The Xbox One may still be a year away from finding its way to Indian store shelves, but Microsoft India has plenty in the works for the Xbox 360. We speak with Anshu Mor, group head of the company's interactive entertainment business, about entertainment content on Xbox Live, the Xbox One, retail tie-ups, and of course, the contentious issue of game and console pricing.
The Xbox One won't be arriving in India until late 2014, but do you see an audience for the console's entertainmernt features here when it does eventually launch?
The Xbox One is an enhancement both on the entertainment side as well as on the gaming side. From the India perspective, one of the things we're doing in preparation is ensuring that our Xbox Live portfolio becomes more enhanced from an India viewpoint as far as content is concerned. Right now, there are a few apps on Xbox Live, but we're still not there in terms of on-demand content, and specifically local content. Over the next couple of quarters, you'll see a lot of content coming up to Xbox Live on Xbox 360, and of course, that will carry forward to the next-generation. That's one of the big things we're going to do – bring entertainment content that is relevant to the local audience, with international content as well through third-party apps that we can bring in.
One of the reasons that's been given for the Xbox One's delay in India, and other Asian countries as well, is so Microsoft can have localised content partnerships in place before launching. Are there any such partnerships that you're already working on, maybe even for the Xbox 360?
There's no single reason as such; there are multiple reasons for the various country-specific launches. But you're right, the portfolio does need to be much stronger in India for the true value of the box to come out when the next generation launches. But even on the Xbox 360, the Xbox Live portfolio in the US and other countries is enhanced. We see tremendous possibility even with the current generation to bring in that sort of content and make the Xbox 360 extremely valuable to an audience that looks at both gaming and entertainment. So yes, we do have local Indian apps coming to Xbox Live. We can't announce a name as yet, but what we can tell you that the work has already started to bring some local content into the Indian market.
Another thing that's been missing in India for the Xbox 360 is voice support for Kinect, and that's been even more deeply integrated into the Xbox One. So is Kinect voice support coming to India anytime soon?
I really don't have a comment on that. Those decisions are not taken at a local level, so we don't have an understanding of how, when and what is happening on that front.
For Xbox Live, digital distribution is a big thing, even more so once the Xbox One launches. With broadband infrastructuire being an issue in India, do you think we're at a level where we can suport this sort of technology in India?
If you look at the broadband penetration in the country - it's quite good, and if you look at the console install base in the country - and I'm not just talking about Xbox, there's still a lot of room to grow with the existing broadband base. So I don't see that as a short or mid-term issue. There is still a lot of scope to grow. Last quarter, we ran a broadband promotion with Airtel, where we were giving broadband connections with the Xbox 360. The intent was the same; to fill the pipe up, and telcos are keen to partner with us on that front. So there's plenty of scope now and it'll be a while before we get to the point where we'll need broadband penetration to grow.
Microsoft recently scrapped Microsoft Points and Xbox Live content is now sold in local currency. The surprising outcome of that is that games on Xbox Live are way cheaper than before, and in most cases, cheaper than PSN and retail. Is Microsoft India consulted on these prices or is it just an automatic conversion that takes place?
Game prices are based on multiple factors, so it's not just a case of a Rupee conversion. On Xbox Live and at retail, we're always looking to ensure that there are games available at lower price points. Very soon we should be in a position to announce key titles that would come at much lower prices than they are at now. It's a reflection of the same effort that would also be seen on some titles on Xbox Live.
Even some of the newer titles, which are maybe Rs 3,000 at retail, are available for around Rs 2,000 on Xbox Live. So is this something you guys are pushing for or are these prices set externally?
What I can say is this is not because of the move away from the Points system to currency. Any game prices getting reflected is more an outcome of how certain titles are being looked at from a pricing standpoint in the market. While decisions on game pricing on Xbox Live are taken by the regional office, we are more concerned with ensuring that prices get lowered at retail, and that those are then reflected on Xbox Live as well.
Microsoft has partnered with Redington for Xbox hardware and software distribution since the launch of the Xbox 360. Redington recently stopped distributing EA's Xbox 360 games in India. Is there any change on the first-party front?
First-party and second-party distribution for Xbox stays with Redington. The EA distribution change was a mutual decision between Redington and EA, and I wouldn't want to comment on that, but Redington is very much still our distributor for console, accessories, Xbox Live as well as first-party games.
The US Dollar has been driving up game prices in India. There aren't really any first-party Xbox 360 games coming up, but are you looking to make any changes to game prices across the board, or are you sticking to current prices?
