Q&A: XBL's Aaron Greenberg

Last night, Microsoft reps braved a journey to San Francisco's seedy Tenderloin district to hold a retro-themed shindig at The Phoenix Hotel's Bambuddha Lounge to unveil its summer Xbox Live Arcade Wednesdays program.

The promotion, an answer to frustrated 360 owners demanding more downloadable Arcade games, has already kicked off with this morning's release of Frogger on the Xbox Live Arcade Marketplace. For the next four weeks, a new game will go live on the service every Wednesday at midnight (the lineup is Cloning Clyde, Galaga, Street Fighter II: Hyper Fighting, and Pac-Man, in that order).

Xbox Live group marketing manager Aaron Greenberg took some time for a poolside chat with GameSpot at the event. The discussion started with more details about the newly announced program before stepping back and taking a look at the larger trends surrounding Live Arcade and the Marketplace.

GameSpot: On the Wednesday program. Is that just for the summer or will it run in perpetuity?

Aaron Greenberg: People may have noticed we've gone a little quiet on Arcade lately, and that was definitely done with thought. We have been getting our portfolio lined up to be able to provide a regular scheduling of titles for consumers. Going forward, Wednesdays will be when Xbox Live Arcade games launch.

GS: Now that's not a guarantee that we'll be getting a new one every Wednesday, is it?

AG: No. It's just a regular flow of titles. This is the first wave that we've been able to confirm and lock down launch dates of, and there's a second wave following that. We'll have 30 games by the end of summer, and 50 titles by the end of the holidays, just for Arcade. Going from 21 games today to 50 by the end of the year, you're going to see a lot of those titles that we announced at E3--things like Lumines Live, a lot of the other retro titles--those titles will be coming between now and the end of the year.

GS: Will demos be coming on any kind of a regular schedule?

AG: Those are really determined based on when we get the content from the publishers and when they go through our certification process. With the Arcade games, because that's our own platform within Live, we're able to manage the publishing process a little bit tighter. So we've got titles that are completely done or at the very last phase of their certification process and have been able to agree to the timing of when they will launch so that we can roll out a new title every week. And we think that's important. Consumers would rather [have us] not dump three games on them in one week and then have nothing for a month. … We still want to manage the portfolio in an appropriate way.

GS: Why wasn't the regular release schedule done from the beginning?

AG: We were totally surprised at how Xbox Live Arcade took off. We never expected it to be anywhere as big as it is. We always thought, "Arcade is going to be this great destination that is going to provide broader game content to beyond the core user--games maybe your sister might play, or younger gamers, or just people who aren't as core to the game experience." What really surprised us is that the core gamers were crazy about it. Geometry Wars, everyone called that the killer app for the 360 launch, the Halo of Arcade. ... We're just now catching up a little bit to the reaction from the community around that. Now we feel like we've got our ducks in a row.

GS: Do you expect the Xbox Live Arcade market to be seasonal in the same way the brick-and-mortar market is?

AG: Good question. I actually think it's almost antiseasonal. It's almost the opposite of what we'd see at retail in some regards. At the holidays, it's so much about gift-giving and people going with the safe bets and the big franchises. People are buying the Need for Speeds and the Maddens and the Grand Theft Autos of the world. And what we're seeing with Arcade is that the summer is like the perfect time. People are off from school, every game has a free trial… [Games like Small Arms] really haven't had a place to be before. Those are games that we think people are going to be willing to try out and experience in the slower times of the years for the retail business.

GS: It hasn't been quite a year yet for the Xbox 360 Arcade, but what trends have you noticed?

AG: We look a lot at what we call the trial conversion, what percentage of people that download trials of games go on to purchase the full versions of them. When we first launched Arcade, we looked at the PC market and the cell phone market, and they're usually seeing that 1-2 percent of people that get a free trial go on to pay for something. With Arcade, we're seeing sustained levels of 20 percent trial conversion across all titles. Our top game, which right now is Uno, is converting at 50 percent. Those are trends that really caught our attention.

GS: If someone buys it outright, does that count toward the 50 percent, or do they have to buy the trial first?

AG: That's just the people who go trial and then buy [the full version].

GS: Have you looked at how Live Arcade downloads compare during weeks when there aren't retail releases coming out or when there isn't a demo coming out?

AG: Right now we've just looked title by title. We haven't necessarily compared it to what else is going on in the space. With few exceptions, the Prey demo being one, these games stand on their own. Even if there's a new demo, people are still going to want to get this game either way. But if we did a playable demo for Gears of War, yeah, that would probably impact it.

GS: How long do you think it will be before Nintendo and Sony get their online content services up and running?

AG: Well Sony hasn't said much. It's hard to know what they're doing with online. Nintendo's got a great back catalog of stuff and I think they'll take a different approach. In a lot of ways, we're the first to do this and breaking ground in this space. And in some ways, I think it will complement what we're doing. One aspect that we're focusing on that I don't think anyone else will is with independent developers. I don't think Sony or Nintendo is going to be in that space in a really big way.

GS: Before Live Arcade, if any of these independent or casual games wanted to be on the system, they would have to go through brick-and-mortar channels or Web sites to reach consumers. Has the success of Xbox Live Arcade caused any concern or friction with your retail partners?

AG: We've made efforts to keep them involved in the ecosystem. First and foremost, the games that we're selling in Arcade today are not games that are sold at retail. There's no way to sell a $5 Frogger at retail--the economics of putting Frogger on a disc, advertising it, distributing it--there's just no way to do that. Or the independent games like Cloning Clyde, that game would never get published, unfortunately. So we're not really competing with what [retailers] are doing.

And the way we keep them in the ecosystem is with prepaid points cards. So anybody that doesn't have a credit card, anybody that wants to give those as a gift, you buy those at retail. And those are selling really well, so the response from retailers around that has been really positive. The other thing that we've done that not a lot of people know about is that if you're an Xbox Live gold subscriber and you renew through your credit card through your system, it's $50 for a year. But if you buy a prepaid card at retail, you get a free month. So you get 13 months for the price of 12, and you only get that at retail. … We've tried to provide some incentives and a way to differentiate for retailers.

GS: Now there's a Live Arcade Unplugged coming out later this year?

AG: All we have said about Live Arcade Unplugged so far is that we're looking at it as an opportunity to reach the unconnected gamers. At this point we haven't announced timing or price or what would be in it, but we are in the investigation stage and we are looking at doing a SKU that will provide Arcade on a disc for people that aren't connected to Live. But beyond that we haven't given any details.

GS: Thanks for your time.