Phil Spencer welcomes the word to E3 2014

GameCentral talks to the global head of Xbox, about competing with Sony and Nintendo, the Xbox One launch, and promoting indie gaming.

We like Phil Spencer. Considering he’s the big boss of Xbox and Microsoft Studios that almost seems like an admission of bias, but having had the chance to talk to him at length, at last week’s E3 expo, what impressed us most is his clear love of games. A seemingly rare quality amongst many top execs and yet it was obvious from the things he spoke about, and the rivals he eulogised, that he wasn’t just play acting.



And that enthusiasm seems like the best thing possible to help Microsoft out of its disastrous first few months with the Xbox One. Since taking over in March we can find little fault with any of his big decisions, especially the recent announcement of a Kinect-less Xbox One and a resulting power boost for the next gen console.

As quick fixes go it’s definitely a good one, but that doesn’t mean that it’ll all be plain sailing from here on in. The Xbox One is still in last place in this generation and Microsoft has everything to prove this Christmas and beyond. So while Spencer can’t be blamed for the problems of the Xbox One’s launch and pre-release U-turns he is entirely responsible for everything that happens next…


CLICK HER FOR OUR INTERVIEW WITH SONY EUROPE BOSS JIM RYAN

PS: So were you there at our show yesterday?

GC: I was.

PS: And?

GC: Yeah, it was all right.

PS: [laughs]

GC: Truthfully, I did think it was good; but how do you feel it went?

PS: I was happy with it. We went in with a message around a great games line-up coming in 2014. We opened the show with the first hour of content that’s all available on Xbox One before the end of this year. And then we went into our longer term, because people like to see new announces, and we kind of gave people sight lines into franchises that will come in the future. And I thought all of the teams did a nice job putting the content on screen, on stage, and the message landed pretty well.

GC: Yeah, yeah I thought so. But it must be difficult because you always go first and I’m willing to bet Sony has a plan A and a plan B ready to go in the afternoon, depending on what you say earlier in the day. How much do you worry about what your rivals will do and say?

PS: Well, we’re on broadcast television, here in the US, which means that we are going to land in our 90 minutes. So there is some inflexibility…

GC: I didn’t know that. That must be why the Sony event always goes on forever; so they’re not on broadcast television here?



PS: No, no. So, for us, we think that the reach that we get from being on live TV – we’re also available on the web, we’re also available Xbox – but that live TV component for people at home I think is important; and, so we’re a 90 minute show and we do have more content than we have time.

The question about opening E3, I always enjoy welcoming people to E3; trying to set the tone about what E3 is about. Clearly there’s some strategic advantage to being second or third, being able to react to what other people say and do; but we’ve always been first and I don’t really look at this show as a kind of pure us versus them. I know a lot of people do, like who ‘won’ E3 and… whoever won E3 will play out through the holiday when we see how many games and consoles sell.

GC: That was actually may favourite bit of the show, when you took a moment to acknowledge and praise Sony and Nintendo as rivals. If there’s one thing I can’t bear it’s execs bad mouthing the competition. Even the most partisan gamer realises that console manufacturers need strong rivals to push them into doing better.

PS: That’s right, that’s right. And I watched Nintendo’s briefing this morning and I thought their tone and their style, and their kind of humour with themselves, I though was great and I thought really well done. I have a lot of respect for Reggie, and I just thought it was a really nice show.


And you think historically, Nintendo has played an incredibly important role in gaming, and they still do to today, of having franchises that really appeal to everybody. I mean, I don’t mind saying they’ve got the strongest first party line-up out there, when you look at the franchises that they have, and I think they play an important role.

It is competitive, I want to win. I want to sell as many Xbox Ones as I possibly can. I know some people will buy all three consoles and some people will choose one console. And we’re going to win some customers this generation and we’re going to lose some customers this generation.

It really comes down to the game content, people buy a console in order to play games and that’s why I want to take our 90 minutes and really focus, not on me, not on our competition, not on the executives, but on the content people get to play this year on our console. Because I think that’s why people buy the consoles, to play.

GC: Definitely. And one thing that this generation has taught Microsoft, if it didn’t already know, is that there is no such thing as brand loyalty. Gamers will act loyal, they’ll say the most ridiculous things online, but only right up until the point where they think they’ll have a slightly better time elsewhere. And quite sensibly so.

