Q: Sony would argue that the PS3, because of its power, would have a longer life-cycle than any previous console. Would you agree with that?
NT: Not really. Sony is not a software company, and I don?t think it is able in terms of operating systems, and I don?t think it has the elegance in its software design that we do, hence they need to put a lot more processing in their box just to get to the point that we?re at. The analogy I use for that is that last year, I looked at their product and thought, ?Well, this is a truck engine in a Ferrari,? because they were doing a lot of sexy stuff on the box. What has become apparent is that they are now offering a truck engine in a truck ? the size of it is 40 per cent bigger than they said it was going to be, and it?s heavier than the original Xbox.
The thing that we learned with the first generation of Xbox is that when you put all of this extra technology in the box on day one, consumers don?t necessarily value all of that on day one. That?s why we built the Xbox 360 in a way in which we can scale up to any new technology that consumers want. The thing that is fundamentally going to change this business isn?t going to be the hardware, it?s going to be what the software does for them. It takes quite a few iterations of games to get to the true power that these systems have. By the time we get to that point, we?ll have a scaleable business where we?re offering people whatever choices they want in whatever ways they want.
Q: What about the PS3 online service? They?re still saying that they will leave pricing up to publishers and developers, so the unified experience consumers get over Xbox Live couldn?t be applied to PS3.
NT: Absolutely. There are two powerful currencies which will become interesting in the future, particularly with Bill Gates? announcement. One is your gamertag. If you?re going to be gaming anywhere on any device, you want the same gamertag. Because then your friends will know who you are and where you are. Also, it?s the same with achievements ? you want your achievements to keep going, because we?ve all got egos. With Sony?s online model, neither of those things can really happen. Coupled with the fact that at the end of the line are publishers building massive infrastructures to service this - we know through MSN and Xbox Live what that takes, and it?s no insignificant challenge. We just don?t think it?s really a scaleable solution if you don?t have this unified environment.
Q: On the back of what Bill Gates announced, is cross-platform PC-Xbox 360 gaming going to be a big Microsoft thrust in the future?
NT: Well, the big Microsoft thrust is being able to connect all your devices ? you can choose which device manufacturer you want to buy from, be it music, entertainment and so on. The joy of being a software company is that we can make the software to join all of that up. In the Sony world, you have to live and die in the Sony world. You have to have Sony everything. That?s not always going to be the best choice for people, simple as that. The iPod is creaming them in the music business at the moment, and I think that?s a classic example of where, if you lock yourself into one hardware company, you?re limiting your decisions. It?s all about the integration of technology, and that integration only comes about through software.
Q: Looking to next year, what are the key Xbox 360 games you have? Obviously the GTA IV announcement was very important for Microsoft.
NT: The strategy is pretty simple. We?ve said we?re going to sell 10 million Xbox 360s by the time our competitors launch. What that gets you is, all of a sudden, every publisher who produces a game has to consider putting that game on Xbox 360. And in a way, it becomes a de facto standard. And it becomes very expensive for our competitors to get an exclusive unless it?s first-party, because it?s an expensive business to be in when you?re giving up a lot of IP. What you?ll see from us going forward is that all of the main franchises, starting with GTA, will start coming to Xbox 360 and, maybe, the advantages that Sony had in the previous generation with franchises will go away.
Then you build on top of that the extra elements that we have with Xbox Live. We announced that with Grand Theft Auto IV, we?ll be offering unique extensions through Xbox Live, which no other platform will offer. On top of that, you?ve got the first-party stuff, with the likes of Halo 3, and we?ve invested in people like Rare and Lionhead. We have a very voracious appetite for driving a more diverse games set. And then when you add on what we can do with Xbox Live Arcade, it all becomes very compelling. Yes, we have key franchises with Halo 3 and so on, but they won?t stand out as much as they did in the past because there will be so many other genres that we?ll be covering. The franchises that we don?t have will be very few and far between.
Q: Japan remains a bugbear for Microsoft ? at the moment you have a negligible market share there.
NT: The thing we have to do in Japan is be very, very, very persistent. The Japanese market has been a tough one for us to crack and will continue to be tough, and the only way we can solve that is fundamentally through content. What we?ve announced recently ? Ninety-Nine Nights, Blue Dragon and so on ? those titles should help us gain more of a foothold there. I think the Sony announcements, to be honest, will also help us ? I think people will start to question why they would wait for PS3. But we just have to keep ramming home what we have to offer in Japan. I think people now love the style of our box and the aesthetics of what we?re offering ? it?s now about the content. One thing we are at Microsoft is persistent. We hate losing, we hate not succeeding and we will be very, very persistent in Japan.