In your keynote you talked about a higher investment in Europe. Can you tell us what the money is being spent on?
I can’t give specific details – I’m sure you’d be surprised if I did. But the idea comes from a start point that we believe we must continue to excel in content. That could be first-party content or third-party content, and it can also be an investment in the development community. And we have been looking to ensure that we have the right framework in place to support that community.
From a first-party perspective we have Lionhead and Rare specifically in the UK. Lionhead is releasing Fable II, which is now completed and ready to roll and looks absolutely amazing. That game is interesting because as an RPG it is broadening the market and will appeal as much to non-gamers as it will the core – that’s a testament to the work of Peter Molyneux and his team. Microsoft could have gone down one route with that game, but we made a decision to invest in making the game bigger, better and broader.
Same with Rare and Banjo, which is a fantastic franchise, which we have chosen to invest in. That and Fable are two crucial franchises for us – and as you know this is a portfolio business.
So we’re going to invest in building franchises from a first-party perspective, and the dedicate resource to them to prove we can always produce triple-A titles.
When it comes to third-party we’re going to partner, where possible, with third-parry publishers to ensure that Xbox becomes the platform of choice – that can be through exclusive gaming, exclusivity windows or exclusive premium DLC. And we’re seeing already that for publishers who are multiplatform, the PDLC route performs better on 360 than it does on any other platform.
Alongside that you have the community element – and we have to grow new talent in the industry. This is us supporting the industry as we know you have to bring talent through. It’s really difficult today for new developers to breakthrough and for them to get people to look at their games, and it’s really difficult once someone has looked at a game to give them access to sell that game on.
We’ve also got two new developer account managers dedicated to Europe, which we’ve never had before, to really work hand in glove with developers across the whole suite of size and shape companies in the territory today.
So the commitment is there from us to support the entire industry on all fronts.
You mentioned broadening the market with Fable – is that something you’re looking to do with all first party games?
Well, Gears of War is probably not a ‘broadening’ title – and I’d never suggest we try and do that to a franchise like that. But when you have a game like Fable which is based on the basic premise of story telling and escaping into another world I think you have an opportunity. It takes a visionary like Peter Molyneux to do that, and he does exceptionally well. I think what you’ll see is that we will continue to have games like Gears for the core and also games like Lips or You’re in the Movies, for mainstream gamers – but also games that sit in the middle. Because most gamers are portfolio gamers, they don’t just play one game. Because you play Gears of War doesn’t mean you won’t sing along to your favourite rap song on Lips. What we have to do is ensure that our portfolio is wide enough and deep enough so that once they come to us once, for the next experience they want we have something for them.
Lips is quite a unique signing. How will it compete with SingStar which is a similar proposition but has been going for over four years?
If you look a what people don’t like about existing karaoke games it’s that you’ve got wired microphones which look like they’ve come out of a toy shop and a fairly restricted song base. When we designed Lips we looked at those two major barriers. We created the wireless mics, which look and feel like real microphones, have motion sensors so you have more opportunity to get fun out of it because you can use it as a percussion instrument and even light up. Then we added in the opportunity to sing along to your own music library, and have PDLC on top of that. We think that’s a compelling substantially differentiating singing proposition.
In the keynote you said other interfaces can be quite gimmicky. Is that something Microsoft is wary of when it looks to implement it’s own ‘peripheral strategy’? I assume you’ve been watching the Wii’s various games…
I think it’s really important that you don’t underestimate the knowledge base of the consumer. What Nintendo have done with the Wii is truly fantastic – there is no question about it. But I think sometimes there is a thin line between gimmick and great gameplay. We’ve seen some research that says 60 per cent of people who bought a Wii Fit play it once and don’t play it again. So we have to get the balance right, because what we are doing is bringing new consumers into the market for the first time in their lives they are playing games sometimes – and we have to treat them with respect.
And at the end of the day that comes back down to creativity. We have to ensure that the peripheral strategy that anyone employs makes sense and delivers a truly game changing experience. Because if it’s just ‘okay’ it will end up in the cupboard under the stairs.
What kind of ways can Xbox, once you’ve attracted new gamers in, keep people interested? Is it just range of content as you were explaining?
