Peter Moore - Part One

Yeah, and we think we're at 65 per cent adoption rate online. It's lagging a little bit because the Wii doesn't have a compulsive online experience yet, but I think they're going to get there. I think ultimately it's the same with the computer - who do you know that owns a computer that doesn't go online? I don't think in the world of consoles that we're going to be too far from looking at that in the future.

When I was president of Sega nine years ago there was a phrase I coined with online through dial-up modem - "Taking gamers where gaming is going" - and people laughed, because nobody connected. Maybe tens of thousands of people. But I said then, there'll come a time when if you ship an offline game, it's going to feel very weird. I don't think there are many offline games now - in other words a game that doesn't have some kind of offline element to it.

Yeah, I mean when I was at Microsoft we shipped Xbox Live cards, which you'll find in all retailers, which allows them to play in that subscription-based market - particularly for a lot of consumers that don't have credit cards. I'm assuming those are still very good sellers.

Go look at the music model, look at the number of iTunes cards sold at retail -

That's exactly right, and that's why there's good margin on that stuff. There's no stealing them because they're not live inventory, and as you say there's no footprint to them. They're almost at the cash register, right there.

My point was that retailers will find a way of playing in that - whether it's making margin on cards for online distribution, which is what Asian retailers do very, very well, or figuring out their own services, I don't know.

Well, we can look at the music industry and take our cues from that. I think retail has done well - I watch with interest what retailers in the US do with music. The music industry now is about touring and merchandise, and what have you. They get a little piece of the music itself, but the music becomes an entrance to other business models. When was the last time you buy a CD?

Look at retailers now who sell DVDs, exclusive DVDs that are of concerts, and you see retailers that are promoting concert tours. And you still see them doing iTunes cards, or Zune cards as it was when I was a Microsoft guy. I think they find ways of playing.

All of a sudden music came to life again through a very strange way - through videogames, in Guitar Hero and Rock Band. They brought music back to life again for retailers, and they're selling music when they're selling Guitar Hero and Rock Band software.

It's their prerogative, and the same with the retailers in the United States. It's their prerogative to do that. What we have to do as publishers is find ways of taking advantage of that. How do we monetise that second-sale consumer? I think online is the key to that, and finding ways of innovating with that consumer, because they still log-on, and we get access to them, so how do we sell them stuff?

You like to think you make compulsive game experiences and people won't want to trade them in, but that's their perfect right. Again, our point as publisher would be that the business exists, it's a multi-billion dollar business - our job would be to figure out how we treat them as any other customer, how we monetise that consumer.