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Ed Moltzen
The Chart
November 13, 2009
For the moment, forget Call of Duty: Modern Warfare 2.

Forget about the million users booted from Xbox Live for modding their devices.

Microsoft is on track to integrate Facebook, Twitter, Last.fm and Zune video into its Xbox Live platform on Nov. 17 -- a move that will marry social networking with gaming. While interactive games have been bringing people together for years online, and Twitter and Facebook have enjoyed wild success over the past two years in creating social networks, the market has yet to see what happens when such platforms are mashed up.

Xbox Live has more than 17 million users; Facebook and Twitter have tens of millions each according to conservative estimates.

According to Microsoft, "Stay in the know by discovering, posting and replying to Tweets (on Twitter) right on your Xbox 360. You can even view friend profiles, trends and conversations, or search to see who's tweeting about your favorite game."

With Facebook, Xbox Live users can update their status and invite Facebook friends into the same games they're playing on Xbox Live.

Microsoft, which has an ownership stake in Facebook, reported that its Entertainment and Devices Division (that includes Xbox and Xbox Live) was a $7.8 billion business in its most recent fiscal year -- although that number declined from the previous year due to what Microsoft said was a decline in revenue per user. If integration with social networking services can keep users online more, it's plausible they'll also spend more as well.

Now remember Call of Duty: Modern Warfare 2? Well players of that game this week spent an estimated $310 million to buy the game as it went on sale -- meaning they are, in fact, willing to open their wallets.

Now remember those million users that Microsoft expelled from Xbox live for modifying their systems? Why would any company willingly get rid of a million users? In the case of Microsoft and Xbox Live, because it can.

It also shows an enormous amount of confidence in Xbox as a platform. With Xbox Live already Microsoft's most successful cloud computing offering to date, and with it set to become the central computing hub for millions of people with the addition of Twitter and Facebook support, the technology market may want to look at the platform in a new light. And competitors in cloud and social networking like IBM, Google and others may find their own version of Modern Warfare in the marketplace with their rival in Redmond, Wash.

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