Harrison: Digital future is unstoppable but retail will live on

Last week was a big week for Xbox One in the UK.

Microsoft, desperate to escape the shadow of its botched Xbox One announcement, visited Eurogamer Expo to let UK consumers play its new console.

In the opening keynote, Phil Harrison, the firm’s corporate VP, confidently told fans that Xbox was ‘winning the games message’ over its rivals, pointing to its plethora of E3 awards. So confident is he in Xbox One’s success that he predicted it will last for more than ten years.

And it is confidence in the face of a resurgent PlayStation eager to claw back market share, plus the news that PC giant Steam will launch rival living room devices of its own.

MCV sat down with Harrison to talk ten-year life spans, Steam, the future of retail, and why he can’t stop talking about Titanfall.

MCV: You say Xbox One will have a life cycle longer than ten years. What makes you so confident of that?

Harrison: Well Xbox 360 has been getting close to that. When we think about an entire life of a generation, it is going to be measured in decades because of the way these devices are going to be sold around the world. We have seen that already with other consoles.

But when a cycle reaches a certain point, say five years in, we start to see a decline. Ubisoft for one doesn’t want another long console cycle.

The way in which you keep the market fresh is keep the technology fresh and keep the development ecosystem growing so that new and exciting experiences are coming out. And with Xbox One using the power of cloud we can add features, we can add functionality, we can have performance increases over time. I think that will keep the platform very fresh over a long period of time.

"On a macro-global scale, the world is clearly moving
in a digital direction. It is, I think, an unstoppable,
inexorable momentum. We are going to see the world
be truly digital. But with Xbox One we quite correctly
give people choice. They can consume and play
games on disc, and get all the benefits of that. Or
they can consume games digitally. Remember our
games will launch day-and-date on both digital and
physical, so it’s up to the user to choose which medium
they want and have the benefits of either method."

Phil Harrison – Corporate VP, Microsoft

Before you joined Xbox, I recall a talk you did called ‘Daddy, What’s a Disc’ at the London Games Conference. It was about the move to digital and the death of physical. So were you surprised when fans reacted negatively to the digital plans you had for Xbox One?

On a macro-global scale, the world is clearly moving in a digital direction. It is, I think, an unstoppable, inexorable momentum. We are going to see the world be truly digital. But with Xbox One we quite correctly give people choice. They can consume and play games on disc, and get all the benefits of that. Or they can consume games digitally. Remember our games will launch day-and-date on both digital and physical, so it’s up to the user to choose which medium they want and have the benefits of either method.

Sony have been offering day-and-date on digital releases for a while, even Nintendo does it. What’s taken Microsoft so long?

There are certain technical reasons and policy reasons for it. But we’ve made it a clear statement for Xbox One that we will be day-and-date for digital and retail platforms.

How do physical retailers survive in your digital world?

I think if the medium is shifting that does not mean the business model has to shift. From research we have done, consumers like to buy things from retail stores. What they might be buying is a time card or a store value card. Retailers have a very important part to play in the future of the ecosystem, but what they merchandise might shift slightly.

In May it was mentioned that your cloud service would be integrated into retail systems. That excited me, because I saw a future where stores could sell a digital game, and have that title sent directly to a customer’s Xbox One, where it could be downloaded before he or she gets home. Is that the vision? Or am I getting ahead of myself?

I don’t think you are getting ahead of yourself. I am not going to make any specific promises about what technology solutions will or won’t be available. The idea of a console that is connected to your network means that it can update itself. It can check in with the internet, the cloud, and download content while you sleep. So that when you wake up, there’s something new to play. So it’s certainly a possibility.

Do you foresee a time where an Xbox no longer needs a disc drive?

It’s hard to say. It really depends on where you live. It’s my favourite William Gibson quote: ‘The future is already here — it’s just not very evenly distributed.’ If you go to South Korea, the market is entirely digital. The infrastructure that they have with broadband is so powerful that there is no physical retail distribution of games. It is going to be a slow evolution, not a revolution.

Are the new Steam machines a threat to Xbox One?

I don’t think it’s a threat. I have great admiration for Valve. It has done some really smart things. The Steam platform for one. They’re based close to our HQ in Seattle. We have a good relationship with it.

We think the Xbox One business model, developer ecosystem and retail support, will make our platform very successful. It is unclear to me, until I see Valve’s product and understand all of their announcements, exactly what they are doing.

Valve said ‘entertainment is not a one-size-fits-all world’. But you are launching just that, an ‘all-in-one’ entertainment console. What do you make of that comment? Xbox has launched multiple console SKUs before for different audiences. Why not now?

In the past you’ve seen different flavours of Xbox 360 with different hard-drive sizes. But the fundamental performance of the machine remains a constant. All the games work and the user experience is basically the same.

The one thing that is exciting about the Steam announcement is that it demonstrates clearly that the centre of gravity for the most exciting game experiences is the living room. The biggest screen in the house connected to a sound system is the place where you are going to get the most amazing games. So in that way we are aligned.

"The most important thing is the games. And
coming out of E3, we had almost twice as
many ‘game of the show’ nominations than
our nearest competitor. So the industry – the
journalists – are voting our games as the
strongest titles. We have an exclusive
relationship with EA and Respawn on
Titanfall, which is the most heralded game
in the history of E3."

Phil Harrison – Corporate VP, Microsoft

Xbox One has had to endure some negative PR and you’ve had to change your strategy. Have you had to increase your marketing or PR to offset these setbacks?

We are very fortunate as an industry that we have passionate fans who give us feedback. I love that because it keeps us relevant. I absolutely believe it was the right decision to adjust our plans, but it doesn’t change the fundamental direction which we are heading in.

The most important thing is the games. And coming out of E3, we had almost twice as many ‘game of the show’ nominations than our nearest competitor. So the industry – the journalists – are voting our games as the strongest titles. We have an exclusive relationship with EA and Respawn on Titanfall, which is the most heralded game in the history of E3.

Then we built on that at Gamescom, where we had a fantastic reaction to putting hardware into people’s hands and letting them play. And that has been backed up by an unprecedented level of pre-orders.

You’ve mentioned Titanfall a lot in your interviews. Do you view that as the big Xbox One system seller?

I had a chance to get in front of the game at Gamescom, and there is a really incredible thing that Respawn has done, where you play as the pilot – the soldier running around – and then you can scooped up and put inside a Titan. The verticality and change in level design from six-foot tall to 24-foot tall is inspired, it is a magical video game moment. It’s something impactful that I’ve never seen before. So I am very confident that this is going to be a big, big system seller. Every generation sees a new IP explode in a powerful way, and right now I would say Titanfall has a big chance.

You mentioned GTA V on stage at Eurgamer Expo and the incredible success that has had…

We should be all celebrating it. We should be cheering from the rafters.

Do you think the next-generation will ever see a game that reaches those heights?

We have seen in every single generation, speculation that we have hit the heights, that we have hit the maximum saturation and we can’t get any bigger. I have seen consoles in four different decades, the ‘80s, ‘90s, noughties and this decade. And every time we have felt that’s as big as it’s going to get and yet we always manage to out-perform and out-amaze ourselves.