We're currently looking to dropping the prices on some games. We're not looking to increase prices. The prices we control is for first-party games and at least for the portfolio we have in the market, we're looking at how we can effect a price drop there. Despite the Dollar price increasing, we believe that the need in the Indian market is to have game prices at a reasonable level.
The Xbox 360 is still expensive in India if you look beyond the 4 GB SKU. Do you have plans to drop pricing on the hardware as well?
No, I don't see any drop in price happening on the console side. A lot of it has to do with the way the Dollar is behaving these days. It's putting a lot of pressure on the overall business, even in terms of just maintaing that price. Our focus is to bring in more value for the price the consumer is paying.
Would there be a bigger chance of a price drop once the Xbox One is launched internationally?
I don't think there's any conversation happening inside the company right now in that perspective. The countries that are launching Xbox One in the first phase also have a very strong plan to sustain the Xbox 360. In India as well both both would continue to run, because there would be demand for both the higher end Xbox One and then the Xbox 360.
Can you share how many users and Gold users there are on Xbox Live from India?
Unfortunately, we can't share numbers, but to give you perspective - in terms of the installed base we have in the country, till about 12-16 months ago, the overall Xbox Live attach rate – free and paid together – was about 30% to 35%. As we stand today, Xbox Live penetration is close to 66%. So we've seen a doubling of the overall attach and almost three times the growth in paid memberships. A large part of this has to do with the fact that we've started actively talking about it and making sure consumers understand what Xbox Live is; why they should be going for a Gold membership.
We're getting a very positive response on some aspects of it. In multiplayer, for example, where there's a remarkable improvement in connectivity and gameplay quality. YouTube on Xbox Live is becoming a big app. A lot of people are giving us feedback that they're using Skydrive and Internet Exploter a lot. Another positive change we've seen on the gaming side is that there are more and more people downloading paid games. A lot of demos used to get downloaded before, but we're starting to see people paying money now.
At retail, you've announced a trade-in program with Game4u, where you're offering a discount in exchange for a PS2 or PSP. What is the idea behind this and are you planning any other promotions like this at retail?
There are a couple of things you'll notice, which we've started at retail. One is the EMI offer, which we've started with a few large format retailers like Croma, Reliance and Landmark. They've introduced 3 and 6 month EMI offers with zero down payment, interest and processing fees. The idea is to just make the box more affordable for the consumer. The PlayStation one is more of a pilot we've done with Game4u. The intent was that we know a lot of people who have shown an interest in upgrading from their older devices. We've received this feedback consistently on social networks and otherwise saying that they would like to trade in and go for the Xbox experience.
Coming back to Xbox One. From the time it was annoucned to where it stands now, there's been quite a change in the philosophy around the console with regards to connectivity, DRM, used games, etc. Do you think those changes make it a more attractive proposition to India?
The way we should look at this is that, this is a company that announced a certain direction with certain features and functionalities, received feedback, and immediately took action on some of that feedback. There will always be two views to this, but I think this is more about listening to the global voice and looking at what consumers want and working towards delivering that. In isolation, it's difficult to comment on whether they would or would not work in India, but I think the general direction, where we're headed now, seems to be more positive.
Is there anything else you're planning for Xbox in India for the near future that we haven't covered?
One thing we're superbly excited about is the Xbox Live currency cards that are coming out. While Microsoft Point cards were only for the Xbox 360 platform, once you get the currency card - which will be in two denominations (Rs 1,699 and Rs 3,399) – in your Microsoft account, you can use that currency across all Microsoft platforms - Windows Phone, Windows 8 as well as Xbox Live. I think this provides huge scope. It opens up the entire Xbox Live experience through connected devices like PCs and tablets, and that's extremely exciting for us. We're looking forward to being in the phone, tablet and PC isles at retail, showcasing the currency system. That's going to dramatically help us in terms of Xbox Live adoption, which is central to our strategy in the country.
Do you think having real currency will help psychologically to push users to purchase content more than Microsoft Points did?
I think the fact that this currency will be available across multiple platforms, gives you the ability to use it at will. So you're not just paying for Xbox games or Xbox Live, you could also buy apps or games on the Windows Store. Secondly, when we bring in more entertainment content, that's when consumers will know where to spend their money. So we're going to give people more reasons to buy content on Xbox, both entertainment and gaming. I think consumers will see a lot of value in taking these cards up.
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