s software engineers would be an available avenue to any start up or third party who was interested in the data.

When we asked, Nielsen indicated the company would not likely pursue the technology.  They expressed an unease in being at the tender mercy of another company for data.  But this might be too good an opportunity to pass up. According to their own figures, 26%of American households had an Xbox 360 in 2012, with an install base of 70 some million worldwide6,7.  Given the five to seven year average console life cycle, that number fluctuates, but in the same time period, Nielsen’s People Meters were in only 20 thousand homes or 0.02% of the total U.S. households.  In fact, both Microsoft and Sony are forecasting to surpass previous generation sales.  While they could be overly optimistic, even keeping pace would net 10 million devices in homes within two and a half years.5  Providing a wealth of possible targets fifty percent larger than the current Nielsen household total.

This seems like a situation too ripe to be left unexploited.  At the very least, a more diversified portfolio should allow monitors to catch data that falls through the cracks in other systems.  The Xbox targets a fairly wide range of demographics at current, and a weighted trawl of their customer base could be a very informative method of the modern American viewership habits.

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