The XBOX 360 had a very well thought out marketing campaign (not just "by Microsoft standards"). There was deep recognition that we were going to need to sell basically the same hardware for 5 years to make the economics work out and we would talk a lot about what to do at "first holiday" and so on.

The decision was made to release a video service and my team was charged with all the back end stuff - encoding, streaming, DRM, charging money, etc. It was pretty controversial at the time because some of the gaming folks saw every minute spent on entertainment as a minute not spent on gaming.

One of the bigger fights I had internally (and lost) at the time was over the use of Microsoft points. Somehow Microsoft convinced itself that to denominate online purchases in currency would open us to banking regulation and so we were forced to use this made up currency to denominate everything. (Apple and Amazon had recently come to the opposite conclusion, allowing you to keep money "in your account" without the sky falling, but Microsoft went the other way.)

The scheme had all the downsides of a real currency (like needing to do long division to figure out what anything cost) but none of the upsides. (Like the exchange rates were fixed between points and all major currencies so as those currencies inevitably moved, our pricing became more and more wrong.)

Ultimately Microsoft saw the error of its ways and the service (now called XBOX Video) thrives.


Engadget - HD movies, TV shows coming to Xbox Live

"Microsoft is bringing HD-quality movies to the 360 without requiring the purchase of the external HD DVD drive."

Engadget - Microsoft's Scott Henson on TV and movies

"With the Zune being launched shortly, there’s no better time than now to take a quick stroll through its native software. It’s pretty, but has a lot of functionality as well"

Engadget - Xbox Live Video Marketplace is live

"Happy birthday Xbox 360! For your first birthday, daddy got you something really cool ... downloadable movies and television shows!"