1. The Future of Entertainment Shawn McMichael Interactive Entertainment Business Microsoft Corporation

2. “ The brief history of living room entertainment…... and the death of engagement? ”

3. “ What happened? From here……to here? More content choice (genre and access) Less parental control of content consumption Social interactions include people outside the home Gaming competing with media Reduced attention spans

4. “ How will the living room change moving forward? Linear, Hit Driven Remote Control as Interface Low Parental Control Isolated, Passive Experience Anonymous Experiences On Demand, Hits + Niche Multiple Rich Interfaces Higher Parental Control Integration of Social, Gaming, TV Cross-Platform ID CONTENT CONSUMPTION DOMINANT INTERFACE PARENTAL CONTROL SOCIAL INTERACTION VIEWER IDENTIFICATION AREAFROMTO Two areas of “non-change”: (1)Declining attention spans (2)Continued ad avoidance

5. 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 Total Members (in Millions) available in more than 26 countries launched in 2 countries

6. “ Case Study: Game Shows Meets Social Media “1 vs 100” with on Xbox Live

7. “ Case Study: Television Meets Social Media “Party Mode” with SkyTV

8. “ Cast Study: Linking User Identity Across Screens Avatars Friends Achievements Great Games Xbox LIVE on Windows Phone 7

9. 9 Audience evolution

10. 10