Microsoft's Marc Whitten

The Xbox Live general manager discusses the evolution of NXE, new business opportunities and revenue streams for developers on XBLA

During E3 last week, Microsoft announced a number of new features for the Xbox Live platform, from games-on-demand to new in-game rewards for Avatars. took the opportunity to sit down with Marc Whitten, general manager of Xbox Live, to discuss the latest additions and changes, the evolution of the Live platform and the continuing opportunities for developers to monetise games post release.

Q: Can you describe, in your own words, your role on the Xbox team?

Marc Whitten: I am the GM for Xbox Live, so all things Xbox Live are kind of my little domain.

Q: Now that you're integrating with the Zune Store and using its content instead of a separate Xbox Live service for video, has your role changed at all?

Marc Whitten: No. Actually, what I'm excited about there a couple of key things. The first thing is, I want everyone in the house to fight over the Xbox, and the second thing is I want to make the Xbox input number one on the TV. And so I look at how to integrate more entertainment options into our Xbox Live service, so I really have something there for everyone.

Q: Are you trying to expand the gaming audience by giving people who don't play games a reason to interact with the Xbox to watch films? Is that one of your goals?

Marc Whitten: Well, I actually think that Xbox Live is about more than just gaming. It's an amazing gaming experience, but at its core, I believe in this world where it's about the entertainment you want with the people that you care about. And sometimes that's the gamer who wants to watch South Park right now, sometimes it's my wife, who used Xbox Live for the first time ever last year after we launched Netflix. Now she's actually playing 1 Vs 100, so I think it's about both of those things, audience expansion and a new set of people coming in, as well as more options for gamers.

Q: The recently announced Games on Demand service charges an actual price in US currency for its games as opposed to Microsoft Points...

Marc Whitten: Well, you can use both, but you are able to use your credit card as well as use Microsoft Points in order to get that content.

Q: Is this a possibility for the rest of Live's services?

Marc Whitten:The way I look at this, Points have actually been super successful for us. People love being able to get them at retail, they love being able to share them as gifts. What I look at is to try things out, to learn what the community wants, what the community likes, how it works in the system, and be able to take it from there. So nothing to announce, but it's not like it can't be one way or it can't be the other.

Q: On the subject of the Games On Demand service, these games were originally on DVDs, so obviously they're a large file size. Now that you've established that these are acceptable download sizes, is there really a need for a file size limitation on the Arcade titles at this point?

Marc Whitten: Well, you know, in many ways what we tried to create with Xbox Live Arcade was about pick up and play, about immediate gratification, about this idea that there would be these bite-sized games that anyone could go into. So I have a marketplace that is going to have room for all my children, but I think as we think about what content goes where, yeah, I think there still could be very strong reasons that you want to maintain the integrity of the experience of what people have as they go through our Arcade games. That said, when you look at a game like Shadow Complex, I think you see amazingly rich, detailed games coming into that system.

Q: So the file-size limitations, that's on a per-game basis?

Marc Whitten: There is a limit that we like to keep for Arcade as we make sure that that experience is going to be good for people, but we're also always experimenting, and so we try different things.

Q: The biggest one I know of is Watchmen at 1.2 GB. Was that because of the brand behind it?

Marc Whitten: I think we look at these things and we try to see, you know, what are things that we think could be interesting, that we think fit within the ideas that we have for Xbox Live Arcade, and we'll sort of experiment. We're open to any conversation that we have around this as we talk to creators about the types of things they want to bring in. Portal: Still Alive last year was also a larger game.

Q: Since you've introduced Avatars, with the ability for the user to replace his Gamer Pic with a photo of his Avatar, I was wondering how much that has affected the sales of Gamer Pics?

Marc Whitten: You know what, I don't actually know off the top of my head. I will say from my perspective, Avatars have just been an amazing success, and one of the things that we've seen is something like 100 million changes of clothing since we launched Avatars in November. So it's something we see our audience doing a ton of. You do see that most people have their avatar picture as their Gamer Pic.

Q: I guess what I'm getting at is that there seemed to be a good business, especially for the smaller publishers, to create additional revenue streams by selling Gamer Pics, I'm just wondering if the avatars have cut into that?

Marc Whitten: Well actually, what we're seeing is that as we add some of this richness, people have more ability to do things that are really interesting. Our Themes business fits within that as well, and as we launched the Themes for the New Xbox Experience that allows you to do special things behind the Friends channel, we've seen that business increases because people are really interested in the extra functionality. I believe now, as we launch things like Avatar Marketplace where we give people the ability to create content that they can award with their games, props and costumes, but also to create IP that they can put in the store, you will see that actually be bigger than we ever saw with Gamer Pics, because it's such a richer ecosystem and a richer way for people to express who they are.

Q: On the subject of smaller developers selling additional content, can you kind of compare and contrast the submission processes of the relative simplicity of a Gamer Pic versus something like an Avatar asset? Are you accepting submissions for those?

