Grab a cup of coffee.
We talked to Anshu Mor, who is the category lead of interactive entertainment business at Microsoft India, about a lot of things concerning the Indian gaming market and the Xbox brand as a whole. He had a lot to say, so grab a cup of coffee and give it a read, it will take a while.
Ravi Sinha: Tell us about the scenario of the competition between Xbox and PlayStation in the future.
Anshu Mor: When we look at our platform and we look at others who are playing in the same space, there are multiple levels in which we are competing against them. One is around how motion sensing is as a technology, more so from here, and the reason that is important is because that attracts family audiences, new audiences which are coming onto a console and gaming. The second area we see is online services, how the entire platform plays, specific to the gaming world, and the third area we see is what else can the console do in terms of more services that could be offered, which is really the entertainment space, so that the console is not just a gaming console, but an entertainment console as well. Fourth, would be the IP we build our system around.
When we look at the competition…when we look at Sony, we’ve seen them make a lot of moves in each category but from our perspective, I think we give a far more wholesome experience. So when we say motion sensing, for example, it’s truly about full body motion. It’s not about holding another piece of hardware in your hand. When we talk about Xbox Live as an experience, it’s a mix of both hardcore gaming services, entertainment services, and now with the launch of Windows 8, integration between different devices. So I think in terms of innovation, we are far more advanced in terms of what we are offering to the consumer with just one single box and the services associated with it,
RS: Could you tell us about the integration of Xbox Live within Windows 8?
AM: Windows 8 as a platform would carry three services from the Xbox portfolio, which would make them land across multiple devices or different screen sizes including phones, PCs, tablets, etc. The first is Xbox games services, in which you would look at games coming from the Xbox Live Marketplace, which could be created for those smaller screens. They would get associated with your gamer ID, which is a secondary area of integration – the entire identity of the gamer – and that’s something you carry along. So your friends on Xbox Live, messages, notifications, which friend at what point has started playing a particular game – all of that lands on your smaller screen when it happens. The other level of integration that we bring to games per say is that we bring part of the gaming experience onto these small devices.
Today the reality is that when you watch a TV screen, you are not just looking at the TV screen. You always hold a second screen in your hand and multi-tasking. Now with gaming, what happens is…while you’re immersed in a game, like say, Halo 4, there’s a lot of gaming information that can help you play the game better, or can help you compete better if you’re online. So the game information lands on your smaller devices via SmartGlass, which is a direct connection between the device and the Xbox console. The third scenario in terms of integration is around music and videos. Whichever country we have the Xbox music and videos launched, that same service is available across all the screens that carry Windows 8. So if you see the music app in Windows 8, it is the Xbox music app, the videos app is the Xbox videos app.
So the music service, the videos service and the gaming service, all three are integrated and all of them have interplay between devices using SmartGlass as an application. So I could be playing a video through the Xbox Live video services on my console, and if I decide to leave the house, I can just transfer the movie from my TV to my Smartphone or to my tablet using Windows 8. And it’s not just Windows 8, by the way, the integration of SmartGlass would also be available on iOS and Android so we make sure that more and more customers get to have that experience with their Xbox.
RS: Can you tell us a little bit about Xbox-exclusive titles coming to Windows 8 tablets or hybrid PCs? Will we be seeing Halo 4 or any other titles releasing on Windows 8 tablets/hybrid PCs?
We have no announcements to make on Halo 4 coming on the PC screen. Just as a general trend, given that the service is integrated at the back-end, which is that you get Xbox Live on all screens now, it is just a logical movement from hereon that there would be games available which would play across all 3 screens…
RS: Even though there are no concrete plans right now?
AM: Yeah. Even though there are no concrete plans. We don’t have a game in particular to announce which would…especially a blockbuster game, which would get ported on to smaller screens but it is a logical next step.
RS: So there are no announcements to “make” (laughs), but potentially there could be something that we don’t know about.
AM: (Laughs) There isn’t any announcement. We haven’t heard of or any plans as such of any of the Xbox 360 blockbuster titles which are getting ported on to it. As soon as we have, we’ll be the first persons to talk about it because I think it’s a brilliant thing to have.
