Following the first part of the interview with Midway's interim CEO and president Matt Booty and the company's executive VP for International Martin Spiess, here the top two address the question of business competition, explain the reasoning behind the casual online portal launch and evaluate the position of Europe.
Q: Is it the most competitive time in history for the videogames industry in terms of business?
Martin Spiess: It's always about customer value, and I think what's probably changed is the perception of what customer value is - the bar has been raised, so people are expecting a lot more from a game now than they would have expected ten years ago.
But as you can see from our past releases, between Stranglehold and Unreal, we're pretty much up there. We can compete with the best, and if you look at our line-up for this year, it's all triple-A top notch titles.
It might be a little bit tougher from a technology standpoint, but we've positioned ourselves well.
Q: And ultimately for those that get it right, the rewards are greater than ever before?
Martin Spiess: It never changes - it's always about product quality. The main thing is delivering what the consumer wants.
And nothing can ever be taken for granted - if you look twenty years ago Nintendo ruled the market, then Sega came in, all of a sudden Sony was the new competitor, and now Nintendo is on the top again.
So there're always things happening, and it's also interesting because the Nintendo platform is not something that's heavily relying on state-of-the-art technology. It's about interesting gameplay mechanics - so there's always something new happening, and it keeps us on our toes, but we're also competing very well in that category. It's exciting.
Q: Earlier in the year you announced the online portal for your classic games - how important is that for Midway?
Martin Spiess: It's not a fundamental business move for us yet, but eventually things will go more towards online distribution. So it's more like a trial project for us - we'll see how our consumers react to the product, how we can reach consumers more effectively - so it's like a marketing and business tool at the same time.
It works pretty well for us but it also shows us where we can improve things and maybe do things differently - like online distribution, Marketplace and Sony's platform, it works pretty well for us. Anyhow, the future of marketing is to go direct to the consumer - that's why we have to invest and expand in that area.
Q: What sort of response have you had from that portal, at those price points?
Martin Spiess: It depends on what customer value we deliver, but we've had a pretty decent acceptance of our price points.
Q: Does digital distribution threaten retail?
Martin Spiess: Well, that's an interesting question, but I'm not sure we can answer it. The thing is, we're a small player, and it's something that eventually first party will decide for us, or maybe EA and those companies.
Matt Booty: And the consumer will decide. It wouldn't be appropriate for us for us to say to consumers what the most valuable way is for them to get their product delivered. I think the consumer has driven certain things that are still very much retail, other things have gone online, some surprisingly have stayed, and others that you wouldn't have predicted, didn't.
It's strange that people love to buy music online, but yet book stores still sell a lot of paper books, and magazines still sell even though you can read things online. So the consumer will decide and it's up to us to keep serving the customers.
Q: Do you watch with interest when a company like EA releases a game like Battlefield Heroes as a digitally-distributed title?
Martin Spiess: Obviously Battlefield is a massive franchise, very expensive to develop and maintain, so it's an interesting project for us to follow, and see what comes out of it - if it's a viable business model we might follow it, or not, but it remains to be seen. It's definitely interesting.
Q: What's your evaluation of Midway's product line-up for the rest of the year?
Martin Spiess: The reception we got from retail, especially in Germany, is very good. I wouldn't say all the orders are in, but almost - the numbers are very strong. And international distribution, the US numbers we're getting are fantastic, so it's our strongest line-up so far.
Q: What's the high point for you?
Matt Booty: Well it's interesting for us, because Mortal Kombat was never as big in Europe as it was in the US, but the numbers coming in are very, very strong - which is maybe also part of the whole DC-Batman phenomenon. TNA is also being very well received, just based on the quality of the game, because obviously the franchise isn't as well established as in the US - so I think we made the right decision back then to jump on the TNA bandwagon, and it's paid off.
Q: We watch financial results from a number of companies, and one thing we've noticed is the strength of revenues in Europe - we've been canvassing thoughts on whether it's down to currency or market maturity, what do you think?
Martin Spiess: I think for us it's a blend of three factors. Currency is one of them, then when I started Europe was under-developed, so basically we have more than doubled our share of business by implementing better practices, finding better people.
The line-up also is a line-up that is more globally appealing than it was before - historically it was very US-centric, so that helps a lot.
I don't know what it's like for other companies, but the market is not as big as the US market, so naturally we have lower attachment rates. But it could be growing to the same size as the US - the only problem we have right now is that we see in certain territories Microsoft is lagging behind. Sony has become very strong, Nintendo has become very strong, but the Microsoft market in certain territories is concerning.
Q: How important is localisation?
Martin Spiess: There are massive sales differences based on globalised or non-globalised products. Russia is a massive emerging market for us, but it's the same thing - customer value. If you're Russian, you don't want to watch a movie in English, you want to watch it in your own language. There's a language barrier.
Matt Booty: We've put a lot of time in with our development teams, educating them and building in the processes to really try to get the PAL versions done at the same time and develop them, whereas if you wind back five years you'd do the US version first.
We had some difficulties last Fall, but I'm certain that this Fall we'll get day and date with the US and Europe.
Martin Spiess: And there are certain expectation levels from the consumer that if you buy a product that has that kind of production value, that it comes in the language you speak.
Matt Booty is interim CEO and president and Martin Spiess is executive VP for International at Midway. Interview by Phil Elliott.