The Future of EntertainmentShawn McMichaelInteractive Entertainment BusinessMicrosoft Corporation

“ The brief history of living room entertainment…

... and the death of engagement?”

“What happened?

From here… …to here?

• More content choice (genre and access)• Less parental control of content consumption• Social interactions include people outside the home• Gaming competing with media • Reduced attention spans

“ How will the living room change moving forward?

Linear, Hit Driven

Remote Control as Interface

Low ParentalControl

Isolated, Passive Experience

Anonymous Experiences

On Demand, Hits + Niche

Multiple Rich Interfaces

Higher Parental Control

Integration of Social, Gaming, TV

Cross-Platform ID

CONTENT CONSUMPTION

DOMINANT INTERFACE

PARENTAL CONTROL

SOCIAL INTERACTION

VIEWER IDENTIFICATION

AREA FROM TO

Two areas of “non-change”: (1) Declining attention spans (2) Continued ad avoidance

Case Study: The Evolution of Entertainment on Xbox

30

28

26

24

22

20

18

16

14

12

10

8

6

4

2

Tota

l M

em

bers

(in

Mill

ions)

available in morethan 26 countries

launched in2 countries

1 vs 100

“ Case Study: Game Shows Meets Social Media

“1 vs 100” with on Xbox Live

“ Case Study: Television Meets Social Media

“Party Mode” with SkyTV

“ Cast Study: Linking User Identity Across Screens

ACHIEVEMENT UNLOCKED

Avatars

Friends

Achievements

Great Games

Xbox LIVE on Windows Phone 7

9

Audience evolution

10