Interview with Chris Lewis (Microsoft)

Click: Hi Chris, thanks for taking the time out from your schedule to talk to us, I assume you’re very busy at this time of year… this has been a particularly big E3 from Microsoft!

CL: It’s certainly a big E3 from us – it’s always very important for us. It tends to ebb and flow, and this year we’ve almost got an embarrassment of riches in terms of announcements. We’ve got so many chapters in the book, it’s a question of just how many we’re going to make public on the day and how we’re going to line them so that it’s meaningful to consumers and so that we can satisfy ourselves that we’ve done a good job of representing all the fabulous news we’ve got.

It’s great to be able to talk about Kinect, to announce the name and the availability, and to announce the new 360, with the new design with built in WiFi, 250GB hard drive, sleeker look and all the same price… AND the content and the lineup of games and everything else – we’re pretty excited about what we’ve got to offer here at the show, and we’re very excited both to the reactions we’ve had for Kinect and the announcement of the brand new 360 console.

Click: You guys did very well to keep the new 360 under wraps for so long… It’s obviously been coming for a while, how did you manage to keep lips sealed?

CL: It certainly wasn’t a trivial job, I assure you! It’s a tricky line to tread to make sure that you’ve got your partners are sufficiently versed at the right time to make it meaningful in retail whilst keeping it quiet. We set out this year very much to make that a big surprise and we’re really pleased that we’ve managed to pull it off. The reaction as you saw was euphoric (laughs) and that’s great for us!

One of the things we like to be able to do is surprise with positive news, and being able to offer everything we can with the new one at the same price as the old one really reinforces our commitment to offer great value. That’s got to be the case; we’ve learned that over the years. You’ve got to offer a fabulous quality of connected consoles at the right price

Click: You mention the built in WiFi with the new 360, with that in mind are there any plans for a knock on reduction in price for the WiFi adapter for the original 360s?

CL: No plans at present for that. I think what we’ve learned is that with 25 million of our 40 million sold 360s connected, that Live is the oxygen of the business so building top quality WiFi into the console felt like a very natural progression to make, and then retail, we’ll work with retail in terms of existing inventory out there, but we’ve got no particular price announcements to make. We’re happy with the way the inventory is flowing out of retail right now.

Click: Have you guys been happy with the general reception of Kinect at E3?

CL: Yeah, we were able to talk about it last year in conceptual terms as Project Natal, so to be able to announce the name at E3 and to talk about Kinect 360 as well as showing some of those fabulous experiences we offer has been fantastic. You can describe it to people, but that only goes so far – it’s only when you put somebody in front of Kinect and allow them to experience one of their titles, whether it be Harmonix’s dance game, or one of our own games be that a sports game or racing down a river on a raft, but it’s only when you actually get in there and experience it that you realise the removal of that physical barrier of the controller is a huge step forward that opens us up to a brand new audience, much wider age ranges and a much more casual appetite in terms of games.

Click: You mention opening things up to more casual games, do you feel you’ll be taking on Nintendo who have really made that space their own since the launch of the Wii?

CL: They’ve done a great job, there’s no doubt, but what we’ve done is that we’re now innovating and showing leadership in not going for more motion control devices and putting more gizmos in people’s hands. We’re now saying to the consumer that the more natural and engaging interface is full body control, and I think if there is a step that we felt was important to take was to continue innovating like we have in the past.

We are synonymous with first like that. We had the first high definition console with 1080p streaming of high definition video and things like that. We pride ourselves on a service level agreement with consumers that will always come with the next innovative step based on what consumers want

Click: In terms of the interface itself, there’s been a lot made of the whole “no buttons” thing, is that something you think will put off hardcore gamers, or do you think that full motion control is something that will catch on among that market?

CL: I think it will yeah. As you saw in the press conference at E3 we led off with controller based, hardcore, more mature deeper wider content which I think will remain true to that audience. They helped define us, so we’re not in any way going to step away from that audience. But I also think that a lot of that audience will actually really enjoy some of the Kinect 360 experiences that we showed on the stand and the future ones that are coming.

I think the lines are more blurred than people think in terms of people wanting to jump into those types of experiences so I think we are in a complimentary situation there. But for sure what Kinect allows us to do is to open ourselves up to a much wider range of consumers, particularly in southern Europe where there is probably a more casual gaming taste – we’re excited about what that opens up for us with Kinect.

Click: How has the developer uptake been with Kinect? What are their views on the system?