PS: That’s right. I think, like a lot of things, you have a core-core, the people that will get the Xbox tattoos and other things… so, I’ve been on Xbox since the original console and one of the things I think that’s easy for us to lose sight of is how long we’ve been in the market now. We’re still the neophytes relative to Nintendo, clearly, and Sony’s been in the market longer than we have, but we have some franchises that people grew up with. And we have a console that people now remember from their youth, and now they’re adults…


GC: I’ve just come from seeing the Halo: The Master Chief Collection and the terror of how long ago that originally was…

PS: [laughs] Exactly! But then you say, okay it’s an interesting opportunity in Halo. You say, ‘Okay, I’m gonna bring all four games, the first time you’re going to be able to play them all on the same console’. And even something as trivial as the decision to ship them with all the levels unlocked, so you don’t have to play through it all again to get to your favourite bit… because someone like you and I are kind of like, ‘I don’t really need to go back and play all four of those games linearly again, but I love the idea of having them all available on one console’.

GC: One of my favourite rants is always about how awful video game collections are, where they always leave out the entries that would require too much effort to upgrade – even though they’re often the most important or interesting.

PS: Yeah, exactly! And I think 343 is taking a nice approach with the Master Chief Collection that is… fan service is kind of not the right term but it’s something that I think the fans will enjoy.

GC: There’s a theory I suggested to a Sony exec once, I don’t think you’d know him as he’s only Europe, about the arrogance sine wave of console manufacturers. Where you’re all caught in this endless pattern of starting out at the bottom, trying to do your best to appeal to core gamers, then as you get more and more successful you begin to feel you need the core less and less. And then you peak, and you start to reject them and you try and pursue other demographics, but that never works and so you carry on back down the curve until you have to climb back up by courting the core once again. I’d suggest Nintendo is just starting back up at the moment, Sony I think is probably about midway, but – if you accept my premise – where would you say Microsoft is?

PS: Well, so my background in Xbox is head of first party studios and then two months ago I was made head of Xbox all-up. So I come from the game… the content development background and when I think about how games are developed, games are developed with a keen insight in the kind of feedback loop with how people are gonna play. Usually we’ve been bringing gamers in to play the games before they’re finished. We have alphas, we have betas, this is kind of the rhythm that we’re in, in terms of building games. And for me in my new role as head of Xbox, I’m gonna run Xbox the same way.

I’m gonna run Xbox connected to who our customers are and I want them to have a voice in how this product evolves. We also have a rhythm now of doing monthly updates to the box, so every month we’re adding features, fixing things, listening to customers and making changes. The style on how we show up… I am who I am and I’m not claiming to be the most charismatic executive or… I dunno, I’m a product development games guy. That’s what I do. So when I stand on stage I’m probably gonna show up that way, both the positive and the negative of that.

For the platform and Xbox all-up I wanna make sure the team understands who our core customers are, and that’s someone who wants to play games on their television. And I want to make sure our box resonates with that customers base. I think we have to listen to them, we have to build a product for them, we have to listen to the feedback – if they tell me I’m an idiot because I didn’t do X, Y, or Z you’ve got to take that just as much as, ‘Hey, you had a great E3 press briefing’. You can’t just listen to one side of it. And I want that to be a core principle of how the programme’s run in a world of success or a world of struggle, either one. It’s core to me.

But you should hold me true to that, right? If we have success and we’re sitting there and you come back and say, ‘Hey, it sounds like the vibe of the programme’s different’ I want to hear that from people.

GC: I don’t think a lack of complaining has been a problem in the past.

PS: [laughs]

GC: But I think of Nintendo when they got obsessed with their blue sky casual audience, or when Sony thought they owned the living room and became obsessed with everything but games. You’re a games company, making games should be your number one priority! Nobody ever went out to buy a games console to watch TV on. They may well do so when they get it home, in the end maybe even more so than they play games on it, but that’s never the initial reason.

PS: You’re exactly right. And that’s why when I’m talking to the team what I say is, ‘I do think the TV functionality in Xbox One is incredibly important to our long term success, I believe that. But you only get permission to use that functionality if you get the person to buy the console to go play Titanfall or Halo or Forza or GTA or whatever’. And its primary purchase intent is, ‘I want to play games on that television right there, and which console should I buy? Once I buy a console do I want to be able to use Skype and browse the Web and everything? Absolutely I do.’