RS: Could you tell us a little about the Indian sales for Xbox 360 and how it compares to previous years?
AM: While we don’t share official numbers at a subsidiary level – at an Indian level – in the past two years, the general gaming industry, the console gaming industry, has been growing at about 30-35%. For us, the option of Xbox console as such has grown by 70% so we’re going at about double the rate of what the market is going at. And one of the biggest reasons for that is that we’ve essentially opened up an audience that never used to exist earlier, especially in India, which is the family audience. That happened when we came out with Kinect. It’s a very important thing to understand because in India for lack of knowledge for what a console could do, there was always this apprehension of bringing a console home, and parents would feel that a console would go against the key priorities of studying…it was considered addictive in that sense.
With Kinect, all that changed because suddenly, the console is considered very healthy. Playing a game on Kinect is as good as going down to the park and playing for a few hours…Normally if you play on Kinect, you’ll realize within 20 minutes that you’re sweating, and it offers a chance for the family to learn different things. Dance Central, for instance, might just be a game for some people but others look at it as a way to learn how to dance. Parents put their kids in dance classes, and right now they could just do this home. And not only the kid, but it would be the whole family learning. That’s a large chunk of the 70% growth rate that we’ve seen, while the core gaming community has grown at its decent rate.
RS: As you know about rumours surrounding the next Xbox, what is Microsoft’s status on the next console to come out bearing the Xbox name?
AM: At a fundamental level, we’re committed to innovation. It’s about bringing new experiences, new scenarios to the end consumer. When you look at Xbox 360, the current generation of console, we are in the 7th year or so of the console. In the industry, normally after 5 years of a console, you start seeing a decline in the overall volumes that you’re doing on a per year basis. In our case, our 5th year has been better than 4th, 6th year has been better than 5th, 7th year has been better than 6th, and last year, we became the number 1 console in the world. The reason why that has happened is not because there was a promise of an upgrade that would happen with the console. The reason why it became number 1 is all the innovation that we’ve done – and there’s been plenty of it – has happened around the box.
So while the Xbox 360 has remained the same, we’ve innovated with Kinect’s motion sensing and voice recognition, we’ve innovated with the entire entertainment and music space with Xbox Live, we’ve innovated with devices integration using SmartGlass. So the experiences, even with the current generation of Xbox, ahs been improving year after year and it continues to do that. SmartGlass was just a week ago, and it takes the experience to a new level. We don’t have any formal information to share, again, if and when the next version of Xbox happens but we do believe that there’s a lot of innovation besides the box, which will continue to happen through Live and Kinect.
RS: When did this transformation happen, that the Xbox which was first known as “the most powerful console” at the time, trying to capture the core gaming market, shifted to what Kinect currently offers?
AM: If you consider the larger trend of what is happening, we want to be the guys who own your living room. We want to be the center of your entertainment and gaming experience. And if you look at the broader vision of Xbox, it’s not just a gaming device, it’s an entertainment device. The reason why we look at it like that is because multiple players in the market are trying to do multiple things to be the center of your TV experience. Some are coming in through the video route, some through the music route, and some through the streaming route via whatever television operator you may have. We realize that as a box connected to the TV, there’s an opportunity for us not only to enhance the way people interact with that box, essentially thanks to Kinect which took away the controller and brought in voice and gesture movements.
We also realized there was an opportunity for us to make that box also an entertainment box. That single box then giving you the entire experiences around Video on Demand, Live TV or music, and that’s how the transformation over the years happened. We see this trend continuing, we see the single box connected to an IP network being the center of all your gaming and entertainment needs. And then if you want to carry the experience across multiple devices, we obviously have applications like SmartGlass that will continue to evolve as we go forward.
RS: Are we going to see Microsoft continue down this path of more refinement of current technologies or will there be something new and revolutionary to come out of the stables soon?
AM: Very difficult question to answer. In the sense that, it’s very difficult to classify innovation as revolutionary or not, or just a refinement. For us, Kinect is revolutionary because it’s brought in a new audience and a new way to interact with the device. The way Kinect has gone away from Xbox and also into other applications…it’s just kind of developed a world of its own. Bringing entertainment or entertainment services on to Live was possibly a refinement to a certain level. It’s a mix and match. Our attempt is fairly simple: we understand that you as a consumer, at least from Xbox standpoint, would look at us and say, “Hey, I want my gaming needs. I want my music needs, I want my video needs and maybe also my app needs, or social media needs to be fulfilled through you guys”.
