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Making long-term moves

Microsoft's key people talk about the future for the Interactive Entertainment business and the Microsoft Game Studios brand

Yesterday, Microsoft announced the departure of Jeff Bell, the appointment of Phil Spencer to head of Microsoft Game Studios and the elevation of Shane Kim to the newly-created role of VP of strategy and business development for Microsoft Interactive Entertainment.

GamesIndustry.biz spoke with both Kim and Spencer about their new roles and the long-term view the company is taking towards the Japanese market and the global interactive entertainment market in general.

GamesIndustry.bizFirst of all, what are the headline announcements that you're making?
Shane Kim

Well there are three things we're announcing. I am taking a newly-created position within the Interactive Entertainment business, so I'll be leaving my position as the leader of Microsoft Game Studios to run strategy and business development for the overall Interactive Entertainment business. I'll continue to report to Don [Mattrick].

As a result of that, Phil Spencer, who has been a longtime member of Microsoft Game Studios and has worked very closely with me since I assumed leadership, will be taking over at MGS - which is a tremendous for him personally, and for the organisation.

There will be a lot of continuity there, because Phil is well-known and well-respected throughout the organisation.

And finally we're also announcing that Jeff Bell will be leaving Microsoft to pursue other opportunities outside of the company.

GamesIndustry.biz You'll have a good idea of what the challenges in that role - what do you consider them to be?
Shane Kim

Well, I'm really looking at them as opportunities to be honest. I think we're in an incredible position right now with the current Xbox 360 generation. We have 19 million consoles, 12 million members on Xbox Live, and some really great content coming up from Microsoft Game Studios as well as our third-party partners.

So we feel very good about the short-to-medium term for the business. This role is really about the slightly longer term view - how do we ensure we're in a tremendous position in three-to-five years, as the global interactive entertainment leader.

GamesIndustry.bizA couple of issues will be on your agenda. Firstly, Japan - you face very tough competition there, and while you've just announced a host of RPGs for the territory to stimulate that market, what do you see as your targets there for the next 12-18 months?
Shane Kim

We've been very realistic about our near-to-mid term opportunities in Japan, specifically with respect to the current console generation. Obviously it's a challenging market with well entrenched competitors.

I'm excited to see developments such as the new RPGs from Japanese developers - I think that's a recognition in the developer-publisher community that the Xbox 360 is a great platform, and we've got a great installed base in the rest of the world.

From a business perspective I think they all know that they need to take the platform seriously, and my hope is that through that process we'll start to see more Japanese content that will start to stimulate demand in Japan and start to turn our fortunes around.

I think that's a longer-term effort, to be frank.

GamesIndustry.bizAnd you're happy to take that longer-term view?
Shane Kim

Yeah, absolutely. Microsoft has always taken a long-term view on our various competitive battles, and Japan is no different. But at the same time I'm excited because I think there are opportunities that we haven't really attacked in an aggressive way - and I think that's going to be part of our future as well.

While we still need to fight in Japan and try to continue to improve our results there we also need to look at other opportunities for growing the business.

GamesIndustry.bizWhat about the concept of mass market gaming? Is there more to be done to combat the success of things like the Nintendo Wii?
Shane Kim

Well we're big fans of what Nintendo has done from an overall industry standpoint - attracting new people to the industry is a good thing in general.

I think the opportunity and challenge for the industry as a whole is to work out how we become a much more mass market, mainstream form of entertainment. That doesn't necessarily mean that it has to take one particular form over another - lots of people give themselves headaches when they try to work out the definition of 'casual gaming'.

I'm more interested in figuring out how we make the entertainment more mass market, more mainstream, so we can talk about hundreds of millions of customers all over the world. So [Nintendo's] approach is certainly one approach, and it's proven to be successful for them, but I don't think that's the only way to approach the subject.

GamesIndustry.bizAnd will any potential new hardware SKUs come under your remit in terms of rolling something out over the next three-to-five years?
Shane Kim

I think that's a long period of time. We don't have any current plans right now. I'm just excited to jump into this role - it's something I've been thinking about for a long time, and I just see the incredible opportunity that it has, as well as the amazing assets and commitment that this company has at its disposal.

So we'll see where the future takes us, and from an organisational standpoint we'll figure out the best way to execute that strategy - but the first step is really to define what that longer term strategy is and what our objectives are in that timeframe.

GamesIndustry.bizWe've seen a lot of change in the scenery at MGS in the past 12 months, with Bizarre and Bungie both going their separate ways. Obviously there's still Lionhead and Rare, but what's your plan coming into the new role?
Phil Spencer

Well, as we look at the Holiday, we have lined up Fable 2, Banjo, Gears of War 2 - I think we've got a good mix of developers and new IP as well as IP that's been extremely successful - I think it's as strong today as it's ever been.

Relationships in the games industry between developers and publishers change over time - that's part of the business. It's a creative business, and part of our job at MGS is to make sure that at any given time we feel like we've got the right creative talent on the right game, to help us build the exciting line-up for the Xbox 360.

And when I look ahead to the stuff that we're working on, both in the near-term and a little further out, our line-up is very strong.

GamesIndustry.bizSomething that has worked very well for the Xbox 360 is the ability to roll out key titles at regular intervals since launch - something that's been harder for Sony. How important is that looking ahead, particularly as the PlayStation 3 gains momentum in the market?
Phil Spencer

It's a key part of our strategy to release big, impactful games on a regular timescale so that customers of the Xbox 360 - our gamers out there - come to expect that first party will be a key source of entertainment for them.

And when I think about what we've done previously it's part of how we manage our portfolio - breadth of genres, the developers we work with - that what first party is all about. I look at the year ahead and I still think we're very well set up

Shane Kim has been named VP of strategy and business development for Microsoft Interactive Entertainment. Phil Spencer, formerly head of Microsoft Game Studios Europe, has assumed Kim's old position as head of Microsoft Games Studios. Interview by Phil Elliott.

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