Microsoft's Chris Lewis
How Xbox will become number one in Europe next year
From his interview suite overlooking the Galen Center auditorium in Los Angeles on Monday afternoon, executive VP of interactive entertainment in Europe Chris Lewis has a great overview of the teardown of the Xbox 360 press conference – an amazing logistical hurricane of loading and lifting designed to transform the platform holder's network of huge video screens and stage dressing into the contents of a few hundred neatly packed trunks.
But if that's a good view, then Lewis reckons the one he has from the top of the Xbox business in Europe is even better – he perceives great growth and momentum in traditional Sony strongholds like southern Europe in addition to the usual Xbox heartlands, and he believes Kinect, TV and Xbox Live are uniquely positioned to make Xbox 360 the number one seller globally in Microsoft's next financial year. He calls it a "perfect storm" of services and components.
After watching the dismantling of the conference in awe for a little while, we settle down to talk about how that goal is going to be achieved in real terms, and whether the vision Microsoft set out at its E3 conference is really the one consumers want.
Q: Let's start with the new vision you unveiled – of Xbox dominating entertainment and Kinect at the heart of it with TV and services. What makes it achievable?
Chris Lewis: One of the things Don Mattrick talked about was the sheer momentum we've still got more than halfway through the lifecycle.
To be able to talk about 55 million and growing in terms of console installed base, and for us to be growing so hugely across the continental swathes of Europe where we haven't always done as well – I think what that does is make a strong statement about what Kinect's done for us. Not just an accessory, but very much a platform that's allowed us to extend experiences into audiences that we weren't resonating with up until now.
And by the way, next year – our financial year from July 1st – is going to be even bigger. For us to get to number one globally, Europe's got to be number one, so next year is an even bigger year than this year.
So how can we do it? We need to protect and grow the core, and there's also Kinect experiences for the core as well as fabulous, broad gaming and entertainment through Kinect. But it's also the services – the integration across the phone, the PC, the console – and I think it's what we're able to do through the community at Live.
It's that positive perfect storm of things that I think give us that growth potential.
We've gone through some phases where we were a bit schizophrenic about what messages we were trying to get out there and how we would articulate them
Q: Don did say "global leader" – does that mean in terms of sales for the next financial year rather than overall?
Chris Lewis: Correct, and all the indications that I see and all the target agreements we have and indeed the current speed of sales say we will be number one in Europe next year, and we have to be in order to meet and achieve that aspiration.
That will require us to invest appropriately all around the region, to rely on the UK of course to continue with its very healthy growth and leadership, but also for France, Italy, Germany and Spain to continue to grow to meet that bar, and we'll invest accordingly to make that happen.
Q: With things like Kinect and Windows 8's bold new UI coming through, it feels a bit like the stuffy old Microsoft is being replaced by a new creativity...
Chris Lewis: That is how it feels from my point of view. Xbox is one of the true standout innovations and key beats in our history over the last five or ten years in terms of resonating with the consumer audience in particular.
I've been at Microsoft a long time and I think we've gone through some phases where we were a bit schizophrenic about what messages we were trying to get out there and how we would articulate them.
Whereas I think certainly in the last ten years in the consumer space we've had a real head of steam, we have been innovative and not derivative – Kinect is a great example of that in terms of enhancing and expanding what we do with the Xbox – and I think if you go right back the mere fact that we architected this with online at its very heart was also visionary in and of itself, which does set us apart from our competitors in a way that's unique right now.
So yes it does feel like that. I've never thought about us as dusty and old as you describe, but I take your point, and I think it's great that you're able to say that and talk about the fact you think we've changed, because I genuinely believe we have.
Q: Do you think core gamers will be excited by what they've seen today?
Chris Lewis: I have no doubt. We were pretty hardcore there in the first phase of the conference, unashamedly because I think what we've got there is really powerful, as well as the combination of Kinect integration to some of those core experiences as well. I think we're very confident about what we've got.
Q: Do you feel that consumers want Kinect in core experiences, or is that just what you want them to want?
Chris Lewis: Our research tells us that the core audience is keen for those types of experience too.
There was those that will be excited about Kinect for the UI and for searching through voice to find what we want to find, and then they'll find games that they want to play. There'll be others that are coming to us through their desire to use Kinect for core experiences, who then find and experiment with the other forms of entertainment that are available through Kinect and Xbox Live.
So I think it's based on everything we know consumers are looking for. Our developers are excited about it too, and they wouldn't do it through some philanthropic gesture to Microsoft. They're doing it because they know that's what their consumers are looking for.
Q: It was nice to see Peter Moore back at your conference, but it's strange to hear him talking about Kinect in FIFA, in particular, because last summer he told our sister site Eurogamer that Kinect wouldn't add a great deal to that franchise. What's changed?