So I need to find a way in which (a) your experience is simple enough, especially in countries like India. It is simple enough to get into the experience and then it is engaging enough for you to sustain that experience. Some of what comes in the future could be revolutionary but some of it could just be refinement of what we do today. When you look at SmartGlass, it’s very difficult to say whether it’s a refinement or revolutionary. Devices talking to each other – was that revolutionary? No, it is not. A lot of devices talk to each other. Can you throw content from one device to the other? Maybe you can, even in today’s scenario. But what SmartGlass did was it just made the experience so much simpler, and it brought it in a larger portfolio of things we could do within that app.
It was no longer about saying “Hey, I’m going to play a movie here and then I could throw it on the same Wi-Fi network to my TV”, which is possible today through multiple devices. But if I said, hey, if you’re watching a movie, what if I give you information about that movie on your Smartphone? What if you want to know the location of where a particular shot has been filmed? What if you want to know about the clothes that the characters are wearing? So stuff like that. We’re just making the experience far better in some cases with just refinement of what we offered and in some cases it’s purely revolutionary like Kinect was.
RS: Concerning indie game development for Xbox Live, we talk about Introversion, and it’s co-founder stating that it’s more difficult to develop for Xbox Live and for PSN – essentially, console digital media platforms – as compared to PC, because you have higher development costs versus lesser returns.
And then the development kit, which is available for $10,000 USD, and is non-refundable. What are your thoughts on this?
Console gaming over the past few years is at a stage where you need to define an experience which is radically different from what you see on PCs. I think that’s the reality of gaming. There’s a lot of debate in the market, like “Hey, will consoles be dead, will gaming land on smaller tablets and phones, etc” but the reality is that when you develop a console game, you’re developing something completely different. Now, to develop a game which different, there are multiple factors that come into play like graphics, gameplay, storyline but most importantly, the quality of the experience that you give to the consumer.
Even with indie games, or for that matter, I would probably generalize it across all games, the reality is: If you need to create an experience which is fundamentally different from what you would get on PC and smaller screens, there is a cost of development that you would need to bear. That is just to insure the kind of quality that consumers expect from console games. We’ve also seen multiple examples of lesser quality games being developed in the name of localization but those games have never worked. Even if the IP has worked with a particular audience, those games have not worked because people don’t accept that a low quality game would be available on the console. There is cost which is associated with it.
My personal belief is that that cost could continue to rise but at the same time, if the IP you are building has attracted the attention of gamers, the returns would also be higher. Yes, the risks are higher today on console gaming but if you develop the right IP – you have instances like the Halo franchise, which is more than a $3 billion dollar franchise which has been built up. So it’s like high risks, high rewards kind of scenario.
RS: But when you compare it to something like what Steam is doing – they’ve just recently launched Greenlight, and it generated a lot of hype and excitement.
At first, any game could get on there because it was the community that was choosing the games. Then you had to pay $100 to get your game on there, and then it would go through the community voting process before going to the Steam store.
How do you look at Xbox Live – or the console digital media platform – competing with Steam which launching these new measures?
AM: First, I think that whatever Steam is doing is very encouraging for the industry as such, with What they’re bringing in as a new model of adoption for people to buy gaming content and play gaming content. What remains to be seen is that at what level – and I say this keeping countries like India, emerging markets, in mind – at what level would you be able to provide the experience given the entire bandwidth of the country? The entire internet experience you have in the country. How much can you stream, at what levels can you stream and then where do you compromise – do you compromise on the experience, do you compromise on the quality or gameplay of the game – that remains to be seen. I think it’s a very interesting model to look at, if you were to look at the music and video industry, you would imagine the gaming industry would go the same way. It just seems to be logical at this time, but a lot of factors need to be solved before the same experience like you get on music and streaming videos happens on the gaming side.
RS: Before all the power goes to the people?