Marc Whitten: Yeah, we're right in the middle of building out the last parts of how the tools work to sort of get the content in and ingest it, especially as you bring it in from third parties and give them the specs on the types of tools they need. But it's going very well. Certainly there is a range between an Avatar item and an Arcade game and beyond based on just the types of certification requirements, the types of things that we want to make sure we maintain a quality level and consistency. But our goal is that these things are very easy. The beauty of many of these things, especially things like Themes, things like personalisation around Avatar items, is that they are pure digital assets, which allows you to optimise a lot of the tools around this creation, ingestion and the content pipeline for that.

Q: Without necessarily getting into specific numbers, what kind of revenue, in a best-case scenario, does a Live Arcade publisher get from the additional features outside of the game itself?

Marc Whitten: You mean like themes, and gamer pics?

Q: Yes, is there an opportunity to, say, double the revenue of a game sale?

Marc Whitten: I think about it in a slightly different way, and I would put it this way: the more you engage the community with the functionality that you build in and out of the game, I think it creates an overall opportunity. An example I'll give you is a game like Kingdom for Keflings. They did an amazing job of integration with Avatars. They integrated Avatars into their game, and it has been one of the best selling Arcade games because of that, because people like to use that. We see similar things with people that do a good job with functionality like Xbox Live Parties, or some of the different sorts of online functionality. Geometry Wars 2 is a good example, where they did such an amazing job of how they integrated the stats and Leaderboard functionality of Live that we believe that it drove significant additional revenue for them. It just became a much more viral hit.

Q: Something that really intrigued me about the New Xbox Experience was the additional advertising opportunities that are there, integrated into the navigation itself. Can you talk a bit about those? What are the larger spots that you've noticed, what is the prime real estate?

Marc Whitten: The beauty of the New Xbox Experience to me is the ability to create new experiences that aren't actually consistent across the entire community or the entire world. Like the first time that the UK had a different set of channels and content than the US was with the New Xbox Experience. Also, this is the first time that you can change it consistently and over time. Something like Spotlight is a great example, where everybody sees that when they first pop on. It's a great experience. But frankly what we've seen is that people do an awful lot of exploring of the New Xbox Experience in a pretty rich way pretty consistently. So it kind of serves as a very advanced website, and you see people tracking us. We put interesting content up there, interesting games, interesting things like Inside Xbox. We see a lot of people who just go check out that content.

Q: Last year's Summer of Arcade apparently boosted Arcade game sales 58 per cent, which is quite impressive. Are you expecting similar numbers this year? You've got a solid line-up, but it doesn't quite seem on the same caliber as 2008.

Marc Whitten: I actually think it's going to be an amazing year for the Summer of Arcade. And the truth of the matter is that at the time we were talking about it last year, everybody didn't know whether Braid was going to be as good as it was. I think those games [for 2009] are amazing. Shadow Complex will be one of the biggest games ever. I don't mean biggest in size, but biggest in terms of quality, depth, story, that we've ever seen. Marvel Vs Capcom, is another one a lot of people have been asking about. So I'm actually really excited about that line-up.

The other thing I'll tell you is what I've seen, and what makes me really excited about Xbox Live Arcade is that the size of that business has continued to grow, and what's exciting about that to me is, my success is just 100 per cent derived from the fact that people are being economically successful on that service, that you can put out games out there, that they find an audience. And I love to see that that pie is growing, because I think it's brought in an entire new generation and an entire new category of developers and content into this world.

Q: Tell me about the development process of a Dashboard update. Are you already working on a major update? Do you plan that far ahead, or do you think you're solid on the current one for the remainder of the console's life cycle?

Marc Whitten: We are constantly improving both the type of content experiences as well as the architecture and the performance, both on the server side as well as on the console side. So the next release is coming in August that brings a lot of the stuff like the Games on Demand, Avatar Marketplace, Avatar rewardables. And you'll continue to see us adding on to that with many of the other experiences coming in the fall. We're hard at work on a long roadmap of stuff over the next year. Now, I think you might be specifically asking about completely re-doing the user interface?

Q: Is that something that could possibly happen? Is that something you experiment with early on?

Marc Whitten: It could possibly happen in that part of the value of this generation is how with something like Xbox Live and the power of the console, you can reinvent the experience and continue to grow the experience. What I'll tell you is right now, the New Xbox Experience has been incredibly successful. It's given us the ability to expand faster, to innovate faster, to target things. The fact that we're launching a new category, a new channel like the Music Channel, is because we have the ability of the New Xbox Experience to expand to give us this place that we can do that work. So right now it's just super great. We're very excited by how it's worked.

Q: So for the current UI, the New Xbox Experience, what was the development time like? When and why did you recognise a need for it?

