Shane Kim
Microsoft Gaming Studios
Q: Was not acquiring Blizzard a huge failure? They took a look at it and unfortunately it just didn’t quite work out for them.
Q: Where have all the developers gone? Bizarre, Bungie… It is a very fluid industry. Still working with a lot of great partners. Can’t control the behavior of other publishers when they want to make acquisitions.
Q: What about Bungie in particular? Group of talented individuals who really wanted to be independent. They had plenty of creative freedom to do what they want. We want to work with people who want to work with you, so MGS wanted to do what they could to make Bungie happy.
Q: Is there a problem holding on to top talent? Clearly there are going to be people who don’t want to be part of a large company like Microsoft. Not just a games company or even just a regular games publishers. Lots of challenges that go along with that. Peter Molyneux is a good counter example.
Q: Waiting for July 1 to start spending again? More focus on profitability than growth? Very proud of results we’ve been able to generate. Very successful fiscal year, but it doesn’t end there – lots of objectives to achieve that require ongoing investment. Just reorganized teams around more senior leaders a few weeks ago.
Q: Move 360 consoles or run business on its own? Both. Need to take mission as first party publisher very seriously. More and more cross-plat for 3rd parties, so really need to make key 1st party exclusives. The pipeline is very stacked even if we haven’t been making a lot of announcements about it: like Fable 2. Need to build on the great foundation over first 3 holidays.
Q: Halo franchise future? Most active title, more content coming. Peter Jackson interactive series in the Halo Universe. Good opportunity to build on that foundation, like Halo Wars.
Q: What is internal in MGS vs 3rd party publishers? Dominant share of market is from 3rd parties so really promote that – goal is to drive install base and lets Ubi, EA, etc sell games. Great 3rd party cross platform games do better on the 360 by 2:1, 3:1 or more. Create an ecosystem for third parties.
Q: GTA deal? Not part of MGS but it’s a pretty unique title. GTA only complete on 360.
Q: 360 a testbed that then go multi-platform with follow-ups? Bioshock… lots of loyal customers now and maybe it’s a risk that that goes to other platforms but those fans start on 360. If we build a strong ecosystem that generates more publishers prioritizing the 360. Lead platform for 80% of devs.
Q: Goal is to be #1 in categories that you compete in, so what about MS and are you failing at #2? Way too early to declare a winner there. Lots of success and momentum for 360. Easy to focus just on console unit sales but if you look at consumer spending it’s a different story. 45% of market spending on 360 in 2007.
Q: But Nintendo getting new gamers in? Hardcore focus on 360 too limiting? That’s good for us too! Overall pie is growing. Guitar Hero & Rockband most successful on 360 so don’t accept the premise. Never be surprised by what Nintendo does. Lots of assets & equity & loyalty with consumers from Nintendo. A lot of different facets for competing with that customer. Hardcore, M rated games define some of our platform, which can make it harder to broaden. Ton of E & T content on 360 but not getting the message out – not just a hardcore gamer platform. Drive towards mass market pricing will help too.
Q: People still clamoring to find a Wii is a different audience, isn’t it? That’s the future of the industry though, to broaden the definition of interactive entertainment and increase the appeal to more people. Opens up exciting content opportunities for devs. How are those customers really using the console and what are they buying?
Q: If it’s a 5 year generation and we’re 4 holidays in, that’s a long time, where is the 720? We never said the generation is 5 years, expect a very long lifecycle, quite different from Xbox 1 which had a 4 year cycle. Early launch compared to Sony was a big factor in success.
Q: PS3 outselling 360 in Europe, is Sony doing it right now? Don’t underestimate Sony, winner of last two generations and lots of great assets and consumer equity, huge strength of brand. NA core gaming market, Europe is much more price sensitive with bigger brand equity issues.
Q: Fable and Alan Wake are great but is 1st party deep enough to compete with Sony? Studied Sony’s efforts greatly, they have to ramp up the 1st party because they see the same things in 3rd party – that doesn’t mean you win an exclusive battle.
Q: Top 10 games of 2007 on the PC, only 1 from Microsoft and that’s from 2005: Age of Empires 3 – is that disappointing for MGS to not be generating those successes? Several years ago admitted not enough in the PC market, now doing more like Live for Windows. Mistake to look only at MGS & first party on Windows. Arguably more exclusive content on Windows. Sure, we could do more but don’t want more titles for the sake of more titles.
Q: Hijacked by Windows division and doing Vista exclusives? We love Windows! Part of our DNA to drive platforms.
Q: Vanguard, Conan, Crisis – not successful, are you rethinking this strategy? We want great outreach and relationships. Going to continue to see us do that.
Q: Meaningful for MS to get into the MMO business yourself? MMO gaming is a huge growing category but all that growth is largely from one big kahuna. Tough space to compete in. That’s a genre we clearly haven’t had a lot of success in. But we don’t *need* to be in that space. Not a long track record there.
Q: Zune – do you own an iPod? Yes, but more Zunes, and the iPod was a gift! Zune as a gaming device? Never say never, but important to stay focused on the most important tasks. Launching a portable device is a huge thing – Zune is competing in the music space. Zune’s not just the device but the service and the software that drives it.
Q: Cut of 360 games but not PC titles, so shouldn’t be investing in Windows? Gaming is a core pillar of Windows usage and from a company perspective we support that. Need to pay attention to how to make that a success. MGS part of Microsoft and that’s part of our responsibilities.
Q: Peter left, Mattrick not really out there, is Kim the new face of 360? Any tattoos to share? Don’s first 6 months has been focused inwards, not really impacting last holiday. Thinking about building on the success for the future. How do we sustain profitability, that’s the question. Driving strategic goals from Don. Peter was a good “face” of the console but not just one now – need a lot of different spokespeople.
Q: Sony outspent 2:1 over holiday, that a sign of change? Well, they spent a lot of money but look at the results. We’re really happy with the results and how holiday 2007 went. Did better than we expected through the holidays, starting to have a supply issue again that may cause trouble for January sales. Work to do in Europe, it’s a key battleground.
Q: Live successful at getting gamers to download, how long before gamers turn there instead of retail? Does that change dev strategies? Long time before there is more digitally than retail but clearly a part of things today, very successful for us, MANY pieces of content from Live. Xbox Originals off to a great start, Arcade successful, 100+ titles. DLC as a strategy to extend a relationship around a particular title is valuable. Infrastructure built over last 5 years to enable these scenarios. Episodic delivery like GTA or Peter Jackson’s Halo project. Now can make that a reality.
Q: 2007 would be the year that determines the winner of the console year. If the war isn’t over what are the next clues to see who is winning? When will market shares solidify? A few weeks ago people predicted the Patriots winning… focus less on pronouncements years in advance. Lots of discussions about when to launch 360 and getting out in front. That was the right strategy for us but no one thinks the race is over. Powerful and formidable competitors with long legacies and heritage. Success in US 3:1 install base over PS3, good momentum but gotta keep plowing away.