AM: Before all the power goes to the people, the experiences are delivered through the pipe…all of that…a lot needs to happen. It’s a good start, it’s an encouraging start but it remains to be seen how successful they are and what kind of experiences they give. But you know, looking at media, just like any other media, it seems like a logical extension of where things would land.
RS: Steam’s Big Picture wants to transfer the PC gaming experience to the TV, only they want it to be, as an interface, something that people in the living room would be better used to.
They can use Xbox 360 controllers to play, and devices to wirelessly transmit their PC display to the living room.
Does this appear as a very big threat to what Xbox Live is trying to achieve, especially since Steam is completely free?
AM: I don’t think the concept of taking a PC gaming experience on to the TV…I don’t think that’s the big picture here. There’s two parts to the gaming experience. One part is the game itself, and the quality that you get. The other part is about your identity as a gamer, and what you do in a game. Seeing people come on stage [Halo 4 launch] and talking about Halo…these are hardcore Halo fans. Their thrill in life isn’t winning mini-competitions such as what we’ve held here, as much as it is about bragging rights about how much they know about Halo. That’s the reality of gamers.
There are different ways to look at how you can give a user a complete experience of different games meant for different screens. Xbox Live has games that would work on an Xbox, would also work on a Windows Phone – there’s just a few but there are – there could be more for the future. There could be games which are just meant for PC but the experience could be delivered on Xbox. But that is not technology innovation. That’s the easiest thing to do, to kind of give a smaller experience or a smaller quality experience on a higher platform. The experience could be what could I do with your identity as such, and keep your identity consistent so that when you play a game on TV, on a PC, on a phone, your Achievements, your score, your bragging rights around a game, are consistent across your network.
I think we’re already there to a certain extent, we enable the platform across all three devices, and it’s a matter of getting the content. More so, it is about getting the blockbuster content of Xbox on to the smaller screen, which could provide the “wow” factor so to say. But the other way around, seems to be there in most of the cases, and I don’t think that’s a difficult thing to do.
RS: Let’s talk about the intellectual properties scenario: Sony seems to be introducing new IPs every year whereas in 2008 and 2012 the biggest games seem to be, for Xbox 360, Halo and Gears of War.
So, what do you look at as the benefit of new IPs vs. timed exclusives or even yearly sequels?
AM: I think at a fundamental level, new IP is good for the industry. It provides a refreshing change from the standard franchises running. But having said that, from an Xbox standpoint, given the past 2 years, the focus that the company brought in to Kinect, every title that we’ve brought in was a new IP – every single title had a new experience. So, there’s a lot of innovation in terms of new IP when it comes to Kinect. When it comes to hardcore Xbox games, the reason these franchises have done well is because they have kind of created a personality of their own.
But the experience that you get every time you pick up a game from a franchise, especially the Xbox games, is very different. Today, if you pick a Halo 4, you could say that this is another version of Halo. But the reality is with the kind of multiplayer experience that we’re giving, with the kind of co-op experience, the changes in the storyline that we’re bringing, it just adds to the aura of the franchise itself. What do we see in the future?
I personally see that in the last two to three years, it’s kind of been an era of just franchises, whether it’s our platform, some one else’s or third party games, it’s just been one version after the other that’s come. I expect that to carry on for another year or two years maybe, at max, but I do see an opportunity where new IP would be created, especially because multiple devices would come into play and that just gives an opportunity for some one to create an IP, which would work across multiple platforms, and which isn’t bound to a console, or a phone, or a PC alone, and that just provides scale for taking the risk to create a new IP. I think today the industry realizes that it’s kind of risk-free if you have a big franchise and come out with the next version.
There isn’t any urgent need to create an IP, because while I said the past 2-3 years has been just one sequel after another, the fact is, most of the blockbuster sequels have worked. Whether it’s Call of Duty, FIFA, Gears of War or Halo, for that matter, every sequel, the large ones, seem to work in the market. So there’s no real reason why anybody would say that “Hey, I shouldn’t be doing this” as opposed to creating a new IP.
RS: Speaking on the next era of game development, Take Two Interactive CEO Strauss Zelnick stated that he doesn’t see the next generation of development coming with increased development costs.