Marc Whitten: I think we don't share a ton of details on how long we did it. Since we launched the Xbox we've constantly had a software team in my organisation that is focused on building these platform experiences and driving this work. What I saw when we started really thinking about the New Xbox Experience was a couple of things. The first thing was, you would go and talk to people, and many people who owned the Xbox 360 didn't understand how much stuff that the console could do. And when you explained it to them, their satisfaction with the console, the excitement, the time they wanted to use it just went up. And I just thought, wow, how crazy is it that all of this stuff is there, and we can't share it with people? That's such a mess.

The second thing was, it became a little tough to add any functionality. And so as a result we were getting deeper and deeper and deeper nested menus and things like that. And so in terms of usability and a speed of innovation perspective, we were finding that we just didn't have the ability to move as fast as we or our community wanted. And so we spent a lot of time really re-thinking the experience from a different perspective.

Q: My personal feeling, and I don't know if you'll agree with this, is that there really hasn't been much done with the Avatars yet. Would you disagree with that?

Marc Whitten: We've had 1 Vs. 100, which just shipped this week, which I think is an amazing social experience. And there were games like A Kingdom for Keflings, so we've had some experimentation early on. The truth of the matter is as we get the tools out there, it takes a while for the development community to be able to ingest that, figure out how to design around it and start bringing games to market. What I think you see this year is that more and more of that content is starting to really feature Avatars in rich ways. Now it's everything from the Dashboard itself, where you see things like the shared viewing experiences, and then or Sky or Zune or Facebook having more of the Avatar stuff, to new games like Joy Ride and 1 Vs 100 where we're really featuring those.

And we're seeing more and more interest in really using those Avatars in a rich way. One of these I'm excited about is that I actually think you're going to see our Avatars in a huge wealth of offerings, like much more than I think you see anywhere else in terms of being able to use that idea in different places.

Q: What is the process like for a third party wanting to integrate Avatars? Is there a submission process where you determine if a game is good enough for Avatars?

Marc Whitten: No, actually. We have a set of APIs obviously to allow them to get to that, and we have some constraints.

Q: Like they can't decapitate them horribly?

Marc Whitten: Correct. We like to keep it in good clean fun. And we sort of just share those out, and then we're happy to talk with them if they are interested in sharing some ideas. But we're very encouraging. We believe this is a platform feature in the same way that stats, Leaderboards, matchmaking and the rest of our community system is. And frankly what I love is seeing people do things that we hadn't thought about that really sort of push the envelope. So we're not trying to be like, oh, this is a Microsoft thing. It's very open.

Q: Have you been getting a lot of submissions using the Avatars?

Marc Whitten: Yes. Because they don't have to submit to us to ask us may I please use your Avatars. What we're starting to see is more and more interest as they develop those experiences, and we've seen many things both in what we're sharing as well as others that are still under development that we think people are really going to like.

Q: So the APIs are included in your development kit automatically, and a developer can submit a game using Avatars for approval like any other game?

Marc Whitten: That's right. And you'll also see us adding new functionality, things from community request. Things like the rewardables, the ability for games to reward items is directly based on both developer and publisher ecosystem as well as what the community wants to do with that.

Q: So you would say third parties are making real money off of this stuff, and it's worth their time?

Marc Whitten: What I think has been really cool is that the overall digital distribution on Live has created a bunch of that opportunity, both in terms of the games as well as the add-ons. I think you're seeing more and more interest from that. My history, and I've been on Xbox and Xbox Live for a long time, is that I feel like there were years where we were pushing rope, where it was like come on, I promise digital distribution and this add-on stuff is going to be big. And what's kind of nice is like, you've definitely gotten to the downslope, and you see it both in terms of people being really interested in consuming it as well as people being interested in doing the stuff. I think it's pretty cool.

Q: I remember you discussing I believe last year the delisting policies for Live Arcade games, but has anything actually been delisted yet?

Marc Whitten: No. Frankly I decided to solve it in another way, which was to redo the user interface and make it work well. I'm a huge believer in the longtail effect. Part of what excites me about the games marketplace stuff is a title like Civilization Revolution. I love Civilization Revolution. It was a great MetaCritic game. It did OK at retail, but it didn't do great. Now it's actually hard to find. So I love the fact that now by putting it into retail Games On Demand, I can create this longtail where someone coming in new can get this great content.

Q: On the subject of Games On Demand, obviously it makes sense to feature games like Civilization Revolution to create this longtail effect, but does it make any sense for new games? Could games be available online day-and-date?

Marc Whitten: Right now we're just talking about the portfolio of games that we have at launch, and the fact that we update those on a weekly basis. But I continue to believe that digital distribution as an evolving area is going to continue to evolve in a whole bunch of different ways, in terms of what types of things are people doing with add-ons, how people distribute games, and I think we'll continue to evolve.

Marc Whitten is general manager of Xbox Live. Interview by Frank Cifaldi.

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