Moore, Guillemot, Gordon Speak Out At MI6

Author: by Brandon Sheffield, Danny Cowan

At the MI6 conference, Microsoft's Peter Moore, Ubisoft's Yves Guillemot and EA's Bing Gordon sparred on a heavyweight closing panel, and Gamasutra has highlights from the Michael Pachter-moderated showdown. The panel, 'Gaming 2010', was billed as "A blue ribbon panel of experts project where the gaming future is headed in the next 3-5 years', and the full line-up included William “Bing” Gordon, EVP & CCO, Electronic Arts; Yves Guillemot, President & CEO, Ubisoft; Peter Moore, CVP Interactive Entertainment Business, Entertainment and Devices Division, Microsoft; Dale Strang, EVP, IGN; Steve Roberts, VP/General Manager, DirecTV. The moderator was Michael Pachter, Managing Director, Research, Wedbush Morgan Securities, and he started with the following introductory statement: "We are talking about gaming of the future, and not necessarily three years from now. We are going to focus on things that can converge using games as a context. It could be applications, and it could be hardware. The panelists each have slightly different perspectives." Highlights from the panel, directly quoted in each case, are as follows: EA's Gordon Sasses PS3, Wii Michael Pachter: The Xbox 360 Elite has a tremendous capacity for downloadable content. How do you think your competitors will respond to that? William "Bing" Gordon: What Internet? Peter Moore: I can only speak for the strategy that we have laid out, but it's the software and the service layer that is Xbox Live that really powers our hardware... So I can't speak for our competitors -- Bing maybe will! Moore On Xbox Plans Peter Moore: When we at Microsoft think about how we will be doing business three or four years from now, we think about the three C's: Connected, Community, and Content. And content is not just games. When we built the original Xbox, broadband wasn't as ubiquitous as it is today, but the courageous move to require a broadband connection for the original Xbox laid the platform for where we stand today. More than six million people today connect through Xbox Live... The second thing is about community, about the role of user-created content, and this concept of personalization of the entertainment experience... The third of the three C's is content. Michael points out that content is going to be the real thing that determines winners and losers. It's not just content from the point of view of games, though they are going to be incredibly important. There's high-definition movies, and TV shows. The thing we need to do as an industry is to play an important part of the visual entertainment lifestyle of our consumers. Those are the three things we will be talking about in the future. None of that would have been relevant to the conversation five years ago. Ubisoft's Guillemot On CG Movie/Game Plans Yves Guillemot: We created our studio in Montreal to not only help them create movies, but to also watch the way they do it, so that we can cross the studios. We think that in doing that, we'll create excellent movies, and we'll improve the quality of our games. We know that if we can create games and CGI movies, we will be able to distribute them on Xbox Live. Michael Pachter: Do you propose to give the movie away, sell the movie bundled with the game, or sell the movie separately? How are you going to know the same person will both want to watch the movie and play the game? YG: We don't yet have the answer to that question. People who want to buy games also want to get things surrounding the game. Because of the cost of the games, we'll have to ensure that they can afford the movies. MP: You have the potential to demonstrate a technical advantage that will be appealing to movie studios, intellectual property-wise. They may want to align themselves with you and have you make movie-based games for them. On the other hand, I wonder if some of the major studios will look at you as a competitor, and will limit your opportunities. What do you think about that? YG: What we are seeing is a learning in the way they do things. There is alignment. We'll be able to use graphics and animations, and with the know-how to make CGI movies, we'll be able to plan with the IP. Bing Gordon Pinpoints Growth Areas Michael Pachter: EA's COO has talked about how he wants to have a marketshare in everything gaming, from online, casual, and mobile gaming, to in-game advertising and downloadable content. Bing, do you think that's something EA can actually accomplish? Bing Gordon: We want to have a boss that sets big goals and challenges. What I've found is that market-makers don't think about market share. They think about customers and unmet needs. Let me talk about 2012. 2012 is a good time to think about, since it's the next time that a new generation of consoles should come out. I'd like to talk about three groups of people. One is all of you sitting out there. There are no hall of fame marketers in the video game business. They all started as marketers, then became general managers. The question is how involved you can become as a general manager in five years. The good news is that as games go from things to buy to places to live, marketing is going to turn back to its roots. After almost a century, we get to the point where products are revised daily based on customer feedback. If your companies aren't measuring user telemetry and aren't getting user data, you're in the wrong company. You're going to miss out on the hall of fame. The second group is college kids. That is the next generation of game builders, so it's really easy to pay attention to what the next generation wants to build. Only about a third of the kids in university right now want to build epic video games that are advertised on TV. About a third want to do games for a public purpose, which leads me to believe that serious games are going to become really important, but the thing is that nobody knows how to monetize them. Nobody knows how to monetize America's Army, except to take money from the Army and get security clearance for everybody who works on it. There is a marketing hall of fame to be had for people who can figure out how to monetize and bring to market serious games. The last third makes small games. Casual games on Xbox Live Arcade are being monetized at about a nickel an hour. Video games have been traditionally worth about 25 cents to a buck an hour, so figuring out how to create a model for that is important. The third customer group is high school kids. The young kids today want interruptible, multitaskable media. As Peter said, personalizable and customizable are somewhat different. We're trying with games like Spore and Tiger Woods to build games on this new foundation. We're learning on the fly. All of you are experts on people, so hang out with college kids to find out what they want to build, and with high school kids to find out new ways to use the Internet. And the future of interactive entertainment is 100% Internet-based. Guillemot Talks Downloadable Content Michael Pachter: As we see more downloadable content, there will be some cannibalization of game sales. Purchases will last longer if there are new map packs or new levels. How are you going to market that, and how does that affect your product cycles? Yves Guillemot: It's funny, because the more you give them, the more they want. They'll want the next game as soon as possible. The point of downloadable content is making sure they'll keep playing your game, instead of moving onto another game. Downloadable content never affected our sales before. DirecTV's Roberts On The Future Of Gaming Steve Roberts: Gaming and the gaming industry is forcing traditional media to change, on the hardware side and the software side of content. Things we're seeing are the ability to swap content that's downloaded onto the DVR, and then convert it. You'll be able to bring over things from your DVR to your PC. It's the same thing with consoles. In three to five years, I wouldn't be surprised if a next-gen Xbox or the PS4 had a tuner inside the box. Gaming is driving that consumption of media. People want their content when they want it, where they want it, and how they want it. Things like IGN and Xbox Live are changing media for all of us. It's changing our hardware, and how it interfaces with consoles. Our hardware is meant to interface, not compete. We're in 20 million homes, so how we integrate with next-gen consoles or the IGNs of the world is certainly a focus in the next five years. We're concerned with the ways that gamers are going to get their digital media. We consider the fact that gaming is so big and ubiquitous that we are creating the type of content that will appeal to this critical market. MP: You've talked about swapping content between the DVR and the PC. Could we see, for example, a download of the Ubisoft game through IGN onto the PC, and then swap it? Where do you see the content coming from, and what is DirecTV's role? SR: I think content will be coming from all of those areas. Not only will we be sending it down through satellite channels, but we'll be bringing it in through broadband connections. You'll be able to download game trailers and things like that. Whether you'll be able to play games on the set-top box? Probably not. But that connectivity between our DVR, the Xbox's hard drive, and IGN's delivery content is where you're going to see the interaction.