Step aside, gamers: Xbox Live expands ‘TV-like’ ads

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With ad sales up 142 percent over 2010 and usage among premium-video subscribers surpassing online gaming, Microsoft is expanding the number of 15- and 30-second TV-like commercials running on Xbox Live.

On Tuesday, Microsoft showed off its evolving online entertainment platform to agency media buyers in New York, part of a weeklong series of presentations to Madison Avenue being jointly conducted by large digital companies called the Newfront.

Microsoft announced that ESPN, CBS Interactive Properties GameSpot and Last.fm, and Manga Entertainment will now provide content apps to the expanding “Run of TV Apps” program launched on Xbox Live late last year. This program allows advertisers to purchase TV-like commercial spots on Xbox Live that include app-level interactivity and metrics.

Xbox Live had already inked apps from Sony’s Crackle programming service, as well as news/gossip provider TMZ and bloodsport league UFC to the program, but has yet to release the names of any participating brands.

“With the growth of Xbox Live, advertisers no longer have to choose between digital and TV advertising — we’re offering the impact of TV and the interactivity and addressability of digital in one platform,” said Ross Honey, general manager of Xbox Live entertainment and advertising, in a statement.

With Microsoft building Xbox Live into the most robust content platform in the over-the-top programming business so far, the company is well on its way to transitioning Live and its 40 million subscribers worldwide away from gaming and towards general entertainment.

On Tuesday, Microsoft revealed that Xbox Live Gold members in the U.S. spend an average of 84 hours a month on the platform, with entertainment app usage more than doubling year over year. For the first time in the U.S., the company said, entertainment app usage has surpassed multiplayer gaming.

Of course, while that may be warming hearts in Redmond, the multiplayer gaming community may be feeling alienated, if this blog post is any indication.

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