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Phil Spencer - Part Two

The MGS boss on the future of Windows games, as well as his plans for Lionhead and Rare

Following part one of Phil Spencer's last interview on UK soil, where he explained the business reasons for the closure of Ensemble Studios, here the head of Microsoft Game Studios explains a little more about why the announcement came when it did, as well as hinting at what the future of the Age franchise could bring and where Lionhead and Rare fit into the future of MGS. Could the new entity being created by the Ensemble creative leadership work on new Age franchise content?
Phil Spencer

Absolutely I'd say that's something they could work on. Will they?
Phil Spencer

We haven't definitively nailed down a product that we're going to work on with that studio, but you have to understand that Age would be in that conversation.

The importance of that franchise to Windows gamers over the last ten years - it's a game that a ton of people care about. I look at the environment on Windows right now and I look at an IP like Age, and I ask what we should be doing with something like that to help the Windows gamers.

Today is a very retail-driven experience, it's 'work for three years, spend a bunch of money, build a big box, put that box on a shelf, and hope that millions of people come'. And Age is one of the franchises that's been able to live through that, and actually have tremendous success - not all Windows franchises have.

So when we look at that franchise and how we want to go forward - retail's obviously very important to Windows as well as 360 gaming - but also trying to think about how to build a relationship with today's customer. It's different than the Age 1/Age 2 customer, the way they use their PC is different, what their PC means to them is different - so I want to break the mould a little bit in terms of how we think about the franchise and how we move forward.

We think the best way to do that is to get rid of any preconceived notions about what Age 4 should or shouldn't be - let's think about what the Age experience was back when we fell in love with it. These games have a tendency to just get bigger and bigger and bigger, and I'm not exactly sure that's why we fell in love with some of these franchises - the tendency to build a bigger box each time, and take three years to build it.

We're going to re-think this, and what you see now is the result of us re-thinking that. How do we want to go and make a difference in the Windows space? This is all part of that endeavour. It sounds like you're hinting at things like episodic content, maybe looking at what EA has done with Battlefield Heroes - is the online component, whatever that maybe, crucial?
Phil Spencer

Absolutely. If you look at our online service with Age 3 today, it's the most important part of that box. I think retail remains important, especially because people like to shop, look at the front of a box, there's a relationship there that's very important for us to maintain.

But it doesn't have to be the solitary way that us a game publisher and developer builds a relationship with a customer. I want to build that out - Windows is a space that, with the community and social networks that are out there, is right for somebody building an entertainment property that fits more into what people are doing with their PC today, as opposed to being this other window that pops up when they double-click some icon on their desktop.

This is how we're thinking - the transaction that happens between the customer and us is an output of the experience that we're trying to create. You can look at Xbox Live, and with that, would anybody say that Marketplace isn't an important part of our franchises? Clearly it is, with the money that's made on Gears maps, Halo maps, the customer uptake we see when we release new maps, people coming online and playing - it's an important part of keeping the gamers happy, engaged, and feeling like they've bought into something, and not just a spinning disc.

They've bought into a community - was an example of something we built long ago, and we continue to build a community around that game. Those are great examples of things we should be looking at with Windows. Hence the investment with Rockstar on Grand Theft Auto IV downloadable content?
Phil Spencer

Yes, as well as Fallout 3. Halo Wars will be a big title for you next year - isn't the timing of the Ensemble announcement a bit strange? Wouldn't a better time have been after the game had shipped?
Phil Spencer

I was reading some of the community posts on this, and there were two sides to the question. To be very honest with you, this was a decision - as much as this will seem flippant as a publisher to a developer - it was a decision around the employees of Ensemble.

This decision is difficult, obviously. It's a studio that we've worked with for quite a while. I didn't feel right, knowing what our plan was, to not talk to our employees about it. To somehow keep our eyes closed, or ask them to keep their eyes closed, they're going to work incredibly hard over the next three or four months to finish that game - and we all know what the closing of a game is like - and to do that with some false premise or relationship between them and us, I didn't think that was right.

From a certainty in terms of date, would it have been better to say everything was great, and then the day after it ships to reveal it? Yeah, you could play it that way, but I wasn't going to do that. These are people I respect, it's a difficult conversation.

Does it add more risk to the production of the game? I think you'd be dumb to say that it doesn't. Obviously telling people what your plan is at this point... we've worked with the studio leadership and the employees to make sure there's a plan in place, to show why it's important both to us and them why it's important that we finish the game, and finish it the way that it needs to be done.

These games that take three years to develop, the last four-to-six months are important, but a lot of the quality that's in this game was created when we set out with the plan to build Halo Wars.

