My boss's boss's boss, Senior VP and Chief Xbox Officer Robbie Bach, was at CES, keynoting the iHollywood Digital Game Summit. Later in the day, his boss, Bill Gates, gave the CES keynote.
There is an approach you need to create a platform for Microsoft, our partners, retailers, and others to bring these experiences to life. At the center of that, obviously for us, is the PC. As you'll hear in Bill's keynote tonight, we are very excited about the Media Center PC. The fundamental work it can play in the home, as a centerpiece, for what can happen in the home. Not just as a productivity tool, it can certainly be that, but as a gateway to manage the network, your interactions on the Internet, and store your media to deliver it to where you want it when you want it. The challenge for us is to make that easy for people to do. It can't be a job. It has to be something that works like other appliances in your home.
It is about software and services because in the end, all the hardware, networking, and plumbing, if you will, in the home isn't what's interesting. What is interesting is what people interact with and the things that are going to make this an easier and better experience for people.
This is still a business that is very young and immature. We like to talk about it as being as big as the movie industry but that is a little figment of the numbers. Yeah, video games may total some of the same numbers as what the movie industry generates at the box office. However, when you add the video sales, rentals, and all other ancillary revenue streaks, we still are a very young industry. ... If we want to grow as an industry we have to find ways to interact with other forms of entertainment, music, video, and TV. We also need to find ways to broaden the experiences we need to deliver.
Our two year anniversary was November 15, 2003. ... By the end of June, our install base worldwide will be between 14.5 and 16 million game consoles, which we are very excited about. In some ways, equally important, we think our subscriber base for Xbox Live, which is our online gaming business, will be over 1 million subscribers. ... We are No. 2 in North America and Europe and No. 3 in Japan. Our attach rate at this stage, games per console, two years into the industry, is higher than any other console has achieved. There is a lot of third-party game title support. There are also a lot of great games.
Now, on the content side, we can certainly not lose sight of the core audience. Some of the game titles we shipped this holiday season appealed to the core audience. The core games, again, are titles that appeal to the 15-40 year-old male audience, who we have been catering to for the last two decades. That can and must continue. That audience is the heartbeat of what happens in the video-game space. I think it is very important to understand that this is not a move away from what we have done but rather an expansion. To that effect, in our own simple way, just two years into Xbox, we have been spending a lot of time trying to broaden the content on the console. Whether that means appealing to a younger audience with "Barbie Horse Adventure" or working with movie franchises such as "Harry Potter" and "Scooby Doo." The Xbox Music Mixer, where you can actually do Karaoke, play your music from your personal computer, or locally on your Xbox TV, helps to broaden the entertainment as well. Experimenting in ways we can expand beyond that core audience and reach into new parts of the marketplace. If we do that successfully on the content, it is the "if-we-build-it-they-will-come" approach. We have to continue the experimenting and reaching out into new areas.
Next, I want to talk about expanding the community. If you think about Xbox Live, this is a place where we have really invested in leadership. ... We have, as of last June, 500,000 paid subscribers and we think we will have over a million paid subscribers by next June. On average, in a week, we see 1.5 million game sessions. In the week of Christmas, we saw a million game sessions a day for five days in a row. It gives you some idea of the power of what this does because it gives people the opportunity to meet new people, to create a social environment, and to play against other friends or against other people. We are now in 19 countries with a multitude of broadband partnerships. You are going to continue to see that expand around the world.
I think the essence of what is happening here is that we are finding a new way for people to have social experiences and we are blazing new trails. The business model is new, the content model is new, the genres of content are new. This is all a green field so the challenges are that we are going to do some experiments, in which some will succeed some will not, but we are going to keep investing and building in this space for the future. It is fundamental to how we broaden the audience. Just one data point which I think is interesting to bring over from the PC side, our PC online site, the Game Zone, 65 percent of the people playing games in the zone are women. That is not true on Xbox Live today. Five years from now, I hope that the audience on Xbox Live has that kind of breadth and that we can reach out to a very broad audience.
That brings us to expanding the competition. We created something called XSN Sports as an example here. We really are enabling people through our games to create their own leagues, create their own tournaments, create their own teams, and create their own rec rooms, if you will. This happens in a world where you can play with friends, meet new people, and compete in a very fun and safe environment. This is just a simple aspect of how we want to expand the community and reach out to broaden the audience and bring people into this space.
The challenge for us is how we take that excitement ... and figure out ... the way we integrate with the home, how to meet with other media, and the need to build on this digital lifestyle. We need to broaden the experience and deliver it to the masses. This will create greater opportunities for everyone in this room, the partner companies, and the retailers.
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