It is range of content, but critically it is also Live. Live is going to be, we believe, a significant part of the glue, incentive, motivator – however you want to put it – that will keep people actively engaged in the brand and the console. So if it is Lips, or Guitar Hero, or Rock Band, or You’re in the Movies, there is always a connection to Live. Because Live today is a hugely successful social network. And what we will do is continue to build core attributes of Live into gaming and vice verse to make sure that content plus services really, really works and gives the end user a reason to subscribe to Live or interface with Live.
So it’s having you Avatar in a game. Or in You’re in the Movies posting the movies you’ve created online for people to see. Or as a gamer, it might mean signing into Live, creating your Avatar and them share your photos or your contacts list. We haven’t told people that you can do that online, but what we will do is use the broad content to bring people into Xbox and then what Live will do is enable them to have a truly enhanced experience with their console.
So I guess you have a message to get out to those more casual players that Live isn’t just about head-to-head multiplayer, which it traditionally has been seen as?
That’s completely right. And in truth that’s where the brand for our consoles come from. We come from a hardcore territory where it is about multiplayer, competing and playing head-to-head. The new Xbox Experience, and things like Primetime, the Avatars, and the new local content that will be available on the Marketplace is exactly how we are going to chance people’s perceptions of what Xbox Live is. You can still do all the multiplayer stuff – that’s important for millions of people – but in parallel with that we will continue to broaden our offer. To ‘360 degrees of entertainment’ if you will.
You say Xbox Live PDLC is the big opportunity – and Activision and Viacom have singled it out in their financials as key – but what is making it work on Live? I’m keen to know what Microsoft thinks is the right way to do it.
If you’re a gamer and have found something you enjoy doing, and there is a way to keep extending that experience you will take that option. And what downloadable content does is expand your experiences, whether that’s map packs for Call of Duty or songs for Guitar Hero. It gives the end user a chance to take a game experience further.
That’s good for a number of reasons. We also know that games that have successful downloadable content tend to be traded in less. And they tend to generate more revenue for the business.
So overall, a lower trade-in rate means better satisfaction, which is good news for the software and the brand. And when he sequel comes out that’s good news too.
So I think successful DLC is about having consumer insight and understanding how consumers want to stay in a game and how to deliver that. You will see us do PDLC in a much more aggressive way, and that’s talking about it and promoting it.
New announcements are due for Xbox Live content. Can you give us a clue as to what they related to?
We’re going to focus on Live in Europe and we need to make sure that the content we offer is really strong. So in the US the deal they announced with Netflix is a big coup; it’s transformational in providing a significant amount of content on the video marketplace. We’ve got a good amount of content on the video Marketplace for UK, France and Germany but we’re going to be working very closely with local studios in the European markets to bring more and more content to Live. We’ve already announced a deal with German studio Constantine to release films for that market – and we’ll be doing more and more of those types of deals for that kind of content.
And I think you will also see more activity from an Xbox Live Arcade perspective – plus, as I’ve said, premium downloadable content.
So that’s a hunt for local content for specific territories? It’s a far cry from the ‘we have to think global’ message that we were hearing from format holders a few years back…
We will continue to do global content when it’s right – such as GTAIV’s downloadable content. But there also will be regional and potentially local content as well as we seek to drive cultural connection in those markets.
You also said in your keynote that there was a talent issue facing games development. Looking back at your career with Nintendo, I-Play and now Microsoft, what mistakes are being made by the industry on that issue? What can be done to improve the talent pipeline?
If I look back, I think it’s clear that the industry found it easy to become focused on what it does best, and do that bigger, better and more expensive. And that’s not necessarily the right answer. The challenge is, as we get bigger and better and more successful is to engage those people on the first rung of the ladder into the industry and be there to really give them a leg up. When I was at I-Play for instance we did a mobile gaming competition with Motorola to get the next generation of developers in – there are plenty of opportunities like that for the successful companies to reinvest their time, money and resource into what I do believe is critical to the industry, and that’s the next generation of game developers.
That goes back to the wider issues like accessibility, and support, and it goes back to giving people a shop front which we plan to do with Community Games sold via Xbox. Because there’s no point giving people the means to make a game without the chance to retail their games.