X05 Q&A: Allard speaks

Microsoft corporate vice president J Allard closed out Microsoft's X05 conference in Amsterdam this week with a roundtable Q&A session that touched on a number of topics, from space limitations of the Xbox 360's DVD disc format to Xbox 360 launch plans to the Revolution's controller. Here are some of the highlights.

Q: Have you seen any results or anything coming from XNA? Are they involved in any games that are out there?

J Allard: I think you've seen a couple of things. Certainly the XNA studio product that we're going to be coming out with next year is probably where you're going to have a bigger impact. It's going to have more influence on how people are designing their games. … Mostly, I would say that it's little wins right now. And that the bigger wins are going to come out in the future. That said, John Carmack in the video last night says, "You know, finally there's a console system. Finally a console system that has better design tools than the PC. I'm trusting the future of what built my company, Wolfenstein, to Xbox 360 as a primary development platform." That says something: that we're doing something right in the software space.

Q: Developers have already said they're filling up the space on the 360's DVD format and are having problems with compression. How's Microsoft responding to these concerns?

JA: Oh, we try to do better with compression. I mean, we're not totally where we want to be with compression. Honestly, just to be frank, the stuff comes in hot. Here we're trying to do a worldwide launch of this very ambitious program and developers will tell you that they're not really satisfied with what we did with the DVD emulator or compression. And, therefore, their layouts on DVD…they're struggling with that. They're cutting corners. I mean, basically, what happens is when you get final hardware late, you're sloppy. … You got to take every out you can, and so they're not applying all their talents as they will next year or the year after to get every little bit they can out of it. They're being a little sloppy with the CP. They're being a little sloppy with the disk. They're being a little sloppy with the formats and compression to make launch. And next year, you'll see that they tighten that up and they can get more out of the system by using the same disk capacity, the same memory, and the same art tools. They'll be able to get a lot more out of the system next year.

That's why games look better year over year. It's primarily because hardware comes in hot and developers use the deficiency of the schedule not just to learn about hardware, but also to cut a couple of corners.

Q: So, what is going to be on the hard drive?

JA: Good stuff. There'll be video content. There'll be a little bit of audio content. … There'll be a soundtrack. We're putting together custom soundtracks--some really good tracks on it. Basically, it comes with a free album. We're going to have some video on it. We'll have a little "Making of Xbox 360" and a couple of other little video samplers, some gamer tiles. Some additional gamer tiles will come with the hard drive. Hexic, a quick little puzzle game--that comes with the hard drive.

Basically, what we're doing with this extra content on the hard drive is starting to show users [what the marketplace is for]. It's really no fun to go to the video section and have them say, "No videos found." It's a little bit more fun to go to the video section and see a whole three-minute making-of video and to say, "Well, OK, I understand what that section's about." It's a little more fun going into the trailer section, seeing a couple of trailers and seeing some stuff in the marketplace. So, you know, part of it is to get the gamers understanding capabilities of the game system and discovering more and encouraging them to discover. Part of it also is giving them a little bit of an extra bonus.

Q: Will that content be on hard drives sold separately from the system?

JA: Yeah.

Q: How many Xbox 360s do you think you're going to ship in the first year?

JA: We have a term for this. It's a very technical term. It's called a very hard problem. It's just hard. I can't comment on numbers at all. You can try all you want. I'm not going to give you any numbers partly because we're only in the beginnings of manufacturing and the rate that we're aiming for is very, very steep. … I don't even have a very accurate forecast from my boss. And until that happens, we don't really tell everybody else. The other thing is the financial community. We have to be very deliberate about numbers like that for all sorts of reasons.

It's actually regulatory issues with that that we have to be really cautious of. So, that's why we won't comment on the numbers. But manufacturing is going really well and, honestly, we decided, as a management team, that we'd rather take the heat on all territories saying, "We wish we had more," and we had to say, "Sold out," in too many places. We'd rather take that heat than take the heat from Europe saying, "Why do I have to wait for a year?" We designed a worldwide product with worldwide partners and worldwide ambition and the world deserves to see it all at the same time and we're not going to have enough. That's the fact. And no matter how aggressive we are with our [manufacturing], no matter how good our yields are, that's going to be the fact, which is another reason for the manufacturer to go worldwide.

It was ambitious and we know we're going to take some heat. But, hopefully, it's the right thing for the industry. You know, sometimes the right thing to do, the gutsy thing to do, is just the hard thing to do. And our partners are certainly glad that we're doing it. I think the gamers worldwide are glad that we're doing it.

Q: Where is it being manufactured?

