Microsoft sending mixed signals about Xbox One, Kinect, and advertising

We've got a little over six weeks left until Microsoft's Xbox One is on retailer shelves and it still feels like we're getting mixed messages from the company about some aspects of the new machine and its surrounding ecosystem.

We all know the Xbox One comes with an improved Kinect sensor. Initially we were told that the Kinect had to be hooked up for the Xbox One to work, but Microsoft backed away from that requirement. Still, since we're paying for Kinect many of us will probably want to hook it up.

On the other hand, there were some concerns around Kinect and advertising. Kinect is always gazing out at your living room, watching what you're doing, seeing if you're paying attention, seeing if you're alone or have friends over. What could advertisers do with this info? Microsoft has made an effort to put those concerns to rest, with mixed results.

Last week on Neogaf Microsoft director of product planning Albert Penello talked about about Kinect, privacy and advertising. In his post Pennello said:

"What I think you're asking about is an interview done earlier in the year where someone was talking about how some of the new Xbox One Kinect features *could* be used in advertising - since we can see expressions, engagement, etc. and how that might be used to target advertising. This is the point that seems to draw some controversy.First - nobody is working on that. We have a lot more interesting and pressing things to dedicate time towards. It was an interview done speculatively, and I'm not aware of any active work in this space. Second - if something like that ever happened, you can be sure it wouldn't happen without the user having control over it. Period. "

He then goes on to talk about how Kinect can log you into your Xbox via facial recognition, but that facial data never leaves the console, and how Skype will freeze video when it is not the foreground application so you can't accidentally leave the stream running.

So that's all encouraging news and I know I was happy to hear that Microsoft is taking our concerns seriously. Though I'll note the emphasis around "I'm not aware" is from him.

But then on Saturday a post at Advertising Age muddled the issue once again.

Microsoft's corporate VP-marketing and strategy, Yusuf Mehdi was speaking at the Association of National Advertisers Masters of Marketing Conference in Phoenix, AZ, and Advertising Age says he hinted at "the possibility of making data from Xbox available for market research".

The post quotes Mehdi as saying:

"We are trying to bridge some of the world between online and offline. That's a little bit of a holy grail in terms of how you understand the consumer in that 360 degrees of their life. We have a pretty unique position at Microsoft because of what we do with digital, as well as more and more with television because of Xbox. It's early days, but we're starting to put that together in more of a unifying way, and hopefully at some point we can start to offer that to advertisers broadly."

Mehdi shared some (by now well known to gamers, but perhaps not to advertisers) Kinect 2.0 facts: that it can distinguish up to 6 voices in a room, it can tell if people are looking at the TV and even determine their heart rates.

Advertising Age calls this a "huge new trove of data about what's going on in living rooms" and an unnamed marketer said that knowing if people are paying attention to ads or how their bodies responded to ads could have a big impact on pricing.

So here I am, confused once again. Penello tells gamers that he doesn't know of anyone working on this tech, but Mehdi is pitching it as a valuable asset for advertisers.

[Update: 10/8/13 8:45 AM AllThingsD says that Microsoft is "flat-out denying" the Advertising Age report, saying Mehdi was misinterpreted and that he was referring to Microsoft's Smart Glass 'companion app.' ]

So who is lying? Probably neither of them. It's likely no advertiser is working on this kind of tracking technology yet, but once the Xbox One is established someone probably will and Mehdi's team will support them.

I'm clinging to Penello's promise: " can be sure it wouldn't happen without the user having control over it. Period." My best guess is that advertisers, or even Microsoft, will offer some kind of perk in exchange for opting-in to allowing advertisers unfettered access to what goes on in your living room.

Something to keep in mind when you're at a friend's house and their Xbox One is turned on.

Read more of Peter Smith's TechnoFile blog and follow the latest IT news at ITworld. Follow Peter on Twitter at @pasmith. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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