He knows what Kryptonics are, he wears a permanent smile, and he will only agree to an interview if the interviewer agrees to drink tequila. J Allard is head of all things Xbox on a global basis, and we caught up with him as he finished his speech at Microsoft's pre-E3 press briefing.
Question: J, (hiccup) can you tell us a little about Xbox Live, the online gaming service to be launched by Microsoft this Autumn, how it works as a revenue stream, and how you went about selling the concept to your third-party partners. It must have been a difficult one.
J Allard: Well, it was a little tricky. What we did was to take a step back and we identified that you need three things in your online stategy. You need a great gaming experience to draw in the gamers. Then you need to build a service. One number to call, one roof over the entire community, like one place for gamers to congregate. Then you need to create a sustainable business model and maintain it in the right way. We have put together a retail bundle. You go to the store and buy a headset communicator that will include a year's subscription. That way, retailers, publishers and developers all get to participate in Xbox Live. Look at Tony Hawk. It did really well at retail, but what if the publisher and developer then wanted to go and create additional levels? We can enable this to happen, and can provide a revenue stream for the publisher to charge for additional content, if they want to do it.
Question: But not all the publishers like this. Electronic Arts for example have kicked up a stink about the whole thing.
J Allard: I don't think so. Let's be clear about Electronic Arts for a minute. Electronic Arts has published more games on Xbox than any other publisher. They have published more games for the machine than even Microsoft, and have only announced one online title for PlayStation 2. When I announced 150 partners at the Xbox unveiling, EA was not on that list. I got a lot of questions about it then, and I'll probably get a lot of questions about it now. The bottom line is that if we can strike a balance between a great gaming experience, a great service and a great business model, it makes sense for the partners to be there. EA is in a unique position for a publisher. It has online experience, it has servers, it's own infrastructure, so it's a unique dialogue you have with them. Most publishers don't know anything about online. I mean, most publishers can't even publish their games in all three territories by themselves, they have to make affiliate label deals. How are they gonna know the tax rate in Munich to collect on a $9.95 subscription? They are not, so most publishers look to Microsoft to do the heavy lifting for them. EA is in a unique situation. They have run a service before, so the conversations we have are longer, but I'm confident they will be there.
Question: How much of the groundwork are you doing for the games makers? What we mean is, at what point do they stop making games and start parsing into Xbox live, or transversely, at what point do you step in and supply them with a load of tools and step into the development?
J Allard: They got everything in the new development kits that were delivered today so it’s all technically possible. Over this holiday season, more and more publishers have been releasing games that are fundamentally offline, but are ready to be online, so they are ready to start releasing new content for them.
Question: Will this be done in the form of a downloadable patch?
J Allard: Exactly! But in the case of DOA, the developer released the game at launch with the hooks for additional content already in there. They then released a new disc with a whole load of new things. So some publishers may take that approach. Many publishers, however, are looking for online to be the differentiator (sic) within their titles and create new gameplay experiences right, whether it's eleven on eleven football (well done J!) five on five basketball, or an underground racing league. I mean, I remember WipeOut for PlayStation. It had leagues, but they weren't real leagues.
Question: J, tell us how you are going to spend $2 billion
J Allard: (Laughs) A lot of work. We are going to make improvements to the Xbox as a platform, make it better for developers and better for publishers. Then we are going to move on to Xbox Live. Military-grade security and ensuring that the system is flawless from day one. You can't add it after the fact.
Question: Security and the possibility of Xbox virus attacks must be at the forefront of your thoughts at the moment as the Xbox is essentially a broadband-enabled PC with a hard drive.
J Allard: That is what is foremost in our minds at this minute, but a lot of the work we are doing is to ensure that future generations of gamers will enjoy Xbox. We are working on a lot of things that we are not yet talking about.
Question: J, (hiccup) can you tell us a little about Xbox Live, the online gaming service to be launched by Microsoft this Autumn, how it works as a revenue stream, and how you went about selling the concept to your third-party partners. It must have been a difficult one.
J Allard: Well, it was a little tricky. What we did was to take a step back and we identified that you need three things in your online stategy. You need a great gaming experience to draw in the gamers. Then you need to build a service. One number to call, one roof over the entire community, like one place for gamers to congregate. Then you need to create a sustainable business model and maintain it in the right way. We have put together a retail bundle. You go to the store and buy a headset communicator that will include a year's subscription. That way, retailers, publishers and developers all get to participate in Xbox Live. Look at Tony Hawk. It did really well at retail, but what if the publisher and developer then wanted to go and create additional levels? We can enable this to happen, and can provide a revenue stream for the publisher to charge for additional content, if they want to do it.
Question: But not all the publishers like this. Electronic Arts for example have kicked up a stink about the whole thing.
J Allard: I don't think so. Let's be clear about Electronic Arts for a minute. Electronic Arts has published more games on Xbox than any other publisher. They have published more games for the machine than even Microsoft, and have only announced one online title for PlayStation 2. When I announced 150 partners at the Xbox unveiling, EA was not on that list. I got a lot of questions about it then, and I'll probably get a lot of questions about it now. The bottom line is that if we can strike a balance between a great gaming experience, a great service and a great business model, it makes sense for the partners to be there. EA is in a unique position for a publisher. It has online experience, it has servers, it's own infrastructure, so it's a unique dialogue you have with them. Most publishers don't know anything about online. I mean, most publishers can't even publish their games in all three territories by themselves, they have to make affiliate label deals. How are they gonna know the tax rate in Munich to collect on a $9.95 subscription? They are not, so most publishers look to Microsoft to do the heavy lifting for them. EA is in a unique situation. They have run a service before, so the conversations we have are longer, but I'm confident they will be there.
Question: How much of the groundwork are you doing for the games makers? What we mean is, at what point do they stop making games and start parsing into Xbox live, or transversely, at what point do you step in and supply them with a load of tools and step into the development?
J Allard: They got everything in the new development kits that were delivered today so it’s all technically possible. Over this holiday season, more and more publishers have been releasing games that are fundamentally offline, but are ready to be online, so they are ready to start releasing new content for them.
Question: Will this be done in the form of a downloadable patch?
J Allard: Exactly! But in the case of DOA, the developer released the game at launch with the hooks for additional content already in there. They then released a new disc with a whole load of new things. So some publishers may take that approach. Many publishers, however, are looking for online to be the differentiator (sic) within their titles and create new gameplay experiences right, whether it's eleven on eleven football (well done J!) five on five basketball, or an underground racing league. I mean, I remember WipeOut for PlayStation. It had leagues, but they weren't real leagues.
Question: J, tell us how you are going to spend $2 billion
J Allard: (Laughs) A lot of work. We are going to make improvements to the Xbox as a platform, make it better for developers and better for publishers. Then we are going to move on to Xbox Live. Military-grade security and ensuring that the system is flawless from day one. You can't add it after the fact.
Question: Security and the possibility of Xbox virus attacks must be at the forefront of your thoughts at the moment as the Xbox is essentially a broadband-enabled PC with a hard drive.
J Allard: That is what is foremost in our minds at this minute, but a lot of the work we are doing is to ensure that future generations of gamers will enjoy Xbox. We are working on a lot of things that we are not yet talking about.
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