GC: Of course, nobody’s going to say they don’t want those things.

PS: That’s right, and I want those experiences to be world class. But the reason someone brings this device into their home is to play games.

GC: But another thing I worry about, and this is a general point really – you did well yesterday so I’ve nothing much to complain about specifically with Xbox…

PS: [laughs]

GC: But I am still very concerned about the health of the traditional home console market, and again this is a point I’ve made to Sony before. I think it was at the unveiling of the PlayStation 4 and I pointed out that the 3DS, the PS Vita, and the Wii U had all had weak launches.

PS: Right, right.

GC: They’d all made the same mistakes and they’d all managed to look less than essential at a time when mobile and free-to-play gaming was making huge inroads on the traditional market. And I worried at the time that a weak launch from the Xbox One and PlayStation 4 would be even more damaging, because you need to prove that console games are better – or at least different.

PS: Yep.

GC: You need to prove that they’re necessary, and I worry that here we are and both new consoles are probably not going to have a truly great line-up of games until well into next year.

PS: I think people playing phones and other devices is actually positive for us, because it actually gets people into the… they will start to look at gaming as a form of entertainment, like listening to music or watching TV. But I agree with you on differentiation. For us and Sony we both had the most successful launches we’ve ever had for hardware, and for software attach rates.

GC: But certainly not for reviews. Not for groundbreaking games or games that could only exist on the new consoles.

PS: Well, no… but in terms of what people are buying. And I think in terms of reviewing, maybe they’re giving themselves some headroom for later in the generation. I get all that, but game sales and consoles sales have been strong. But your point about why couldn’t we have had all the games that are coming out this fall on Xbox One, why couldn’t we have had those at launch – there’s a little bit of a chicken and egg…

GC: A reader wrote in with something recently that summed it up perfectly, I thought. They said that all the console manufacturers seem to have been surprised by the release of their own consoles.

PS: [laughs]

GC: But what’s worse is it was a really long generation last time too, so there was all this time to prepare and what did we get for launch on both consoles? A bizarre parade of the world’s least requested sequels.

PS: [sustained laughter] That’s one point of view.

GC: Nobody has ever written in to me to ask for more Dead Rising or more Killzone or more inFamous. Where are these ideas coming from?!

PS: [laughs] The console generation does have to start. And it will start with a hardware specification that is new to the development community, and they are going to learn their craft over the generation. If we go back to the 360, and I’ve been around since the original Xbox, you know… I launched the original 360 with Perfect Dark, developed up in the Midlands with Rare. Perfect Dark Zero. Fun game, not the most beautiful game.

Same console, eight years later Halo 4 comes out – beautiful game. Same hardware, but like what happened? Why couldn’t they have just built the same game in the beginning, and there is time in the saddle that developers get with the platform and they will naturally get better at their craft over time.

GC: That’s obviously true, but the original Xbox launched with Halo. That means Microsoft are the only one other than Nintendo to launch a new console with a true killer app, a genuine all-time classic. So you know how advantageous that is, you know it can be done…

PS: And we had Gears Of War early in the 360’s life as well.

GC: Exactly, so where is the equivalent for the Xbox One? And don’t say Titanfall because that’s not first party, that wasn’t down to you.

PS: I think Sunset Overdrive’s gonna do that this holiday. That’s not launch I’ll grant you but it’s still less than a year in.

GC: The other thing I worry about is the lack of new IP, and I know it’s a perennial problem. But yesterday, in terms of new announcements, you had Scalebound and Sony had Bloodborne, and that was it for brand new IP.

PS: We had Ori [And The Blind Forest].

GC: Well, in terms of big budget retail product. I know I’m adding qualifications here, but I think the point is important.

PS: No, no, that’s fine. I’m not arguing with you.

GC: I just worry that’s not enough for sustained growth and to ensure interesting, exciting games. And perhaps most importantly games that are specifically designed with the next gen in mind. Because you’ve also got a number of last gen-only sequels still being made, like Borderlands: The Pre-Sequel, and even you’re still making cross-generation games with Forza Horizon 2. I don’t understand that at all. Shouldn’t you be doing everything possible to encourage people to buy an Xbox One?

