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Interview: Xbox Live on

Kevin Kelly

By now, you're aware of the news that is coming to Xbox Live, along with Twitter and Facebook in a social media onslaught. We wanted to find out what that means for the service, so we spoke with Orlena Yeung, VP of Marketing at (which was purchased by CBS two years ago for a big chunk of change), and Christina DeRosa, a general manager for Xbox Live, to find out how the experience will work on our consoles.

We've already reported on the planned pricing, but read on after the break for DeRosa's take on the Xbox side of things, including her thoughts on a Pandora partnership, how Xbox will enhance (Party Mode?), and where the service fits into the Xbox Live music channel that's in the works. (One interesting note: Xbox says that the console won't audio scrobble, while says it will. We've reached out to both parties in search of a definitive answer.)

Update: Microsoft got back to us with the following information, "We circled back on this one and can confirm that music played in other parts of the dash will not be scrobbled. In other words, you can't put in an audio CD and scrobble." So, that's a bit of a bummer.

Gallery: (Xbox 360) | 9 Photos

When we spoke with Orlena, she mentioned that Microsoft was working on the interface and deciding what will actually be on the Xbox. How is that going?

It is a collaboration between the two companies, to be honest with you. We do have a development team here that is driving the development of it, because it utilizes a propriety code base to integrate into the Xbox Live dash. But we are doing it hand in hand with the people because we want to bring the service alive in a way that is consistent with their brand and their offering.

As far as working together on the graphical interface on the Xbox side, did that start in earnest once this announcement was made? Had it already been underway?

Early on in our conversations we always do traditional design. You start with pencil sketches on a piece of paper and move through that with them. So it followed a similar path for these guys. To get to E3 we had to do some iterations before that. So it was probably two or three months of time that we were working with these guys beforehand in terms of what we were going to show and make sure it was functioning for the show.

Is the thought on Xbox's end that you will be able to access this while you are playing games, or will you only be able to experience it in the Dashboard? will not run in the backgrounds of other Xbox Live activities, you need to be in the application.

You will be able to access it in the Dashboard. We are going to launch a music channel later this fall of which is one of the premier partners we will be placing in the music channel. Basically you will be able to get quick and easy access from the music channel into But it will not run in the backgrounds of other Xbox Live activities, you need to be in the application for it to run. So we are making sure the experience is very visually appealing and immersive, because it will be an experience that you stay in and listen to music.

Will there be any sort of integration with your Xbox friends list because currently you have to have an account on to use the service?

You will still need to set up a profile and be a member of their community to access the app. But one of the benefits of that is we will have access to a great community not only on the Xbox, but we will also be able to marry that to the community and enlarge the social circle, if you will, of people utilizing our services.

Services like Netflix Watch Instantly are limited to North America. Is that going to be the same with or will it be available in other regions?

With we are initially planning to initially launch in the US and the UK. And then we are going to work with them regionally on that.

Do you guys have an exclusive deal in place with Could you could turn around tomorrow and make a deal with Pandora to also bring its service to Xbox, which is very similar?

I think part of what our due diligence was in partnering with was to look at all the partners that were in this genre, if you will, and able for us to work with. During that selection process we decided that was the first partner that we really wanted to work with, and we are very focused on that partnership right now.

That is not to say neither they nor us will look for other partnerships in the future. But right now our primary focusing is to on boarding them into our platform in the right way.

What was particularly attractive about

I think had usage scenarios that we thought were applicable to a living room usage. We also looked at their usage in terms of data through Comscore, and they had a very high affinity for their brand and the user base that they had. They also had services that were not only US based. So they did have international offerings that will become applicable if and when we move into other markets together.

Will the service be available to all users or will you need a Gold account to access

The Silver users will be able to access what we are considering a trial of 3 hours a month of the service, which comes with video advertising. The Gold users will have unlimited, ad-supported access. So they can use it 24 hours a day if they like. Then there will also be a premium offering, which will be on a subscription basis from that will be commercial free and also have more sophisticated features. Things like Loved Tracks will be part of that offering as well.

The premium subscription is something you would need to purchase through, not through Xbox?

You will be able to access it through Xbox. You will need to subscribe directly through for that. They have different business models in different markets, but they do have superscription services.

So it would be priced similar to what already has on its website, or will the Xbox version be a new offering?

