Moving On

Last week, we published part one of our interview with Xbox Europe boss Neil Thompson. In part two, he discusses Microsoft's commitment to the original Xbox, future plans for Xbox 360 and why he's not worried about the Wii.

Neil Thompson: I wouldn't agree with the idea that we don't support the original Xbox. There's still hundreds of titles on the original Xbox and publishers are still releasing content for it. But stopping the sales of it was obviously a clear decision in order for us to move to high definition gaming.

We felt that high definition could and should happen at the point when we released the 360. We didn't think that people should have to wait to get that. We obviously didn't see why people should wait for a change in DVD formats to drive gaming experiences.

We were very centred in giving people the next level of online and offline gaming experiences in high-definition and we felt we could deliver a superb experience with the 360. We didn't think we could get to that level on the original Xbox and therefore felt that making the change at that point in time was the most appropriate thing to do.

Okay, so you've done five years of Xbox - what would you like to achieve with five years of Xbox 360?

We obviously have much more ambitious targets in terms of the volume of people using the machine over the original Xbox. We're ambitious to be market leaders in this space and with the product that we have and the way in which the product can evolve over time. There's no reason why we can't hit that aspiration. We're on a trajectory which is very positive.

The future is unknown and we still have to work very hard for every sale on every day because our competitor brands are very strong, and we recognise that. But we think with a compelling game offering and the service offering of Xbox Live, it's just becoming a more and more compelling platform for consumers that want digital entertainment. We think we can set the benchmark of what you need to achieve in this market over the next five years. Time will tell.

Do you see the 360 having a much longer lifespan than the original Xbox?

I imagine it would, yes. The way that the technology was built, the way we can update the system and services more effectively through online etcetera, I would think it would have a much longer lifecycle.

Looking directly at this Christmas then, are you confident you've got enough supplies this season to meet demand at retail?

Yes. Demand will be very strong and we are now seeing it ramp up week on week. We've still yet to see anything nearing the peak of the Christmas selling season at retail, and we'll have to see what the latest interest rate hike does to consumer confidence in terms of retail spending this month. But we're feeling pretty confident that those people that want to buy an Xbox 360 will be able to get one this Christmas.

When Sony announced the delay of the PS3 in Europe, you guys must have popped the champagne corks, right?

Well yes and no. To be honest we were very sceptical that it would launch in Europe this Christmas anyway. In some ways it would have been good if it had, because then people could have really made the comparison. Sometimes it's worse when you're fighting a myth than when you're fighting reality.

In a lot of ways we'd like people to put the system side-by-side and see whether people want a platform where they're paying for Blu-ray. Is Blu-ray that important to you that you want to buy into that platform right now and spend whatever it's going to cost doing that? Or do you want a gaming system that has more high-definition gaming content today, has a better online service and provides you the choice of whether you want to upgrade to the next-generation of DVD platform in the future whenever you personally want to?

We would have quite liked to have gone head-to-head on those issues because we feel very strongly that we have an incredibly compelling offering. But obviously having another Christmas arguably to ourselves is great. There is the Wii but it probably won't hurt us in terms of volume sales.

When Sony is ramping up its marketing campaign for the PS3 in March, how do you plan to steal some of that thunder?

This is going to sound a bit odd but we don't really plan much around competitor's launches. We're more inclined to look at what peaks we see happening in the market at certain times of the year, the seasonality of the market, and we plan around those.

When a competitor does or doesn't launch, there's not a lot we can really do about it because those people that are going to buy a PS3 in the first month and a half are those that are going to buy it no matter what. They're the hardcore, brand loyal and focused individuals - the same type of consumer who was early to pick up the 360.

How about the Wii - what's your take on that - do you see it as a direct competitor this Christmas?

I put it in the same category as mobile phones and MP3 players. It has the potential of taking consumers spend and wallet share away from us in general, but at a product comparison level it's not competing with us at all. It's an innovative, low-definition product.

People will make a clear decision probably as to whether they want that sort of product - a kids toy - or they want high-definition gaming and entertainment and all that it brings.

Someone that's considering buying an Xbox 360 to play the latest high-definition football game, Gears of War or Viva Piñata, and have an online experience that extends that, is not the person considering a Wii, in my mind. They are only a competitor in so much as they'll take consumers' pounds, and I'd like to have as many of those as I can.