JA: We're making it in Europe. I'm sorry, China--two different manufacturing facilities, one by the name of Wistron and the other Flextronics, both companies that we use. … We've got boat containers. We've got planes. We're going to have machines leaving on both. [The launch] is a logistical nightmare. It really is. It's going to be a whole new thing. It won't go perfect. It just won't. And like I said, I'd rather apologize for not having a perfect worldwide launch and not having enough units than say, "Now we got it right for this set of customers." You know, "Sorry Activision. All that money you poured into those franchises and those games--those are going to be old by the time we get around to selling it in Europe. So, never mind."

Q: So, it looks like a lot of publishers are going to be distributing their games a week before November 22. Will they also go on sale early?

JA: Could happen. I don't know. We haven't certified a game yet. There's no game in manufacturing yet. That's the only thing that I can attest to. When we do, it's going to be a retail-by-retail decision. I don't think we're doing anything to try to coordinate that and it's just one way or another.

We're hoping all three of the first-party games make day one. We're on a good trajectory with all three of those. Can I guarantee day one? No. What we learned with Halo [2] is you don't ship a game before it's ready. Not that we shipped a game before it's ready, but because we were very wise to wait until November. I put in the capabilities that we wanted. The teams, each of the first-party teams that are working towards launch, have a bar. And they say where they want the game to be needs to be over this bar before we say it's ready. They're all incredibly motivated and they're working very, very hard. They know there's a chance that they don't all make day one. They'll all make this holiday though.

Q: Is there a concern that other companies would update the software on their products like the iPod or the PSP to make them incompatible with the Xbox 360?

JA: You know, you can't worry about stuff like that. [We're with the] consumer to the end on this one and anybody in my company that thought it was a bad idea for us to plug in Sony devices or Apple devices into this thing, I ended that conversation pretty quickly. I said, "This is the right thing to do for consumers." You know, once they've invested $500 for a digital media library, you can't ask them to go buy a 360 music player and a 360 digital camera and--no. They got their stuff. They're going to want to plug it in. We're going to be open here, guys. And if anything, I wish we could be more collaborative with the other companies that are doing those things. And if Sony or Apple called me up and they say, "Hey, we want to do some specific stuff with 360," I'm on it. I think it would not be in anyone's interest to say we're not going to work with 360. I think it's good for them and I think it's good for us. I think it's good for the consumers.

[Apple CEO] Steve [Jobs] asked me for one when this thing comes out. "I want to get one of these things. It's pretty cool." And I was like, "You didn't give me much of a break on those 7,000 G5s we bought from you, you know. We'll ship as many as you want, full retail, baby." No, that's not true. Apple was a good partner with the development kit program. So, I don't think it's pro-consumer to do anything like that. I think it's a silly thing to fight over.

Q: What do you think of suggestions that the Xbox 360 isn't enough of a departure from the Xbox?

JA: It is an interesting question. Do they want it to be a holographic experience that you play in your bathtub? We could have made it different. Different in this case is not necessarily better. What we've tried to do is actually build off what's been successful historically and say, "Look, the categories of games, our core games, we're going to have those covered." We're going to have sports and racing. We're going to have fighting. We're going to have role-playing games early on. We're going to have appropriate content in all markets. The shooter category, which, if you were talking to me five years ago, we would have said, "What are you doing with first-person shooters on your console? These are crappy PC ports. It's a really bad idea." Many people had that opinion. And now, of course, first-person shooters are a very big category. I think that we are doing some breakthrough stuff: what we're doing with Xbox Live Arcade, what we're doing with the integration of media, the ambition that we have on high definition, the commitment that we have to wireless. While the other guys have announced wireless as well, the fact remains we're still the first console that's ever shipped with a wireless radio out of the box and world-class audio with wireless controllers. So, I think we've taken the very best for gamers and made it better and I think we've taken the best innovations with it. Whether it's Live or whether it's voice or whether it's Live Arcade and integrating or deepening the system and connecting out to the media, stuff is what gamers want.

So is my cell phone the same thing but not a different thing? Yes, it is, but I'm glad it's got a colored screen. I love text messaging, and the camera I can't live without. But it's really nice that it connects with my schedule. At the end of the day, it's still a thing I use to make phone calls with and I still call the same people. But, heck, it's a lot better. It's next generation. If I compare it to the first cell phone I had, it's a whole world different. And if you go too far and you say, "I'm going to change the category out completely and we're going to give you a wacky controller. And we're going to give you wacky games that you don't really understand, and we're going to market it or price it in a wacky way, I think that would have been very much a failing."

Q: How will the Xbox 360 affect competition between console and PC gaming?

JA: I think that PC gaming and console gaming are different. On my PC, I play real-time strategy games. I play more casual games. I play MMOs. I play things that require a lot of keyboard, a lot of mouse, a very high-definition screen that I play by myself. On my console, I sit around the couch. There's usually some beer on the table. There's usually other people on the couch. It's a big-screen TV and it's usually action where there's a lot less precision required and I'm less bummed out if my army's wiped out because I just press restart and start again. You know, it's a five-minute or 15-minute experience as opposed to the hours that I put in to end an Age of Empires game or something like that.

