: [By Staci D. Kramer] During a session on branding in today’s multimedia environment. Peter Moore, Microsoft Corporate VP, interactive entertainment, business entertainment & devices division, mentioned how carefully the company markets Xbox to protect its core gaming audience. “We try not to show up on the network because that dims our cool factor .. They don’t want us to market to their mother.”

That doesn’t mean Microsoft plans to ignore the potential audience of those who might be attracted by the Xbox 360’s media center capabilities and Xbox Live’s networking. But the chokehold on the pipeline for new boxes is keeping that core audience from being fully served, putting off any serious outreach to other potential markets beyond the social branding already in place—while the pumped-up costs make the 360 a mighty expensive media center extension.

At the same time, Microsoft has to decide how to integrate 360’s media center capabilities into the business model. One question: Should media served up via Xbox Live be available to click and buy? Moore spoke with me about some of these issues in a brief interview, starting with the branding spots that include a town-wide water balloon fight.
Moore: “It’s about social fun and that’s what Xbox Live is … we’ve taken it from boys in their bedrooms or many versus machine to this tremendously social undertaking. Now, it can be social in a violent way with an M-rated game such as Halo … or it can be social where you play co-op over lines; you and I can be in completely different countries but we’re in a game environment we’re helping people get through. The social elements of gaming are the real key.”

Q: The beginning of the marketing was aimed at the low-hanging fruit, the people who were waiting for this game and want it. At some point, once you have the supply issues resolved ... 

Moore: At some point ...

Q: ... you’ll want to start marketing it as much as a media center as an Xbox 360. How far away do you think we are from that?

Moore: “The challenge is whether you market that, when you look at it the way we look at it (there are) three concentric circles: the core are games and that can never change, The next concentric circle is your friends, that’s the social network element of it. And then the final circle is lifestyle. The fact that most people know you can plug your iPod in, you can plug your digital camera in, if you’ve got it connected to a Media Center PC, it’s a very rich experience. Where we spend our money is our living rooms—your sound system in your TV is where you put your money, not your tinny little speakers in your laptop where you might plug your laptop in and listen to it. It’s really simple.”

Q: How do you integrate music into the business model?

Moore: “The business model is difficult for us. We have MSN Music? Do we want to create another service that … I’m not sure we want to do that. You can play a video game, you can hear a track, do you want to click to buy? I’m not sure we want to do that.
Other companies may do that—Microsoft is vested in the PC, the ability to do things with a mouse and keyboard. That is the scenario we look at. We don’t see the console as the hub of the home. The PC is still the hub of the home. There’s stuff I want to do in a two-foot experience with a keyboard, mouse and huge hard drive that I don’t to do with a remote control. Anything with data input, storage manipulation, I want to do it on my PC so thinking that everything runs through the TV is not where we’re going. People don’t want to run Excel or PowerPoint or email on their TV. We found that out with WebTV.”

Related: Microsoft Considering Own Portable Media Player: BW

—@ Media Week: Microsoft Estimates Xbox 360 Retail Value At $1.5 Billion-plus In First 90 Days
—@ CES 2006: Interview: Kevin Browne, GM-New Media & Franchise Development, Xbox