PS: But we have millions and millions of people on 360. If you bought your Xbox 360 a year and a half ago, I think we have an obligation there. We’re going to sell millions more Xbox 360s before this generation is done and when people make a £100+ commitment to us, they’re gonna come in and buy an Xbox 360, I want to make sure that there’s content for them. It’s an investment in the new generation of consoles, not every game is going to go to 360 but I want to make sure the 360 has a healthy line-up of software from us and from third parties. And I think that’s important… not everyone bought an Xbox One at launch.

GC: Under normal circumstances I’d say fine, but there are so few next gen-only games due this year, and so many multiformat games are being held back by being cross-generational. And in the games industry, especially amongst third party publishers, they always seem to have the feeling that someone else will sort out the problems, that it’s not their concern. And well, if that’s the case then it’s down to you, the console manufacturer, to encourage them and to lead by example.

PS: Most of the third parties will support both generations for a couple of years, right? For a third party this is the nice part of the curve for the last generation, because you’ve got millions of people out there and they want to sell content that these people will buy. They also want to kickstart the new generation successfully, so you’ll see a lot of them doing a little bit of both. For us in first party, our primary focus is Xbox One. You saw that on stage, we tried to show a breadth of content that you could buy in 2014.

GC: OK. But the other thing, and I was complaining to Microsoft execs about this before there was ‘the trouble’.

PS: [sustained laughter]

PR guy: I think we’ll call it that now.

PS: [laughs] We’ve renamed that creative time.

All: [laughs]

GC: What I was complaining about was Microsoft’s decreasing interest in first party titles, both published and particularly in terms of in-house studios. I never understood that because you were getting really good it, with some good teams. Are you looking to ramp that up under your watch? Because again that’s where you can lead by example. Because if you put out this amazing game…

PS: Like Sunset Overdrive.

GC: Like Sunset Overdrive, then the third parties know they have to put out something of equivalent quality to compete.

PS: That’s right. I’ve been proud of our first party line-up on Xbox One. We might differ on opinion on some of the games, but I think about Forza Motorsport 5 at launch – I think it was a beautiful game, 1080p and 60 frames per second. Ryse didn’t have the best review scores, but actually has sold really well and the feedback from people has been positive…

GC: [dubious look]

PS: [hesitates]

GC: [dubious look intensifies] I didn’t say anything!

PS: [laughs] Now coming into the second holiday we’ve got Forza Horzion 2, we’ve got Sunset Overdrive, we’ve got Halo Collection, we’ve got Ori…

GC: I’m not making any criticism of your current games, I’m worrying that you don’t have enough first party studios to make it easy for you to keep pumping out games on a regular basis. Is that not something you feel you need to increase, I mean you have less than both Nintendo and Sony?

PS: You’d always like to have more hits, but when I think about the investments we’re making in content, the diversity of the content, the ship cycles that the teams are on, them hitting 2014 in such a strong way. I mean if you look at the 2014 line-up that is only available on Xbox One, and then you’ve got third parties like GTA and Destiny and Assassin’s and Call Of Duty as well… I feel really great about what gamers will get to play on their Xbox One.

GC: Okay, one curious thing I noticed yesterday. And maybe someone said it and I didn’t hear, but I’m pretty sure the word ‘Kinect’ was not uttered one single time on stage.

PS: No, because we had Dance Central and Fantasia and they’re both Kinect only.

GC: But I’d swear they never actually said the word Kinect. And at the Ubisoft event too, they had a Kinect-only game and I’m certain they never said the word there either. Have you threatened people with the boogieman if anyone utters the word in public?

PS: [laughs] No, no! I didn’t say that! Kinect is critical to our long term success. It is a differentiator for our platform.

GC: This a general point, so not a dig at Kinect specifically, but do you think the whole motion control thing is just a bubble that’s burst?

PS: We’ve had over a billion voice commands used since we’ve launched, we’ve got games that are using gestures in interesting ways… I think the idea that every game is going to turn into a purple-boxed game that’s a Kinect exclusive game was maybe [laughs] not the future. And I don’t think the future that we really want.

We’ve got games that I think use Kinect in a natural way or they choose not to. It’s more about supporting the creative and the game to deliver the right experience, rather than trying to exploit a certain part of the platform for kind of a PR purpose.

GC: Can you still see yourself, in a year or so from now, releasing big budget Kinect-only titles like Kinect Sports Rivals?