You are going to have to ask them because it is their business model.

We've only seen the handful of screens that were shown at the Microsoft keynote at E3. Do those represent a placeholder interface? Is it already finalized, what we saw, or is it changing? How is that visual experience coming along?

To be honest with you, I am not that close to it day to day. I am sure it is evolving because we pulled that together pretty quickly for E3. I would assume that we tried to at least with that have the integrity of the brand and something they were comfortable with. So we didn't go there and show stuff that was uncomfortable with.

Assume that what we launch this fall will be dramatically better than what we showed at E3.

However, as with any service, we will work and evolve it day to do. And I would assume that what we launch this fall will be dramatically better than what we showed at E3.

One of the most attractive things about is that it tracks your music even if you are not on the service actively using it. You can use plugins to audio scrobble from iTunes, for example. The Xbox has the ability to play CDs and to rip tracks to the hard drive. Will the application be able to audio scrobble what you are listening to on your own system?

Not that I know of. I don't believe so. I think what we are doing is importing in features that already exist on the service. There will be complimentary music capabilities on Xbox that exist today, so we are not eradicating those. But I don't think we are going to integrate them either for the first phase.

PlayStation 3 users point out that it has a full web browser that can access How do you guys counter that? What is the thinking at Xbox?

I think we have different strategies overall -- the two platforms -- which I think is the beauty of it. We are headed in two different directions, to an extent, so the consumer can make a choice over what experience is more meaningful to them. We have chosen a path where we want to bring high quality, high value, and hand crafted experiences to our users and integrate them in a way that is very social and interactive to the platform.

That is the path we have chosen to take. It is a different path, but it is the one that we believe in. We are really about creating the ultimate social entertainment platform. And part of doing that means you need video and music content, because those are genres that are really important to the audience that we serve.

The little bit we saw with music in terms of just music games like Rock Band and Guitar Hero on the platform, where we sold about 76 million tracks for those two games, led us to believe there is a pent up demand for music offerings on the console, which is how we began this path and charter to look at music as a genre and how we bring that to life on the console.

That is why we are so confident that this is going to really do well with our audience.

You were talking about interactivity and social media. With, while you can look at your friends and see what they have been listening to and everything, for the most part, the experience is passive. You're selecting music or the service has learned what music you like, and then you play the music. Are you guys doing anything to change that, or are you leaving the core experience the same?

One of the things that Xbox will bring is Party Mode, where up to seven friends can listen to music simultaneously.

I think one of the things that Xbox will bring is Party Mode, which is something that is unique to our platform, where you and up to seven friends can listen to music simultaneously. So you all can basically have and have the same track playing at the same time with your Avatars present and having emotes and those types of things going on, which is a similar type of feature we are bringing to Netflix.

What we like to do is take what could be considered ubiquitous content and create unique experiences and interactions on the Xbox; to just take that same viewing or listening experience and make it better. That is really what we strive to achieve. And I think we will do the same with

Could you support events where a band or musician like, say, Blink 182 invites you to Party Mode to listen with them? That seems like an interesting opportunity.

Yeah, it is. What you will see, probably in August, we have done a revamp to Party Mode utilizing our Avatars that you will see come to life later in the summer. Part of the beauty of this evolving software is that you can always improve, do things better, or make next generations of it, much like the web.

So for us, any of our baseline features, we always innovate on and continue to make better, so that will improve the functionality, because we have seen that it has stickiness and usage amongst our audience. So we know that it is a feature they like to embrace. So we try to improve it and make it better for them.

Was all of the social media interaction announced at the keynote being discussed and worked out at the same time? Or was it added in stages?'s Orlena Yeung said it happened fairly quickly.

Well, I think there is planning. Part of what we do now is plan what we want to see in a platform 12-18 months from now. There is a huge process that goes on in terms of who the consumer audience is, how that is going to change, the composition change, what is important to them, what behaviors are we seeing in the content and the usage of the console. We try to design a roadmap to map to our customer, ultimately.

Then we look at partners that can bring to life gaps in the plan. Then we go out and talk to those partners. For us, we try to be nimble and quick, obviously, and entrepreneurial. This is a very entrepreneurial group, the Xbox group, so I am happy that Orlena thinks it is quick and easy. That is the best thing you can hear from a partner.

