XBox Online Community Could Be Golden

Minyanville says that it may be even bigger selling point then that $50 price cut.

Xbox Live is 7 mln strong and growing. Gamers from around the world are
linking up every night to play their favorite games, creating a brand new
experience. Users can chat, email and download TV shows, movies and classic
arcade games. Heck, gaming leagues are now popping up on TV.

I agree with this 100%. I think XBox live is one of the biggest selling points for the XBox360 and it will be hard to match for the other consoles. This could be a big source of ancillary income when it comes to certain gaming companies. For instance I used the example of the extra songs for Guitar Hero 2 from Activision. I would be willing to bet even money that if these add-ons could be a pretty nice income stream going forward. The gaming companies just need to come up with add-ons that are ITunes-like that will make people come back again and again and pay $1 per pop for. This could potentially make a game that is 5-6 old bring in revenue quarter to quarter.

Also this 7 million strong group is made up of one of the hardest to reach demographics when it comes to advertisers. They are the largely male 18-40 year olds that hardly watch TV in real time, barely react to net ads, and come late to movies to avoid those 10 ads at the beginning. They also have that disposable income that the advertisers like so much. For advertisers Xbox Live is a goldmine when it comes to reaching those unreachable eyeballs.

Some of the things the advertisers can try is to have those Viral Ads that people talk about as downloadable content. They could also have something like the Axe Effect All-Star bikini team for Madden with downloadable uniforms and everything. You can replay Bikini Bowl 2006. Also you can have a Guilty Gear type game where you can download the Burger King so you will be able to kick the crap out of him. You could even have those virtual billboards in-game that will change periodically to kind of freshen up the look of certain games. Finally, it would be so nuts to have something like an American Eagle in-game in GTA4 that has merchandise that changes from time to time depending on the season. I think as long as the ads aren't too intrusive the sky is the limit for this kind of thing.