So, while there is overlap and there will continue to be overlap, I think that the PC has a category of games that's very complimentary. To the contrary, the PC gaming can be very, very healthy and grow quite a bit in the innovation space. It's still an open platform. You can write games with a PC for free. You can distribute them for free on the Internet. So, we see a lot of innovation on the PC. The number one brand for franchisers established in the last 10 years was The Sims, which hasn't done anything material on consoles. It's hard for me to accept that PC competition is bad. I think it's very complimentary. I think that the Xbox has taken the best of the PC that's appropriate for the living room and blown that up to high-def for the whole screen. And I think that what we're doing with Xbox Live and bringing the PC community together with the console community is going to be a great differentiator for us and a great service to our publishers and gamers.

Q: Do you have office pools running on how long it will take hackers to mod the 360?

JA: No, we don't. We don't have office pools like that. We do know that they're already being very ambitious with it and it's flattering in a way. There will be the hobbyists that want to rip it apart. There'll still be the pirates that want to rip it off. We can't avoid that. The philosophy that we applied on 360 is, "It's going to happen."

With Xbox 1, we were not in denial, although we said, "Let's build a system and we can stop it." With 360, we said, "Let's assume we can't stop it. How are we going to manage it?" Because it is going to happen. They are going to attack. They are going to have some form of success. What can we do in the Live business and the Live community? What can we do with the media? What can we do at retail? What can we do with connectivity to try to put a really big speed bump in place and, most importantly, protect the gamers from the hackers making it a crappy experience with them? Because that's my biggest nightmare.

If we lose 5 percent of our revenue, that's bad. But if Xbox Live gets distorted and destroyed because of three or four bad people that just want to have a grudge against Microsoft or somebody that they're playing against; that just want to ruin and wreak havoc on Live, that would really suck. That would really suck. So, that's where I'm more sensitive to them than the money.

Q: How do you think the competition is reacting to the 360 launch?

JA: I hope that Sony's nervous right now, honestly, because the launch lineup looks great. They've shown two really good movies and a picture of a console that doesn't have any ventilation holes in it yet. I mean, if [you look at] their list of claims versus their list of proof, there's a big, big gap there to close between now and spring of 2006. So, if I was in Sony's shoes, I'm a little nervous now because our lineup looks great. Our hardware's the same. We got to kick ass on that and service--it just got better. Our media support is really, really good and we got the design right. If I'm [Sony Computer Entertainment president] Mr. [Ken] Kutaragi, I've got a lot of work to do between now and spring, but hopefully attending the worldwide launch thing is another thing I'd be thinking about. Hopefully, that's all goodness. Hopefully, it's spurring the Sony team and they're saying, "We've got to get serious about online. No more rhetoric. Let's go about our service. Let's go buy somebody. Let's go buy somebody else. Let's go get serious about it." And when they bought SM Systems, God bless them. If my GDC keynote contributed to Sony having better tools on PlayStation so developers could be better on PlayStation, [so they] could focus more on games, God bless them. That's a good thing, you know. If they're embarrassed by their controller design as a result of having played with our wireless gamepad and they make a better toy, God bless them. It's good for the industry. I hope that it's healthy competition.

And if they are a little nervous and that they're looking at what we've done and said, "Hey, for the things we're not quite finished with, we're going to do them better. You know, we inspire to do more as a result of Microsoft being in the market." That's what I hope they're doing and I hope they're not being complacent and saying, "Hey, we got a great brand. We got a great couple of franchises. We're unstoppable because we've had two rounds." I hope they're not doing that. I hope they're going to put up a real good fight for position number one because if they do, consumers benefit and it will grow that market. That's what I really want.

Q: What do you think of the Revolution controller?

JA: I think it's well intentioned. I think it's brave for them to say, "We've got to make it more approachable." It's the same reason behind our DVD remote. At the press conference, I could have done my whole demo on the DVD remote. You're going to be able to play casual games on Live Arcade with the remote control.

Four years ago, I wrote an e-mail treaty and said, "Why can't I scroll down my channel guide with a gesture instead of up, up, up, up, up, you know and looking for the page up instead of item up?" We did a lot of research on gamers and talked to a lot of game developers and said, "Should we put an accelerometer in there?" And there wasn't that much enthusiasm around it. Maybe Nintendo will be more persuasive and have more ideas on first party and that will take off. I don't know. I don't think that's the way you're going to play bingo. I don't think it's the way you're going to play Madden, and I don't think that's the way you're going to play racing games. I think that traditional control for traditional categories is going to be what drives [the market]. I don't think most Electronic Arts games will be played with that.

Nintendo wants to do innovative games to bring new gamers in. That's good to the extent that we think, "Yeah, we've got to do something like that, too, because now there's a category for third parties who really want to simplify control. That's good."