CL: We shared it with them some time ago as you can imagine, in fact I think it was something like 14 or 15 months ago that we took the Kinect technology out to partners around North America and in Europe and their reaction was wonderful. If you take someone like Ubisoft who are fairly well advanced in the space already, you can see from what they were talking about at E3 at their own conference and around their stand that they were already at quite a high level of advancement of utilising the technology and creating fantastic experiences already.

So yeah the developers have all been great. The reactions have been fantastic, and they love developing for our platform – that’s always been the case and it’s still the same platform, but obviously with a new interface and design now. There’s lots of excitement about what it means for the developers now, realising their development dreams with Kinect based experiences.

Click: Are Microsoft pushing developers to include Kinect compatibility in their titles, or is it purely at their own discretion?

CL: We don’t need to persuade anyone as to what this means or push them to use it. I think what we’ve found is just by talking to developers about what our vision is for this interface, that we can then step back and let them developer their own wonderful ideas about what kind of content they could bring, and we’re encouraging that. But the quality bar, obviously, needs to be high and the consumer experiences need to be good, so it’s not a case of porting a few games.

Its all about brand new, non controller based, full body experiences. There’s a lot of enthusiasm. We’ve only talked about 15-20 titles for launch, but there are a lot more coming.

Click: Is there the potential there to use the controller in conjunction with the Kinect hardware, or are they mutually exclusive?

CL: That’s a good question! Right now we’re talking about the pure full body control experience, but over time I think we’ll see some level of hybrid games come out where you might spend the majority of your time with the controller but you might want to use voice or gesture to compliment that. I think that will come, but at the moment we’re talking much more about the pure Kinect games – and that’s what we’re choosing to showcase right now.

Click: We were talking to the Bungie guys at X10 and they were telling us that they’re literally draining every last drop of available processing power out of the 360 for Reach; does Kinect open up a new avenue for the console just as it’s maxing out in terms of graphics?

CL: That’s a great way to describe what I think this means! At five years in we’re probably only at the half way point in the 360’s life cycle, thanks to what you’ve just described, which is very exciting for us and developers. It gives a level of consistency with the platform for the next three to five years…

Click: Everyone seems to be pushing this ten year life cycle instead of the three or four years we had seen previously. Why is that?

CL: I think we’ve just touched on it in the last question. When you offer a consistent development platform, towards the middle and latter stages of the life cycle you’ve really got developers fully exploiting the technology and creating huge gaming environments and wonderful high definition experiences, and we don’t want to keep forcing the consumer down a brand new hardware path in order for them to experience new interfaces. Take Live for instance, we can completely reset the user interface for Live like we did last year, without forcing people to buy new hardware. Consumers like that, and it offers added longevity to the platform which is good for both the consumer and the developers.

Click: Has the new revision of the 360 finally ironed out the RROD kinks of earlier versions of the system?

CL: We’re very happy with the boxes we’ve been shipping for some time now and, as you saw from our warranty extension, we’ve stepped up to that challenge in a positive way and our consumers applauded us for it. We’re really happy with the latest development cycle we’re in and we’re getting great feedback from everyone about it!

Click: Digital distribution is really growing these days, where do you see that going? Can you envision a non disc based gaming industry at any stage in the near future?

CL: In time yes, I think that’ll come. I think there’s concurrency there – there’ll always be an appetite for retail based physical products, I think there’ll be downloadable versions to enhance that physical purchase and compliment it, and then I think some of the experiences over time will be fully downloadable.

We’re already offering games on demand ourselves, which is the older catalogue titles which maybe aren’t carried any more in retail so we make them available for download. Then you’ve got levels, maps, uniforms, weapons and all of those complimentary things that go with original physical purchases is the way that the business will eventually go.

Bandwidth speeds make a difference, as you know, but there’s an anchor factor on how fast that can improve, but over time we want to be where our consumers want us to be and people want to consume digital information in that way; whether it’s movies, music, games or anything else for that matter.

Click: How about a cloud based system like OnLive for the future?

CL: We look at everything like that, I think the way I’d describe it is that we centralise what we do based on what the consumer wants. We build our business around consumer appetite, so I think if the technology is there and it’s a level of enhancement that people want then we’ll be there; in the right way and in the right time. I think we’re uniquely placed because we’ve got Xbox Live there already, which is so important, and with our partnerships with Facebook and Twitter we’ve proven that it’s going to grow into a much larger thing in future based on what consumers want.