While Sony strutted its stuff at Gamescom through the power of a press conference, Microsoft walked a more modest path with a Play Day event, with hands-on opportunities of a raft of Xbox 360 exclusive games including Halo: Combat Evolved Anniversary, Gears of War 3 and Forza 4.
At the same time Microsoft issued a press release, detailing the games due for release for Xbox 360 over the next 12 months and reiterating its promise to have the number one game console worldwide.
At the event Eurogamer caught up with Chris Lewis, vice president of Interactive Entertainment Business for Microsoft Europe, to find out exactly what being number one means, to ask whether Nintendo’s Wii U, due out next year, was a threat to the Xbox 360 – and to put to him all those juicy next Xbox rumours.
Eurogamer: Microsoft has been clear in its intent to have the number one console worldwide with the Xbox 360. How do you define number one?
Chris Lewis: Our global ambition for number one status requires us to be number one in Europe. We enjoy a very strong position in North America. In Japan, it is a challenge for us, but it’s a market we continue to invest in. But Europe is the region that has to move into number one status in the aggregate.
We’re already number one in a number of countries around Europe. UK is a good example of that. We’ve always held a very strong position there. But given the textured nature of Europe, our ability to apply the marketing focus, retail strategy and partnership strategy as a one size fits all approach in Europe, isn’t and hasn’t been sufficient for us to get number one everywhere.
We’re getting way more targeted in the way we approach markets. In Germany this coming year, for instance, we’re going to spend a considerable amount of money in the media. That isn’t something we’ve done in previous years. We’ve invested very deliberately in Germany. We think with Kinect and what it brings us as an opportunity, it’s a great time for us to really pump adrenaline in the arm of the business here in Germany.
So, tons of things happening. But yes, you’re right, number one status is the ambition. We love the success so far. We’ve got 55 million people with Xbox 360s out there. I don’t break out Europe specifically but I’m sure you’re fairly clear on how those numbers pan out.
Eurogamer: So when you say number one you mean sales?
Chris Lewis: I mean purely install base with consumers. We don’t count units unless they’re actually out there and installed. This isn’t shipments. This isn’t revenue. This is install base of consoles.
Eurogamer: How does that goal tally with the Wii, which is on a 77 million installed base?
Chris Lewis: Yeah, it’s a big number for us to run at. There’s no doubt. But install base is one element of it. It’s not everything. We also overlay our share of the third party ecosystem of software and our share of the way we attach games. We enjoy a healthier attach ratio than anybody out there right now. Something like 10 games get attached in the UK for every console, for example.
So when you overlay those metrics and, recognising that we may not be number one in every country in Europe, in the aggregate we have number one ambition.
Eurogamer: You mentioned Japan. We’ve heard rumours that the Xbox 360 is suffering a difficult time there. Are you pulling out?
Chris Lewis: No, of course not.
Eurogamer: What are the challenges you’re experiencing there?
Chris Lewis: It’s a challenging market. We are up against very strong competition there. All our competition is strong. We’re very respectful of what Sony and Nintendo do and where they’ve come from and what they bring. Nintendo, particularly with the Wii, has opened up a market opportunity there. We’ve leapfrogged that handheld technology with Kinect. What we’re seeing is users love using their own body without worrying about how to work a controller. So we see ourselves as, frankly, a company that does bring an awful lot of firsts, and we’ve enjoyed fabulous success with Kinect.
Japan remains important to us. We’re very committed to that market. The development community there is very important. Tokyo Game Show will be a notable element in the year, as usual. But I’m focused on EMEA. I’m measured on our success here in Europe, so I’m pretty fixated on what we’re doing here.
Eurogamer: How important are exclusive Xbox 360 games and exclusive DLC, such as the Call of Duty map packs, to the business?
Chris Lewis: They are important. DLC windows of exclusivity are critical for us for differentiation. We’ll continue to bring those exclusives through our own studio work, with Gears and Forza and other titles.
But we’re also pretty confident the cross-platform experience is better on Xbox. We enjoy great success with Call of Duty. Live is the oxygen that runs through our business. The experience users have through Xbox Live is a fundamental differentiator for us versus other platforms. FIFA is another one. Certainly here in Europe football is a religion. Our ongoing commitment to experiencing better and playing better on Xbox is partly a function of what we do with Xbox Live.
So, exclusive IP is critical, of course. You’ll see more of that over time. You’ll also see us, though, committed to working with people like EA and Activision on their cross-platform consoles to make sure they play better, and they integrate better across PC, phone and the console in a way other people’s just simply can’t.
Eurogamer: So where there are multiplatform games, you work with publishers to try to make the experience better on Xbox 360 than it is elsewhere?
Chris Lewis: Yes we do. That is important. We have good, healthy partnerships with all the publishers around the globe, now. Over the last 10 years those have developed and they like the momentum we have. It’s hard to trivialise 55 million units out there. Everyone loves the install base. We did grow 20 per cent last year in Europe. We want to grow even more this coming year. If you think where we are in the life cycle, that’s a fairly unusual ambition at this time.