So if we were to see the next Halo coming to the next Xbox or something like that, then would we see a higher cost of development or lower, and how would that affect the overall quality of the experience?
AM: It’s a very subjective thing to define the cost of development. Now, just kind of speculating, the next Halo version…our intent could be to just take the storyline further, with the same functionalities and people would love that because the storyline, especially with titles like Halo, is very strong with the characters in it. We could choose to define the experience across different screens, a very different experience across different screens, or we could define the integration levels to be far bigger or higher with the next Halo game, or for that matter, the next Gears of War game. It depends on what I want to do with the game. If I just want to carry a franchise with the storyline, where the basic construct of the game remains the same, development costs could go lower because we already own the IP, the royalties don’t work that way, there is a set module of development for that particular game. But if I want to add innovation in terms of multiple devices or multiple UI, or multiple experiences, then the costs could go up. It depends on the franchise.
Halo is a big enough franchise – very profitable franchise – and to look at the next version and say, “Hey, what could we do different?”…there could be some franchises which are looking to just make good money and not risking too much of development cost to do too much with their franchise, because that’s what the consumers want. Fairly subjective in that sense, but I think both modules would exist…depends on which franchise you want to look at.
RS: Were there any prerequisite to making Halo 4 that “kind” of Halo experience or was there a mandate that something different has to be done this time?
AM: I’m again speculating here, than actually knowing about what went on with 343 Industries and the making of Halo 4, but from plain logic, the idea was we’ve had a Halo trilogy which has been out there. We’ve had different version of Halo after that – Reach, Anniversary, Halo Wars, etc. Now if were to invest in something like the next trilogy of Halo starting with Halo 4, we’d have to create an experience which is better than before, as simple as that. I think that would have been the fundamental point at which people would have started. And when we a “better experience than before”, the way it’s turned out now is that our online experience is better, even basic things like knowledge of the Halo franchise as such…I think it’s turned out better than before.
The entire Forward Unto Dawn series, that captures the entire story so to say, the way we’re building up Spartan Ops with the online experience and the co-op experience…it’s all very different, innovative stuff. And that would continue with any large franchise. You cannot have the same experience again and again, it just doesn’t make sense. This isn’t just Halo or Gears of War – you’d even see it in third party titles. FIFA 12 was different from 11, 13 was very different from 12 and there’s always things that would get added to the platform, otherwise you would lose the consumer.
RS: What are your thoughts on Nintendo’s Wii U console?
AM: I think…when we look at the Indian market specifically, Nintendo hasn’t really created a dent out here frankly because they don’t have operations in the country. So whatever comes into the market is essentially through parallel imports. But overall, we see that if you have to come with another version of the console as such, and this is applicable to pretty much all the platforms, something has to be radically different and game changing for you to make a dent in the market. It’s not a matter of bringing out smaller innovations which others either already offer or can bring in very easily. You have to do some thing radically different. When we did Kinect, it was radically different. The way we are positioning Xbox Live is radically different, it will take a lot for others to even copy that kind of scenario. When you look at India, it’s really us versus Sony. Wii’s attempt…it remains to be seen how the market takes it up. A lot will depend on the kind of content they bring into the market and the innovations they do around that content. I don’t think our concept or our fundamental philosophy is…calling another device coming into play as true innovation, as truly next generation.
RS: For some developers, like Vigil Games who developed Darksiders 2, they’re finding development on the Wii U…to translate their games to that platform is much simpler than say if they were to create an experience on the Xbox 360 and port it to the PS3.
What audience do you see them garnering in the long run, because right now we’re seeing a lot of big-name titles, but it’s still positioned in such a way that it’s something that the entire family can enjoy.
AM: Fundamentally, taking an industry view and not just an Xbox view, all the three platforms would try to create the right balance between family audiences and core gamers. It’s just a stage in the industry where we are, where it’s a very delicate balance, and it’s a more marketing problem than anything else. How do you position a brand which is just as hardcore as a core game and then position a brand which would be as neutral or soft as a broad, family game category. With Nintendo, they were completely, at least in the recent past, having been very focused on the family side.
