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Congloms curry young dudes with Xbox Live

Services have potential to deliver marketing, distrib opportunities

With the in-game advertising market projected to swell to $350 million in 2007, media execs now see “out-of-game” online services like Xbox Live as a useful way to reach young male demos as well.

Such services have the potential to develop into iTunes-style digital stores offering games, music and video to consumers — and delivering both marketing and distribution opportunities to media companies.

Paramount, for example, recently began offering hi-def trailers of “Mission: Impossible III” and “Nacho Libre” for download on Microsoft’s recently upgraded Xbox Live, noting the service’s ample 18- to 34-year-old male user base fits the pics’ respective target demos. The move followed Epic Records’ decision to offer musicvids via the service last fall.

Microsoft game-product manager Scott Henson says that while only about 10% of first-gen Xbox owners connected to the online service, half of Xbox 360 users have signed on — and 25% of those have downloaded the trailers, an aud size comparable to basic cable. “On the original Xbox, most people would be connected six hours a week, and now it’s moving toward 25 hours a week,” Henson adds.

Sony plans to launch a new online service for its PlayStation 3 console in November that will include video and voice messaging and allow for downloads from third-party providers.

Viacom, meanwhile, spent $102 million last month to buy Xfire, an online community for PC gamers boasting 4 million users.

“It’s a bull’s-eye against our young audiences,” said Viacom CEO Tom Freston, noting Xfire’s snug fit into the conglom’s MTV Networks group.

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