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Direct-Effect Benefits and Information Cascades of Xbox Live

http://www.itproportal.com/2011/11/14/xbox-live-gaining-new-member-every-two-seconds/

In this article it was reported that Microsoft’s Xbox Live gains one new member every 2 seconds. Xbox Live is an online multiplayer gaming service made for use on the Xbox 360 video game console. Both the Xbox 360 and Xbox Live are creations of Microsoft.  A user of Xbox Live can connect to other Xbox Live users and enjoy playing games with other users of the service. The rate of growth in users of Xbox Live has increased a lot since it was first started, and the cause for this is information cascades and direct-benefit effects. The success of Xbox Live comes from its large amount of users, if this service had no members, there would be no point to anyone signing up for it. But as people begin to use this service, there is a benefit for other people to sign up for the service due to the ability for them to play games with other people online. As more and more people sign up for Xbox Live, the benefit of signing up becomes greater and greater, and more and more people sign up. This increase in rate of growth of users is due to this direct-benefit effect. Along with this effect, information cascades begin to form as people sign up for Xbox Live as their friends with a membership to the service tell them how much they enjoy the service.

 

Along with this system of direct-benefit effects and information cascades of Xbox Live there is a similar system that coincides with it. With Xbox Live, users play certain games with other users. In the week of November 7th, the most popular game being played by users on Xbox Live was new game called Call of Duty: Modern Warfare 3. A chart of the most popular games being played on Xbox Live for the week of November 7th, was shown in this article: http://www.videogamer.com/xbox360/cod_mw3/news/modern_warfare_3_tops_live_chart.html. As more and more users purchase this game and play it on Xbox Live more people will be inclined on purchasing this game so that they can play with the other users on Xbox Live. This other system is the system of benefits and cascades of the games for the Xbox Live console. When purchasing a game for my Xbox 360, I always consider how many of my friends have the game and what they have said about. The decisions I make in purchasing games and being an Xbox Live user also affect my friends’ decisions. In an attempt to gain more users, Microsoft will give out free trials for its service. Through direct-benefit effects and information cascades the rate of growth in users of Xbox Live and purchases of certain games increases.

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