Focus: Microsoft's Robbie Bach at X05 (Part 1)

This is part one of our extensive two-part interview with Robbie Bach - be sure to check back tomorrow for the second part, where we go in-depth about a host of subjects ranging from Bach's growth targets for Xbox Live to the firm's business model for the console.

Robbie Bach: Certainly from a strategy level, our goal is to treat all our markets, where we produce a title that makes sense in that market - sometimes titles just don't make sense in certain markets - but assuming that we're going to produce a title for North America and Europe, our goal is to produce those titles so that they ship as close to exactly the same time as possible.

Occasionally, we'll execute badly. That does happen every once in a while. Some of the titles require a lot of language localisation and sometimes that's a little tricky, but that's certainly our goal. It's our view that when we ship, say, Project Gotham Racing 3 in North America, we want that to be available in Europe at the same time.

It probably won't end up being the exact same day - it turns out that retailers in the different countries work differently, so the ideal day to ship in the US isn't the same as the ideal day in Europe, but for all intents and purposes we want this to be as close as possible, and we're working with our publishing partners to encourage them to do the same. We're trying to provide tools and certification so that that isn't the cause of the delay, we're trying to do all the things that we can in the ecosystem to make it easy for people to do that.

It is something that takes a little bit of work, and so, will we execute perfectly on it right out of the gate? Probably not. Will we see, over the life cycle, people saying "wow, things have changed, they're really treating Europe like a main market" - like the main market that it is? I think absolutely, they definitely will.

I think the reality, when you launch new products like this - any time you have a product that has as much pent-up demand as something like Xbox 360, you're going to have challenges about making sure you supply demand.

We're working very hard to ensure that we supply product to all the territories. We do think that it's more important to enter the market, particularly at the holiday season, in all the territories - and if that means we're going to have a little bit of challenge in making sure that we continue to supply product, we'll manage that.

One thing I'd like to point out is that there is an important process difference between us and how Sony and Nintendo do this, and I think you saw this with the PSP launch. When Sony and Nintendo traditionally launch, they pick a certain number of units - X thousands of units - and then they put it in the marketplace, and then they don't ship anything for six weeks. The retailers don't know when the next shipment is even coming!

Our process is actually quite different - when we're talking with retailers, what we will say is, "this is your day one quantity, this is how many units you're going to get week one, how many units you're going to get week two, how many units you're going to get week three, week four..." It goes on and on. Our process is to continually supply the channel.

What that does for the retailers is it gives them predictability. They can continue to advertise because they know they have new product coming up. It gives consumers some predictability because they can keep coming back to the store, and it gives people who do pre-sales some predictability because even if they don't have enough product for day one, they can say, "hey, I can take a reservation for day 27", and the person can know they're going to get the product at that point.

So we are trying to work through changing the way that the industry thinks about this. The historical philosophy is sort of to launch and leave the marketplace; we just think that's a bad approach.

Sure, it means you have a great day one sales figure, but down the line, nobody's going to remember that anyway. The things people are going to remember about Xbox 360 are, "wow, they had a great launch line-up, they got off to a great start and they put a ton of pressure on Sony and Nintendo early on in the cycle, and that helped them to be successful."

That's the type of stuff people are going to recall and which actually will make a difference - and frankly, going back to the question about the simultaneous European launch, that's part of the process. We want to get off to a great start in every marketplace, and we want to get out of the blocks early enough.

The easy answer is "as much as I can", and I don't mean that to be snotty - the reason it's hard to be specific is that Sony has been incredibly vague about what they're doing thus far. They've said that they're going to launch in the spring someplace... That makes it a little hard for me to say, "hey, this is the kind of lead we want to build!"

Instead, really what I say is, whenever they launch, I'm ready. They should just tell me which market, what date, and I'm happy to be there - and we'll already be in that market, it turns out. So we're going to try to build volume as fast as we can...

We haven't been specific about volume numbers yet. We probably at some point as part of our financial disclosure process will make some forecasts on the future, but for right now, we're really just focused on spending as much time as we can showing as much game opportunity as we can. We think that's the place to come from.

Again, does anybody remember how many units we had day one in the last generation? No. I had to send somebody off to find out! It's just not the most important issue.

The game thing is a great question. Right now we think that our launch portfolio is looking like it's about 15 titles, plus or minus a few. We aren't being really specific yet - we probably will be in about two or three weeks, and in the next 48 hours or so we're probably going to post a list and say "these are the candidates for launch" - but the games still have to go through certification, so I don't want to promise a list of titles today when the games haven't been certified yet.

So it's a little tricky to be precise, but we've already heard that Electronic Arts thinks they're going to have five titles, Activision thinks they're going to have four titles, we think we're going to have three titles... So you add up the number, and you start to get to the point where 15 starts to feel like what's going to happen. The specifics will shake out as titles go through certification - that's a sort of natural process.

Then, as I've said before, we have over 200 titles in development, most of which will ship over the course of 2006 - some of those will ship in 2007.

Well, it depends on when they ship. Everything we ship right now is next-generation exclusive, and so part of that depends on when they're going to ship. Certainly, all the first party stuff which you've seen - Mass Effect, Too Human, Gears of War, and obviously the three launch titles, Kameo, Perfect Dark Zero and PGR3, the things we're doing in Japan... Those are all going to be exclusive.

We've also announced some titles where we're very specifically exclusive - Call of Duty is very specifically exclusive, DOA is exclusive to us, Oblivion is exclusive. Saints Row is exclusive, Condemned is exclusive, Full Auto is exclusive... There's a pretty rich set of titles, at least to the window we can see out to in the future. We'll see as we move forward into the latter half of 2006.

No, basically - for a variety of different reasons. The first is that I think the reality will be that a game on Xbox 360 and a game on PS3, that's cross-platform, the power that they're going to get from the PS3 and the power that they're going to get from the Xbox 360 are going to be about the same. Right? You know, we've done the math. We have silicon engineers too. We've done the math on their specs and our specs and we think they're about the same. So that's one thing.

More fundamentally, a really cool trend for us is that people are doing their next-generation content on Xbox 360. Now, they may end up porting some of that to PS3, but Xbox 360 is becoming the reference platform for them to work with, because we have development kits. We have real tools that they can actually do real work on. So what that's going to mean is that the games end up being optimised for the platform they're created for. That's going to lead to some great content.

The third thing I'd point out is, Sony doesn't have the equivalent of Xbox Live, so cross-platform games don't support Xbox Live. There may end up being some online thing from Sony, but Sony doesn't have the service, they don't have the single user identification, they don't have all the things we've shown on Xbox Live. So if you want to play online, which title are you going to buy?

I think it's all of those factors, which have actually helped us this generation, as well as next-gen. I think we're going to do great with cross-platform product.