So we need to close well, but this decision on the timing - I'd say it was trying to be fair to people that we worked with and respect. Do people working on the project know yet what their individual futures are?
Phil Spencer

Some of that's private between us and the employees on exactly what will happen. On a general level though, do most people have a sense of what's going to happen to them?
Phil Spencer

I would say that the studio knows how this can play out. The reason I say "can" is because people are individuals, they can make their own decisions. We've tried, along with Ensemble's leadership - and I think we've been effective here - to say that this is a very important release for Microsoft, it's very important that people maintain motivation and they're not distracted. We've worked very hard to put a plan in place that we think is very fair and equitable for the employees there.

It's a relationship between us and them, but I feel good that overall we've got a situation in which we've done the right thing. People will have different opinions, but I feel that we've made choices for the right reasons. It doesn't mean those choices are easy, but it's the right motivation - and game quality was one of those motivations.

People looked at the game at E3, and maybe some thought that the strategy genre was done - but I think we've looked at how to move that to the 360 and I think people saw that. That promise to the consumer is also one of the promises we have, so we needed to balance that to make sure quality of the game and respect to the employees were both weighed in. I think we've done that. You mention that a plan is in place - we've heard that employees stand to lose some benefits if they decide to move on before the title ships. Is that true?
Phil Spencer

It's probably more detail than I'd want to get into - the relationship between an employer and employee is a personal, professional and private relationship. That's probably about as much of that as I can answer. Has the ship date of the project been delayed at all as a result of the decision to announce the closure early?
Phil Spencer

I feel very good about the commitments that we've made on the date of the game. There's a lot of hard work to be done on the final polish of the game, but I feel good about where we stand. Of the remaining studios in the MGS family, Lionhead and Rare have been keeping particularly busy - Fable 2, Viva Pinata, Xbox Live avatars, Banjo - are their futures safe?
Phil Spencer

You just listed the work that those studios are doing, incredibly important to MGS. For Rare, this will be their fifth game in the first three years of the Xbox 360 - that's crazy. Two launch games? What studio on the planet signs up for two launch games? That's just crazy.

So the productivity and effort in those two studios is just great to see, and the number of studio resources we have in the UK - this is our largest concentration of studio resources anywhere on the planet. The studios, and the franchises, remain a very important part of our success.

Fable 2 is Fable coming to the 360 - Peter's promises and dreams - it's going to be a big game, I think there's a lot of anticipation for that game. And I was playing Too Human with somebody last night, co-op, somebody who I didn't know, and he went on and on about the anticipation of Fable 2.

An important part about those studios, and the creation of the MGS organisation in Europe, is for our platforms to succeed here. You see us doing more with Lips, local content here in the market so that people have German songs, and UK songs, and so on. We understand that this is a market made up of markets, and we have a leadership team in place on the content side that can help us tailor the different content.

And not only game content - the movie announcements that we did at E3 demonstrate that the Xbox 360 is a global product with regional understanding and excellence. The game experiences that we're building need to map to that. Having development resources here [in the UK] is a very important part of that.

But we don't want to build games that will only sell in one market, so we'll get Lips, that obviously has some specific European markets that it will do exceedingly well in, but we're going to market it and talk about it as the global game that we think it is.

We picked a developer in Japan, of all places, to build a game that we think will be incredibly important for Europe... but it was about making sure that the talent was lined up with the game that we were trying to build.

If you look at the games they've built in the past, like Elite Beat Agents, they've a history of having that music-rhythm backbone to their games - that makes them a perfect partner for us here. And having our European teams helping interface, making sure that we're building the right game for the markets is very critical to our success.

And Rare, and Lionhead, and Remedy, and the other relationships that we have here are really important. Peter Molyneux recently dropped one or two hints to about the sorts of things we might expect from Lionhead's next game - will that definitely be published under the MGS banner?
Phil Spencer

Yeah, absolutely. No Bungie- or Ensemble-style plans there then?
Phil Spencer

Well I'm going to drill in on that a little, but no - no plan for Lionhead. But even the Bungie games that come out as Bungie - the entity they are today - are still MGS games. We look at those as first party games.

In terms of our investment in a game like Crackdown or Gears of War, where they're developed by other developers - those are as important to us as games that are developed by internal studios.

Because in the end, our customers care about exclusive content - I'm not sure they care what business card the people who are building those games have. Is anybody going to look at Gears of War and say it's not a pillar franchise for us on 360? No, because it is. But we don't own Epic, and Mark Rein and those guys are their own people. That's good.

So yes, the next Lionhead game is definitely an MGS game. And Peter's right - it's very different than games that Lionhead or many others have built before.

Phil Spencer is the head of Microsoft Game Studios. Interview by Phil Elliott.

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