They’ve been trying to win the market through the family side, but there wasn’t really much innovation to happen to create that experience, and I think we and Sony have really taken the lead there, to capture most of the market. Now whether they create that balance with the core audience remains to be seen but I don’t think it will be a matter of one or two titles. It’s kind of –
RS: Kind of been an uphill battle.
AM: It is.
RS: For both you and Sony, because the Wii just found this family audience that loved the console so much for whatever reason.
And from there, it’s been that you can’t just offer the same thing that they have. You have to do something different.
AM: Wii, at the time when they were unique from a motion gaming perspective, was a wonderful experience, there’s no doubt about it. But as a console, it is extremely important that you continue innovating. More importantly, that you continue innovating at a very fast pace. That’s when they saw the heat coming from Kinect, which is very new, which is far bigger than what they used to offer, and it’s probably a lesson for all of us in the industry, to understand that if just sit on a platform’s capability for too long, there would be others who would offer an experience or could offer an experience which will be very unique. And that could take a whole chunk of audience away from your platform.
From an Xbox perspective, I don’t think they’re doing anything that we’re not doing right now but I do see them not doing a lot of things that we’re doing. So it’s a fairly comfortable position for us to be sitting in.
RS: One thing that comes to mind, and this is something that Sony was pushing very hard with the Move, was 3D gaming.
And almost a year after touting it, almost no mention of it. So, what happened in terms of 3D gaming, or was the hype that time more than the actual momentum?
AM: I’ll give you a more India-specific answer for that. 3D Gaming has it’s dependencies on the TV. You need to have a 3D TV, etc. What we’ve seen in India is that while the technology is very well appreciated, there’s a lot of hype around it but the adoption of 3D in itself is not that much. It has a lot to do with the current experience you have, wearing the glasses, etc. I don’t think there’s anything as such that Sony did which was innovative in that space. We had Gears of War last year, around the same time, which was 3D.
A lot of games on our portfolio have in fact been 3D games. But the dependency is on some other device that needs to proliferate in the market, and people need to have that with them to experience a 3D game on the console. The console is capable of delivering it, even Xbox is for that matter, but it remains to be seen how 3D as a technology lands. I think it has to be made simpler…the experience has to be more smoother right now and maybe, in an Indian context, much cheaper, before 3D comes into homes at a scale at which everybody would want it to happen. When you’re playing a game in 3D, its fun, and a fairly good experience.
RS: Regarding the blockbuster development that we’ve been seeing in the past few years, we’re seeing these big releases but they’re essentially yearly sequels.
Like how many set pieces can cram in, the biggest names in composing, voice acting, what kind of scenarios we can create to just add on to the core experience, rather than trying something new.
This kind of “bubble” that’s being created for AAA game development in these yearly sequels – do you see it going bust soon or maybe evolve into something else entirely?
AM: I have a slightly different view to that. I don’t see that as a bubble at all. I think there’s a lot of value that the franchisees, the blockbuster franchises, have to offer, and they will probably continue to do so. The reality is that despite there being a Gears of War 3 last year, and despite the fact that there are multiple sequels of Forza and other titles, the biggest selling title in India was Kinect Sports. Which is a fairly new game to the Indian audience, and wasn’t a sequel to anything. Every single Kinect box we sold in the country, had Kinect Sports attached to it and given a gap of one to two months depending on the cycle of the second title which people were buying, the second title they bought was Dance Central. Much of this is also viewed in other emerging markets and even in more developed markets, but you see in a title like Kinect Sports or Dance Central, become blockbuster titles just because there was innovation in how you were interacting with the game itself.
I don’t think these are things that will change over time – you will get new IP and it’s difficult to see new IP reach the scale which the other blockbusters have reached, but at the same time, as long as the blockbusters have value to offer , as long as they have something different to offer, they will continue to do well. There’ve been instances of blockbusters – and we won’t name them – who in the name of the franchise have come out with multiple versions but have not done well, and that’s probably because there was nothing new to offer to the end consumer. For them it was just extended gameplay that they were getting, which in any case you get out of DLC.
That innovation is very important of the franchisees. Just as these franchisees have become big, they can lose customers very easily because the expectations are very high.