Microsoft Corporation (MSFT): Xbox Ad Breakthrough?

Microsoft Corporation (NASDAQ:MSFT) has been working a lot with expanding its Xbox console from a video-game device into a full home-entertainment device with video- and music-streaming capability. This has been consistent with the general entertainment culture – many consumers are not watching TV commercials or listening to commercials on radio, with the technology now to record TV programs with the commercials removed to watch later, or to get video streamed from services like Netflix Inc. (NASDAQ:NFLX) or Hulu.

So the challenge has been for advertisers to reach out to these audiences. Microsoft Corporation (NASDAQ:MSFT), though, is reporting in the Puget Sound Business Journal that its Xbox group has solved the “mystery” of interactive television and, as a result, may have found a way to monetize the digital content from the console.

As fewer and fewer people watch live or broadcast television programs and are instead going to digitally recorded or streamed content – the ones sans commercials and other advertisements, the advertisers have been finding fewer and fewer opportunities to peddle their wares to consumers. With if Microsoft Corporation (NASDAQ:MSFT) has found out this secret to interactive TV, it could find some success in its new “NUads” platform – “NU” stands for natural user interface – which it announced recently.

The latest news about this involves the early results of the platform. Microsoft Corporation (NASDAQ:MSFT) announced that nearly 40 percent of those who were prompted to engage with an advertisement did so, and more than 70 percent of those engagers voted in a poll that was shown after the ad. And with the company noting that its surveys have shown that Xbox users are starting to access video-streaming content more than they are playing video games, and one survey noted that more than 40 percent of users were watching at least one hour of video content on the console every day.

What are your thoughts about this concept of monetizing video streaming content? What impact can you see on the bottom line of Microsoft Corporation (NASDAQ:MSFT) and its Xbox platform? Give us your thoughts about this story or your assessment of the company or the stock as it enters 2013.

DISCLOSURE: I hold no positions in any stock mentioned.

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