Focus: Microsoft's Peter Moore at TGS (Part 2)

This is the second part of a two-part interview. Click here to read the first half of the interview, which covers a range of topics including Microsoft's global launch strategy, the Xbox 360's multimedia functionality - and why there's no comparison between Xbox 360 and Sony's PSX.

Growing the Market

Peter Moore: First of all, I want to give kudos for Nintendo, for its attempt at innovation with the new controller - bringing people in that, as Iwata-san said, are either lapsed gamers or gamers that are intimidated by the complexity of the controller. I would argue very vehemently that what we're building into the console for digital entertainment is something that has a huge attraction to people that pure gaming experiences don't.

I'll give you my own example - my own family, where my wife is not a huge fan of videogames, is not somebody that plays videogames. Yet, when I brought the Xbox 360 home and showed her for half an hour everything it could do, even without showing a game played, she was sold.

She loved the idea of a wireless controller. She loved the idea of the control mechanism for the device itself sitting on the couch. She loved the idea that she could put her MP3 player in, she loved the idea of the family photographs being on the screen, and having the slideshow mode with music streaming in the background. She loved the idea of being able to connect to the PC, whether it's running XP or Media Centre Edition, and being able to do things there that are stored on the hard drive of a PC, whether that's video, whether that's music, whether that's photographs.

So all of that, I think, brought my wife - a very difficult sell from a traditional videogame console point of view - very much into the Xbox 360 fold because of the things it could do from a digital entertainment point of view. I think consumers are demanding that now.

No matter how you're gonna gauge it - we said at E3, we want a billion consumers touched in this next generation by our industry. That was an industry message. Certainly, we can see Nintendo rallying to that cry and reiterating what Robbie said on May 16th; I heard the same words come from Iwata-san of Nintendo yesterday. Their attempt, of course, is to make gaming a little bit more simple, a little bit more approachable.

In the same way, we'll continue to do things like that within our games. We're looking at maybe simplified controls, looking at games that are easier to get into - of course, still difficult to master, but that get you into the gameplay a little easier.

But yeah - we need to grow as an industry. Having a simplified controller is one tactics in what is a larger strategic battle we need to face to grow this business.

I would hate to think that somebody buys it and doesn't buy a game, because of course, that is not the business model of what we're about. I would like to think that everybody that buys an Xbox 360 will find something they want in a game experience. But I also think that they're going to get so much more usage out of this, not only as an incredible games machine, but as a very important part of their life from a digital entertainment point of view.

This will be one of the major focuses of many people's living rooms in years to come around the world. I think that the ability for us to attract people who are not hardcore gamers because of the digital entertainment capabilities of this device is important, but I still think that at its core it needs to be a world-class games machine. I think that that alone will allow us to meet our objectives in the next generation, and that the folks who may buy it purely for digital entertainment, that they'd be icing on the cake. But I'd be surprised if anyone bought it and didn't want to play games on it.

Looking East

When you talk to developers and publishers about developing games, you typically do not talk just about a single game, but you talk about a strategic plan over a period of time. The way that those conversations go is that we outline our strategy and our goals and objectives for sales, how we will drive our own first-party - which is very important here in Japan, where the publishers said "you need to show commitment as a first party to the platform itself, and then we're right behind you."

We did that six months ago, with the announcements of Sakaguchi, Okamoto, Mizuguchi. Immediately after that, third-party publishers started calling, saying "okay, we need to sit down and talk about the long term strategy, because we think you have success on your hands because you're showing a huge commitment to this particular country and its unique gaming habits."

And so, with all of our development partners and publishing partners - yeah, there might be some instances where we'll focus on a particular game, but it's typically long-term relationships that we're building, not single-game relationships. That would be short-sighted on our part, as well as on their part - they're investing a lot of money in getting up and running on the platform, learning the tools, learning the development architecture, and then just to walk away from that is strange.

So, we fully believe that you're going to see a constant stream of games. Of course, we did announce at the press conference two days ago that over a hundred games are in development here in Japan alone, so that shows the depth of commitment we're getting from the publishing community.

Well, if we look at the capabilities of the Xbox 360 from a technical aspect, and we lay against it the capabilities from a technical aspect of the PS3, everybody that works at a technical level that I respect says... It's a wash. It really is. Both companies have incredibly powerful machines, and it will be about what the developers can do with them.

Cell processor or not, when I look at the technical specs, I don't see anything that concerns me overly from a performance point of view. Quite frankly, having the ability to move first in this space, I think, provides us with the opportunity for a huge advantage.

Gamers are a very smart bunch, and gamers who still haven't seen a PS3 or seen one played, will make the determination. The English expression is, the proof of the pudding is in the tasting. Having videos, having characters in videos... The fact that they feel the need to have Snake tell you that it's powerful, that could be seen as a sign of worry, or weakness, potentially.

The Online Advantage

I think there are a number of different experiences now that consumers around the world are looking for in online. There are the deep experiences that we expect to see in games like Perfect Dark Zero where many people can join a single game environment - much more than you can in Halo 2 right now. We're building out massive maps and levels that allow a lot of people to go in and play in a single game, no matter where you are in the world. I think that is going to be a very compelling experience, but arguably for the more dedicated gamer, shall we say - particularly the guy who loves to play online, the Halo 2 crowd, if we can call it that.

I then look at Project Gotham Racing 3 from Bizarre Creations in Liverpool, and I look at spectator mode - Gotham TV they call it - and the ability for you and I to be playing, and yet other guys can be anywhere else in the world, log in and watch us play. Maybe they want to learn the track, they want to look at Tokyo, they want to look at London and see how we drive; look at our steering tendancies, look at the way we brake into corners... And learn, from the comfort of their own couch in their own living room thousands of miles away.

