Live and let Live

Live and let Live
You’ve recently announced new figures for Xbox Live users; you’ve reached six million members – and ahead of forecasts.

Yes, we’re very excited about that. Live remains such a phenomenal success for us. It started, of course, with the first version of Xbox; it was always at the heart of that design and the vision for that business. But it’s only really with Xbox 360 that we’ve seen it flourish the way it has. It continues to surprise us – in a good way. As a company the whole online side is central to the way we operate as a business. We’re good at it and we will continue to enhance and revise the service and make it better and better. It’s good now and we know how much we can enhance it over time.

Can you break down the European figures from that six million?

Unfortunately not. They are good figures, so it’s a little frustrating, to be honest. But in terms of contextual stuff, the figures are now significant enough that we’ve got sizeable same-language speaking communities in all key places across Europe. When the numbers were smaller, it was harder to get, say, French people together in one place. That is no longer a problem. That’s pretty significant.

Any further forecasts going forward?

We’re not yet projecting any future Live numbers. However, on the console we will be ahead of 12 million units by end of financial year (June). And Europe continues to be a significant part of that.
We also had a pretty good Q2. Overall, the company’s financial results were great and we were pleased that the entertainment devices division was up during that by 176 per cent growth. That’s not just about the console, but software, accessories and Live. We’re also attaching software at a record rate. We’re at five games a console now.

And of course, we’re going to ask you for a few thoughts on Sony’s recent Home announcement...

Of course! Certainly we still feel great about the position we’re in. There’s nothing that I’ve heard that makes me feel differently about where we are, particularly when you look at our installed base.
What I did find a little bit surprising is that I still think this business is a games business – and some of what I saw and heard from Sony didn’t seem to put gaming central to their business. Fundamentally, that’s very different to the way we think about things. Games are at the centre of our strategy and continue to be so.

Also, let’s see what actually materialises. Some of what was talked about looks great in principle, but track records show that we may not see some of that as a matter of reality. We know how to make the online experience a meaningful one. And actually, we’re flattered that there’s a good level of plagiarism there in terms of what we’re doing with Xbox Live.

It may be a bit churlish of me, but it is flattering that they see what we’re doing as so significant they want to copy those things. Overall, considering the position we’re in, the volumes we’ve sold, our portfolio and where we are with Live, I don’t feel any different following what I’ve heard from Sony.

Home will be free to consumers. Does that put any pressure on you to revise your model for Live?

No, not at all. And actually, if you take the console’s price of E599, it’s a big price tag and so I’m not sure that ‘value’ is something that you’d associate with PS3. I think we offer great value. And it’s not like we’re trying to force consumers to take technology that they have no particular use for right now – and may not have use for in the future. I think we’re doing a great job in terms of value and choice. We have a more advanced online service and a great portfolio of titles.

I think the only other thing to think about is that you do get what you pay for. Gamers will find out soon that great service depends on great on-going support. And I’m not sure a free service can guarantee that.

Meanwhile, there continue to be daily rumours on the wires about your plans – apparently you’re about to drop the Core Pack…

Well, it’s great that we get talked about so much these days. But I can’t respond directly to the rumour. We still feel very good about the Core unit and still think it’s a great value proposition, and a great entry point.  We knew it would form a relatively small percentage of sales, but in places like Spain and Italy it does better than in the UK or Nordic countries. It’s also proving to be a popular gift purchase at Christmas and Easter. There is no announcement in terms of what we do with it next.

You do have a strong portfolio of titles coming this year – can you tell us a little about your strategy?

We are focused on delivering a good line-up that appeals to everybody – from the hardcore to casual players. And there is a lot still to come: Blue Dragon; Forza 2, which is signifcant for us in Europe; Guitar Hero, which is important in terms of widening and broadening the appeal of 360; and of course a small title called Halo 3. I feel really good about the portfolio. We will have 320 titles in catalogue by end of calendar year.

How do you feel about Sony now entering the market with PS3?

I really do welcome those guys to the market. It’s great for consumers to finally have the chance to compare like-for-like. And I’m confident that everything will look better and play better on 360. I’m looking forward to see people witness that. We’re on a course and will continue to do the things we need to do. I don’t think we’re going to start getting out of step simply to coincide with the launch of PS3. I think it will be great to have them around in the market.

And how do you rate the performance of Wii to date?

Nintendo has done a good job. We were reasonably comfortable that they would occupy a different market position to us and that has proven to be the case. Nintendo has had a great start, but it will be interesting to see how long the enthusiasm for the platform lasts.

And how closely do you watch the handheld market…?

We keep an eye on it, but we are closely focused on console platform business. It would be wrong to say we’ll never enter it. I cannot speak for the worldwide organisation, but there’s certainly nothing in the pipeline right now.

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