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FC NOW: The Fast Company Weblog

August 15, 2006

Grassroots Innovation

Microsoft is the latest company to capitalize on the "customer-made"
trend. According to the Mercury News, any game enthusiast can now create video games for the Xbox 360 video console.

"(Microsoft) will make available a stripped-down version of its game development tools for $99. The XNA Game Studio Express software will have everything someone needs to make a working video game.... The strategy is part of a plan to make the Xbox 360 more attractive by putting consumers in control of the content, much the way that consumers are taking to grass-roots entertainment on YouTube or on their iPods..."

There's a lot being written about this trend that Trendwatching.com calls "Customer-Made," but larger companies have been slow to embrace the idea. According to Trendwatching, "tapping into the collective experiences, skills and ingenuity of hundreds of millions of consumers around the world is a complete departure from the inward looking, producer- versus-consumer innovation model so common to corporations around the world."

Why is this trend a big deal? In most cases, it gives companies a lot more bang for their product development buck. In Microsoft's case, product development actually becomes a profit center: customers pay Microsoft for the ability to create games for Microsoft's Xbox platform. It's also a distribution, recruiting and PR initiative, all rolled up into one. By getting these tools into universities with game development programs, Microsoft is building platform preference among future professional game developers.

Companies that jump on the customer-made bandwagon can provide incentives through contests (like Electrolux Design Lab), visibility (like LegoFactory) or royalties. In Microsoft's case, aspiring game developers are motivated to produce quality games because of the visibility, reputation, career and even revenue opportunities provided by this initiative.

With the tools, gamers can create their own games on Windows PCs and upload them into Microsoft's Xbox Live network, which could theoretically sell them to console gamers via download. Pete Moore (head of Microsoft's game business) said that game creators could share their work with others, for free or for purchase. "We're very excited to enable game development at the consumer and hobbyist level,'' said Moore. "For $99, you can create Xbox 360 games. My dream is that a high school student will get a royalty check from Microsoft some day for a game that sells on Xbox Live.''

Whether it's called grassroots innovation, customer-made or co-creation, this trend is a win-win for companies and customers alike.