There are then competitions which we'll build, in which maybe six or eight of us will race and our friends can watch, no matter where we are in the world. It's like the broadcast television business, and I think that's exciting. The ability for us then to take that one step further and have massive racing tournaments that may last months... And it all comes down to the top two guys in the world. Those of us who have competed and got knocked out along the way, then know that at eight o' clock on Wednesday night, the top two guys in the world are going to race Tokyo for $100,000 prize money. I'll watch that! That's exciting stuff! That's all very capable in what Live delivers in this generation with Xbox 360.

But then as I look at people, myself included, and even hardcore gamers that want to play a more casual experience for ten or fifteen minutes - I go into Xbox Live Arcade and I'll sample some of the lighter games there. That's right through the blade which is known as Arcade, you'll see it right there in the Live blade. There are games as simple as Hearts and Checkers and Chess, things like Pac-Man and Tetris that we've all played and that we all find very addictive... It's not a massively immersive game experience, but it's what we all grew up with and love. You can go in there as well and maybe my mum wants to do that, or maybe my kid sister wants to do that, because they don't particularly want to go and play first person shooters with 30 people they've never met.

So I think our goal with the Live experience is to offer this incredible litany of different experiences depending on what you want to do and who you are at any one time. That's very important. In building out Xbox Live, we've built a 24 hour a day relationship with that consumer. Having then the ability to post their own personalised game experiences, their creds, their messages to their friends through Xbox Live... It's building a massive community that is based in gaming, but is also based in the basic human nature of wanting to play with other people and wanting to communicate with other people and be part of a massive community. That's something we're very focused on, and I think that's a huge differentiator between ourselves and our competition.

We're already up and running in 24 countries. One thing people forget is that for the last few years we've been very very quietly building a massive infrastructure for Xbox Live. Data centres around the world, dotted throughout Europe, dotted throughout Asia, dotted throughout North America - if you play on Xbox Live you know that it's an incredibly robust service that never goes down, that is incredibly reliable.

It's a scalable business for us, but our investment has been made. It's there - fixed costs of server farms, building out the infrastrucuture from the point of view of dev support, customer support levels; it's all done. Our competition are still scratching their heads figuring out how they really want to approach this space. We'll continue to invest, because we believe it's the future of gaming. We believe that social gaming is what people want to do.

We believe that coming together, with games at the core but also communicating with other people from all over the world is a massively compelling experience. Not only a hardcore experience, but again, it may well be that - for example - you and I went to college together and we played games together. I can leave you voicemails through your Xbox 360 for when you come home from work; I can live in Seattle, you can live in Paris and we still can keep in daily touch through the Xbox Live service. And then, just like we did in college, Wednesday night - my time or your time, whatever - it's game time! Log in, you're six thousand miles away from me - but you're right next to me on the couch. That's what the service is all about.

Potentially not at launch itself, because I don't think that's strategically correct. What I would say to you is that we have plans, after launch, to allow the gamer to take full enjoyment of the game that he or she has bought - but then, maybe a few months afterwards, make available on Xbox Live Marketplace premium downloadable content that will enhance that game experience.

Maybe they're starting to get a little tired of the game, and all of a sudden... Well, think of a racing game where you can download new cars and new tracks. It brings the game back to life again for a very small amount of money. So that is something that we will encourage; we have built the infrastructure to do it with Xbox Live marketplace, which is very simple to navigate to.

People who are connected obviously can do that - there will be free demos, free trailers... Not everything will be sold, either. The ability for you to see trailers of games, actually get interactive demos delivered to your hard drive, is something that will also be available to gamers. Downloadable content will be a major part of our strategy in the next generation.

I certainly think that Square Enix now developing for the Xbox platform is very important. From the point of view of Final Fantasy XI - which, for example, has never shipped in Europe - we see it as a global title. Utilisation of the beta we think will be very strong both in the North American and European markets.

While it's not the latest Final Fantasy, it's very important that we have the ability to show that genre almost at launch on the Xbox 360 - and having Square Enix as a development partner that believes in online as much as we do, and of course is one of the most powerful publishers in the world, is very important.

So, glass half full, glass half empty - over two million people, from zero, found Xbox Live so compelling that they're paying subscribers of Xbox Live.

The lessons that were learned in the last generation were twofold. First, if we're going to grow powerfully - particularly in Europe - we needed to remove the credit card requirement, because unlike the USA the ability for people to carry credit cards, that part of the culture wasn't there. Then secondly, we needed to ease them into the experience without forcing them to pay immediately.

As we announced recently, we will be removing the credit card requirement for Xbox Live, and perhaps more importantly, giving you a free experience called Xbox Live Silver which will be the entry-level tier that will allow you to go in, connect, talk to other gamers, download full demos of upcoming games, look at trailers of games, go on Marketplace and buy, sell, trade things... And then eventually, I think if it's an experience you enjoy, then you're ready. Then I think that hopefully you'll step up into the Gold tier and play multiplayer gaming.

Knocking down both credit card requirements and money up front, if you will, was very important to our strategy to grow the Live experience. For a lot of people, it's intimidating. A lot of people find it very challenging to put the headset on and go out there into the wild west of online gaming. You meet people you don't know, and for a lot of people that's very exciting, but for a lot of other people that's very intimidating. We felt that we needed more of a strategy that eases you into that experience.

Xbox Live Silver will be huge, there's no doubt. There's no reason for you, if you have a broadband or a high speed internet connection in your home, not to just lean over and plug in your Xbox 360, and you're up and running. We think that will be an incredibly valuable key differentiator yet again in the next generation.