PS: Yep, yeah. On the floor now we’ve got FRU, which is a Kinect game. Obviously we had Dance Central, Fantasia, you’ve got #IDARB which is another cool little Kinect game. Big or small; again I don’t define games, the important games, as the big games so much. I just don’t think about it that way.

Phil Spencer – the new king of Xbox

GC: Oh god no, and I don’t want to give the impression I do. But where I’ve talked about big budget, retail-only titles, that’s to give me an insight into what you at Microsoft are prioritising and what you’re investing in, and to what level.

PS: Oh, okay. Sure. But I’ll take Sony’s briefing, which is kind of getting into the danger zone of me talking about someone else’s briefing, but I loved No Man’s Sky.

GC: Don’t get me started on that, it looks amazing.

PS: Sean [Murray of developer Hello Games] coming out and doing that was, I thought, a great, great opportunity on their stage. I happen to know Sean… so, does it have the same budget as Call Of Duty? No. Is the team size the same as Call Of Duty? No. It was an exciting part of Sony’s briefing, and I don’t look at that and somehow decrease its significance.

I look at our briefing and I stand up and I have the next game from Playdead, the guys that did Limbo, and I’m showing Inside or I’m showing Ori. Ori’s probably going to be for some people 10, 15, 20 hours of gameplay and if it’s not $60 and it didn’t ship on a disk I don’t think it’s less fun.

GC: Don’t get me wrong, I spend most of my working hours trying to make sure people don’t think like that. I mean… No Man’s Sky. That’s like my dream game.

PS: It is an amazing achievement.

GC: But if motion control-only games are, relatively speaking, a creative dead end for attracting non-gamers what else can you try? Are games like Sunset Overdrive, which has a lot more humour and colour than many last gen titles, are they a sign of what you’re aiming for in the future? I’m curious if you specifically encourage or discourage trends like that.

PS: [to PR guy] I know we’re a bit over, but I want to just answer that last point.

GC: You’re in charge here, you take as long as you like!

PS: [laughs] The worse thing I think we can do is take a game like Ori and say, ‘Let’s make this a $60 dollar game’. And we make it bigger than it should be. One of my favourite games last year was Brothers, I thought it was fantastic.

GC: It was a great game.

PS: That’s why I put it right in the middle of our briefing. I almost opened the show with this trailer. And Brothers, I’ll go tell everyone to play Brothers. And Limbo, Max And The Cuse Of Brotherhood – I put it on stage last year. I think we got into that world where people thought everything needed to be $60 and if it wasn’t it wasn’t a real game. And that, what I thought we saw, was some core mechanics that didn’t support a $60, kind of 20 hour gameplay set-up.

GC: When I say I prefer traditional games over smartphone titles, I don’t just mean angry shooters. I mean the whole spectrum, I want games to be as diverse as possible. For there to be no dominate genre, or even, as you imply, price point or play length.

PS: Yeah, and I think we’re closer now, to that, than we were on 360.

GC: But just one last thing, Sony still seem quite happy going for very esoteric choices with their first party games – with left field games like The Order: 1886. Nintendo is Nintendo, but where do you see Xbox? What is its speciality? Do you even want a speciality? Because the 360 was, perhaps unfairly, known as the shooter box, but you seem to be aiming far beyond that now.

PS: For me, I want it to be the best canvas for all kinds of games and I think through the life cycle I think you’ll see different games define what success looks like. It’s not like there haven’t been shooters on Sony’s platform or there haven’t been action adventures on 360.

GC: Will you use studios like Rare and Lionhead to expand beyond your previous comfort zones?

PS: Lionhead’s game with Fable is gonna be a great game this year.

GC: You can imagine playing that with a girlfriend or parent or child, which I’m not sure is true of, say, Halo.

PS: Totally, and that’s why we showed it the way we did. Those are all people that work on the game.

GC: Is that the sort of game, or at least audience, that you’d like to see Lionhead specialise in, in the future?

PS: Yep, yeah.

GC: But Rare’s speciality used to be that they could do just about anything. So what happens to them now, with Kinect-less Xboxes in the wild?

PS: We’re having conversations right now about what Rare’s gonna do next. I think it’s important that the studio finds something that they’re passionate about, and that’s what I’ve always seen lead to the best success.

PS: Okay, well good job. Nice to meet you.

GC: Likewise, thanks very much for your time.

CLICK HER FOR OUR INTERVIEW WITH SONY EUROPE BOSS JIM RYAN

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