Chris Lewis: Peter, as you mentioned, is very close to what we do here given his legacy of time on the Xbox business, and I know for a fact through our relationships with EA, which were deep and remain deep, that they were always committed to focus on what was important for their customers and what was complementary to what we were doing on the platform and through Kinect. So I don't see this as anything other than a natural development of how they work with us.
FIFA is particularly important for Europe – hugely, because it's a bit of a religion as you know – so that's very important for me in a parochial sense, getting something in EMEA at the right time. I think it's great that we've got Yves Guillemot on stage and Peter Moore on stage and all these other people that you saw partnering with us to bring great experiences to consumers.
Q: Do you think gamers will accept a new Halo game that isn't made by Bungie?
Chris Lewis: I think as long as it's good, yes. I think that's true for any of experiences. And it will be fantastic. I think people are very discerning, and we know that the bar has to continue to be raised in terms of the depth and quality of what comes in the next version of Halo. I think the Anniversary edition of Halo: Combat Evolved will go down very well with that audience, so yeah, we're very excited about that.
Everybody's constantly focused on security. There's no doubt that whenever you see something like this it refocuses your attention
Q: On Kinect Fun Labs and the other demos, we saw a guy sitting down playing Fable, we saw finger recognition and making avatars with the camera, but it did all sound a lot like what we were promised in the first place. What took so long?
Chris Lewis: We talked about skeletal tracking all along and full-body and that's something that was there right at the outset. I think what we're talking about now is an even greater level of fidelity with finger-tracking and the other things we saw demonstrated.
And I think also as developers get more familiar with the platform and the development opportunities it represents, you're going to see richer, broader, deeper game-based and entertainment-based experiences.
So I think it's a natural progression, and I think we talked about the fact there would be increased fidelity over time, not that the hardware's changed because it hasn't – but we are able through software and updates to do new things all the time.
Q: Things like improving fidelity by dialling up and dialling down the different elements that draw on the bandwidth between Kinect and Xbox.
Chris Lewis: Exactly.
Q: I'm sure you don't want to talk about Sony's troubles lately with PlayStation Network, but as somebody who's operating your own online games service, did you feel sympathy for them when the hack happened?
Chris Lewis: Of course. We're very mindful of what the competition's doing and we're actually genuinely respectful of them as a very worthy competitor in this space. I've said it a few times before and I really mean this – having great competition is what keeps everybody's output at a really high level. We all keep one another on our toes.
All I can say is that I'm sure they're working hard on rectification. We have always taken security very seriously, as I know they have, so we continue to have good rigor in the security of our 35 million Xbox Live audience.
Q: Microsoft was quiet when it happened, but we imagined that your reaction was much the same as theirs – i.e. get the experts in and audit what we're doing to make sure we're not at risk.
Chris Lewis: I think everybody's constantly focused on that. Of course there's no doubt that whenever you see something like this it refocuses your attention. And the positive that comes from this for everybody will be this ongoing rigor that gets applied to this.
Q: On the TV services, looking at the UK, PlayStation 3 users load up their console and have 4OD, ITV Player, BBC iPlayer – they're the big three in the UK for a lot of people and they're still absent from your service. Do you expect to add those?
Chris Lewis: Not being specific, but yes we're very mindful of those, so we need to keep a good rhythm of deep, meaningful partnerships in places that aren't just North America and not just the UK either.
As I said earlier, for us to get to market leadership positions for places like Spain you've got to have the portfolio of services – you can't expect to achieve that through one facet of the business alone.
Q: Looking at the core portfolio of games, do you think there are enough new franchises coming through to be the next Halo or the next Forza? A lot of the games today are fourth, fifth or sixth instalments.
Chris Lewis: It's a good spread of sequels, but I think when the quality is sufficiently good people love that. You only start to struggle when the quality isn't there. People won't buy things just because they exist. As long as the quality continues to broaden out and as long as there's enhancements, it's great.
And there's new stuff too – it's not just sequels and prequels that we heard about. I think Kinect for us opens up a whole new realm of experiences that weren't available for us in the past – whether it's video, whether it's Facebook integration, whether it's Twitter, all of the things that I think make broader digital home-based experiences more meaningful is great, and there's a ton of those coming.
Q: Do you think we'll ever see a ten-million-selling Kinect game?
Chris Lewis: I have to say yes, because I think with 55 million Xboxes and counting, you're quite quickly going to get to an install base where that kind of attach possibility is very real. So I think yes, certainly that's true on the core platform now but it will also be true for a Kinect game.
Q: How many Xboxes do you think you'll sell in the next year? What number makes you number one in the world?
Chris Lewis: The reason I can't be specific about it is that I know what that number is but if I'm specific I'll break out the European component of the number. But I think when we meet next year, which hopefully we will, I'll be talking very confidently and very positively about what we've achieved in the previous year and that we've demonstrated relatively huge growth year over year after year six in the lifecycle.
I think that's going to be an amazing discussion for us to have so relatively late on in the lifecycle.