Online services for Microsoft's Xbox game console and Sony's PlayStation 2 have created the first major consumer application for voice over Internet Protocol (VoIP) service, enabling thousands of hours of daily chat for online combatants. While a far cry from the business and home installations seen as the major market for VoIP services, online gaming is providing valuable early clues about how to deliver such services cheaply and effectively enough to entice consumers.
"It gets consumers more familiar with VoIP in a sort of sneaky way," said Billy Pidgeon, an analyst at research firm Zelos Group. "It's tough to think that would get consumers to go with VoIP to replace their normal telephone provider... but it provides a technical and social and behavioural laboratory for the use of VoIP within a certain context."
What Microsoft is doing is considered by some to be the same "training wheels" approach that cellphone service providers used to prod their subscribers into using data services. Four years ago, cellphone service providers introduced wireless messaging, hoping the simple service would lead to subscribers devouring more complex and more expensive data services. By the end of 2003, the strategy showed signs of paying off, with text messaging at an all-time high and cellphone video-downloading services about to be unleashed in the United States.
But whether screaming taunts over the Internet is the first step of a broad Microsoft plan to become a telecom company remains to be seen. For now, online game intelligence is particularly valuable for Microsoft. The company's larger plans for VoIP include blending voice services into online collaboration and teleconferencing products. Xbox Live, the online game service that Microsoft launched more than a year ago, gives Microsoft a low-pressure way to learn the ins and outs of running a voice service and other demanding online applications.
"Quality of service is still the main issue" holding back business adoption of VoIP, said Matt Rosoff, an analyst at research firm Directions on Microsoft. "But that's not a big concern with games. People are willing to accept a low quality of voice communication, because it's a game service.
"I think VoIP is just one area in which Microsoft is learning a lot from operating Xbox Live. It's really a classroom in what it takes to operate a fairly complex hosted service. It seems like Xbox Live has taken on a lot of the roles MSN [Microsoft's consumer Internet service] has served in the past."
The numbers are impressive by VoIP standards. Microsoft now has more than 750,000 customers paying an average of $50 (£27.20) a year to access Xbox Live and logging approximately 500,000 hours of online game play each day. Every Xbox Live game, whether published by Microsoft or a third-party game studio, includes broad voice chat capabilities.
Sony made voice chat an option when it introduced online games for the PS2. The company's voice support is currently focused on sports games and a few shooters. The most popular voice-enabled game for the PS2, the commando-themed "SOCOM: US Navy Seals," has logged millions of hours of online play.