Our publishers, they see that. They see that ambition, and they know how much money we’re going to spend. They know the depth of the partnerships. They love the technology. And they understand we want to differentiate ourselves through DLC or the beauty of the integration across the different device types that we have and are uniquely placed to be able to offer versus our very good quality competition.
Eurogamer: What is the policy regarding multiplatform downloadable games? Do you have a policy to make sure that downloadable games released on both platforms are at the very least launched on Xbox 360 at the same time with feature parity, or you won’t publish them on Xbox Live Arcade?
Chris Lewis: Yeah, as you can imagine, we focus on that. We’re a little biased, so obviously we’re going to look to protect our own space as best we can and get exclusivity. Whilst I can’t be specific about the terms and conditions, you can be very confident we seek to maximise our own advantage to ensure the playing field is even, and certainly plays to our advantage wherever possible.
As you can also imagine, our partners have to be mindful of the relationship they have with all platform holders, and they need to be equitable. But there are contractual situations where we get agreement with different people to do different things, and through what we have available on Xbox Live, we are able to offer things other people can’t offer, that allows that exclusivity and unique elements to it that might not otherwise be available elsewhere.
Eurogamer: Would you allow a downloadable game to launch on Xbox Live Arcade it if went on PlayStation Network first?
Chris Lewis: We’re not keen to do it. I wouldn’t say never. We wouldn’t be specific about that. But I’d be surprised if we saw that as something we’d encourage. But, honestly, and this is going to sound a bit contrived, we just want what our consumers want from us.
We want to be where they want us to be. We want the quality bar of what they experience from us to continue to go up. I think it has to happen. Everybody’s got to do that. If we want to continue to command healthy average selling prices, which we all do, that which we offer our consumers has got to keep getting better. Despite the fact it can be irksome to have such strong competition all the time, it actually does keep us on our toes. It’s great for everyone, and it makes for a very healthy race to higher and higher levels of quality of game experiences.
We’ve got Disney and Star Wars here. Those kinds of entertainment relationships, they’re not trivial to negotiate, but they’re very important for our success and ambitions in Europe, in particular, and parts of continental Europe where we haven’t done quite so well in the past. What we can do there with Kinect gives us a unique position of growth at this relatively late stage in the life cycle.
Eurogamer: Is the Wii U a threat to the Xbox 360?
Chris Lewis: We’re mindful of what it’s doing. We were very focused on it at E3, and very keen to hear what they had to say at E3. I wouldn’t trade places with anybody right now. That’s the way I’d answer that question. With what you can see here, with what I know is coming that I can’t talk to you about right now, both by way of content for the core, and the entertainment partnerships we’re negotiating for Xbox Live, I wouldn’t trade with anybody. Not to trivialise what everybody else is doing, because that’s not what I’m trying to say.
Eurogamer: You’re excited about what’s coming.
Chris Lewis: Of course. We feel very privileged to be part of this right now. Microsoft’s very single minded. When we set out to do something we’re tenacious in that and we’re prepared to invest. From the leadership of Don [Mattrick] right down, it’s very clear we have to make sure we step up to the plate and deliver the experiences, market in an appropriate way, partner with the right people to achieve number one status.
I don’t want to be dismissive of what our competition is doing. They keep us very much on our toes, but knowing what I know, and knowing what I’ve seen, I wouldn’t trade places.
Eurogamer: The Xbox 360 is in its sixth year of life. There are lots of rumours about Microsoft possibly announcing a new Xbox at E3 next year for launch the year after. Is now not the time for the next Xbox?
Chris Lewis: I would only say it’s too long if things are stagnating. If developers are finding they’re bumping their heads against the glass ceiling of development scope, if we weren’t bringing revolutionary technology like Kinect, if we weren’t able to, frankly, completely update the UI of Xbox Live without predicating that on people buying new hardware, were those things not true I might be more in agreement with your assessment.
I actually don’t think it’s too long if the experience continues to grow, if people continue to flock to it and they feel like they’re getting great value. That is everything we’re experiencing right now. That’s how I’d answer that.
I’m being charged with more growth this year versus next year. Sure, I chew the back of my hand a little bit when I think about what that means. We had a very good year last year. But, I do also believe there is sufficient in what’s coming and exists right now for that to be a very realistic ambition. We’re not talking about any additional or new generations of hardware at the moment. We’re fixated on what we’ve got going on right now.
Eurogamer: Companies have to think ahead, though.
Chris Lewis: Of course.
Eurogamer: In an R&D sense you would imagine that would be in the works.
Chris Lewis: Sure. As you can imagine, of course we’re working on all sorts of different things. We do that all the time. Frankly, in all aspects of Microsoft, not just what we do with Xbox, our R&D investment is second to none. But to your point about life cycle timing, we’re in pretty good shape.