Right, you don't want to hear partners complaining about how arduous the process has been.

But nothing is a surprise. Everything is with intention. We have a lot of people knock on our doors. That is wonderful because I think we are a platform people want to be in and be associated with, and have their brands represented within. However, we want to make sure it makes sense in terms of our strategic roadmap.

So all of those things were part of it. Social is a huge piece of how a generation that is very important to us communicates with each other. At the end of the day, we want to be a wonderful social platform. Facebook and Twitter are two brands that are critical to positioning yourself that way.

And music is a genre of entertainment that is important to that generation as well, so we needed music partners. Everything is done with thought, and we hope that we can move quickly enough for our partners to take advantage of the opportunities when they are there.

When the service is on the Dashboard, and let's say I pull up my friends list, will it just say a person is using, or will it give more data, like specific track information? Would you be able to select a friend, and then get some of their music streamed through your own app?

It will probably work similar to how it works today. So if you go to the Friends channel, you can see what friends are online and what they are doing. If they are in Netflix, it shows you the movie that they are watching, typically. [Editors' note: Currently, you can't see specific details about what your friends are watching through the Netflix app, but it's assumed that the Fall 2009 update will change that.]

I don't think we are in the dev process right now at to say what is going to show up in the Friends channel. I don't know if I have that level of clarity for you today. I think for us, we want awareness that your friends are using the app. What exactly they will see, I really can't tell you yet.

The Xbox Live Marketplace sells music videos, and you mentioned that Xbox is launching a music channel. offers some videos via its web service. How are those going to work together, if at all?

Well wants visual accompaniments based on whatever rights they could relay over to us to round out the experience. So we will have to see what type of content they want to port over to us to round out the experience. I think it is about, at the end of the day, listening to personalized music and developing an experience that makes that compelling on the TV. That is what we are really striving to do.

It is not designed to be Marketplace excelling transactional content. It is with different intentions.

You said there are plans to launch a music channel later. Will it be like a Zune Marketplace or iTunes kind of place where people will be able to buy music for their Xbox?

We are really looking to do both and then also music track stores with our music games like Guitar Hero and Rock Band. So that is what the music channel composition will be.

So then it's not full-fledged like the Zune Marketplace, for example, where you can buy a track for 99 cents and download it to your MP3 player? This is a different functionality?

Correct. It will be just a music track functionality for the transactional stores.

When people talk about internet streaming radio, Pandora tends to be the name that gets mentioned the most. Are you doing anything on the Xbox side to build awareness of ?

We are looking to do and also music track stores with our music games.

I think just like any service that comes on the Xbox, we do in-dash messaging to make sure our users are aware of new features that we bring. We make sure that we do messaging and .com through our CRM tools. We will do the same for, because it is a value that we are bringing to our customers at the end of the day. So for Gold subscribers, this is a value add. They don't have to pay anything incremental and they get access to a customized radio station.

Our users tend to trust us and tend to engage in our experiences because we have such a loyal following and member base. So if anything, I think, we will probably over deliver in terms of usage scenarios than expected, which is common for our base. Our base is very involved in the platform. We have a very high engagement level. That is not something we fear or worry about. At the same time, we want to make sure we let people now that it is there for their usage.

On the site, will a user's friends be identified as Xbox Live subscribers? That would seem like a good way to meet other Xbox Live members and gamers.

I have to direct you to because that would be iterating on their product platform. That would be more of them deciding that they wanted to implement that information from us. seems a bit limited in its ability to integrate social media features into the rest of the Xbox experience. But for Twitter and Facebook, is there a plan for development on the Xbox side to allow these services to enhance gaming? For instance, let's say you've just made the ultiamte choice in Fable II. Is there any thought with game developers to have that info broadcast on your Twitter or Facebook account?

I think that part of what we are going to talk to Facebook about is how do we utilize their Facebook Connect functionality in a way that makes sense for us. So again, we have a commitment to have that dialogue with them. I don't think we are ready to talk about anything we are doing there, though.

Are you all aiming to have all three of these services --, Twitter and Facebook -- come out simultaneously, or is there a different schedule for each product?

I don't think we are final yet, to be honest with you. So we will probably make announcements in terms of launch timing when we are closer to finalization.

But Fall is still the target release window for these updates?


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