Q&A: Microsoft on Xbox Live turning five

When Xbox Live first went online five years ago, $49.95 would buy gamers a year's subscription to the service, a headset, and a pair of demos. For that price, customers could play a relatively slim selection of seven titles online, more than half of those sports games.

Today, every Xbox 360 game released has Xbox Live support integrated in it, either in the form of full-fledged online multiplayer, downloadable content from the Xbox Live Marketplace, the full game's availability on Xbox Live Arcade, or even just incorporating the basic friends list, achievement, and messaging capabilities.

As the catalog of titles offered has grown, so too has the number of subscribers. With the introduction of the Xbox 360 in November of 2005, Microsoft staggered its service into the yearly-fee Gold and completely free Silver levels, with online play limited to the former set. As a result of the change, the Live user base has increased dramatically, so much that Microsoft last week announced that it has surpassed the 8 million mark.

With Microsoft celebrating the anniversary of its online endeavor, Xbox Live Arcade product manager Jeremy Wacksman took some time to answer a handful of questions about the Arcade and Marketplace aspects of Xbox Live.

GameSpot: What are the biggest success stories for downloadable content on Live Marketplace?

Jeremy Wacksman: We're very pleased with the success of Xbox Live Marketplace. There is incredible momentum behind Xbox Live Marketplace with 10 billion Microsoft points redeemed to date ($120 million). More than 290 million pieces of content such as high-definition movies, TV shows, games demos, and Xbox Live Arcade titles have been downloaded from Marketplace since the launch of Xbox 360.

GS: Two years after launch, we're typically still only getting two days' heads-up on Live Arcade releases. Will gamers ever get more advance notice about the release schedule?

JW: It is our goal to provide Xbox 360 owners with news on upcoming Xbox Live Arcade-related content on a regular basis, which is often in the week preceding the release of new content on an Xbox Live Arcade Wednesday. We've also started giving gamers a periodic look into upcoming titles by announcing several games launching in a given month-to-two-month period in advance.

GS: We've had fewer demos and Live Arcade games miss promised release dates due to hangups with Live Arcade certification issues. Is that because developers aren't having as big a problem with passing certification these days, or have they just learned not to promise a release date until it is set in stone?

JW: Game development is a complex business and there are multiple reasons why a title might shift launch windows. What's most important to us is that we never ship a title before it's ready in order to ensure great high-quality games for our community. And overall, as developers have become more familiar with making games for Xbox Live Arcade, they've become more accurate with their launch predications.

GS: Last year Aaron Greenberg told us that the Live Arcade business was shaping up to be antiseasonal, in that sales were up in the summer and down during the holidays. Have you seen the same spike in sales around the holidays that the retail business experiences?

JW: Unfortunately, we don't share specific sales/revenue numbers. What I can tell you is that we continue to enjoy incredibly strong growth on the service. Within that overall growth, whenever there is an increased amount of fantastic retail titles launched, like we are seeing this holiday, we see consumers balance their activities between all those new games and Xbox Live Arcade. And conversely, as a digital service we enjoy an increase in attention outside of those retail windows.

GS: Are you noticing Live Arcade sales going up when there are lulls in the big retail releases, or sales tapering off when there's a huge new release like Halo or Madden to compete with?

JW: Gamers have limited time to play, and the appeal of Xbox Live Arcade is that you can jump in and start having fun instantly, whether that's for five minutes or a few hours at a time. When Halo 3 launched, we did see less users on Xbox Live Arcade, and that's attributable to the immense appeal of that title.

GS: Sony is already selling stand-alone retail-caliber games through its PlayStation Network in Tekken 5: Dark Resurrection Online and Warhawk. Xbox Live Marketplace has Oblivion: Shivering Isles and Tomb Raider: Anniversary, but both of those are sold as expansions to existing 360 games. When will Microsoft offer newly developed, previously unavailable full-scale games through the Marketplace?

JW: Since Xbox Live Marketplace launched with Xbox 360 in 2005, the breadth of content available for download has evolved significantly. Now, Marketplace offers everything from high-definition movies, TV shows, trailers, game demos, and Xbox Live Arcade games, and in early December, full-length Xbox Originals. While the service will continue to evolve, we have nothing further to announce at this time.

GS: What did you learn from Xbox Live Arcade on the original Xbox? Was it a success as anything other than a dry run for the Xbox 360 service?

JW: Xbox Live Arcade on the original Xbox had a few key successes for us. First, it was essential in proving that Arcade content was in demand with our audience. Second, we created strong partnerships with key developers and paved the way for the development and publishing process in place on the Xbox 360. And most importantly, we established what Xbox Live Arcade was--high-quality, pick-up-and-play games that are quick downloads, provide free trials, and leverage Live.

GS: XBLA has grown to the point where it typically has two weekly releases. You've talked about carefully managing the portfolio of games on the service, so it seems at some point you would want to cap the number of games available. Is there a maximum number of games Microsoft wants to offer? When will we start seeing older or unpopular games removed from the service? Will gamers get any warning before such games are yanked?

JW: We strive for a nice balance of content in the Arcade portfolio, and Xbox Live Arcade is and will remain a service that offers simple, pick-up-and-play experiences for everyone. We're committed to expanding the Xbox Live Arcade library and we just celebrated our 100th title milestone and plan to keep the games coming on the service.

We do not have any plans to remove games from our service. The beauty of digital distribution is that you can maintain a large library without the costs of the retail shelf, and the games on the platform can experience a healthy sales tail over time, which is highly attractive to developers. At the end of the day, consumers have shown the continued demand for more, high-quality content on Xbox Live Arcade.

GS: When the Xbox 360 came out, much was made of the opportunity it afforded independent developers to get visibility. But with the managed portfolio, there are fewer games being released for Live Arcade than are coming out in stores, and now developers are having to compete for approval with publishers like Electronic Arts, licensed games like SpongeBob, and advergames like Yaris. Is the indie community's chance to get on Live Arcade diminishing?

JW: Absolutely not. We have put tremendous effort into creating a platform that enables indie and professional developers alike to make great games for Xbox Live Arcade. Take the Dream-Build-Play game development contest, for instance. This was a program we put together to encourage experienced game developers and enthusiasts to create innovative and fun-to-play video games for Windows or Xbox 360 platforms using XNA Game Studio Express. Because of the amazing creativity demonstrated by the top winners, the Xbox Live Arcade team extended invitations to publish on Xbox Live Arcade to two of the winners. And look at our slate of great recent and upcoming games by indie developers. Alien Hominid and the upcoming Castle Crashers from The Behemoth, Cloning Clyde and Band of Bugs from NinjaBee, the new Mutant Storm Empire from Pom Pom, and the upcoming N+ from Metanet are just a few of the amazingly innovative indies on the platform, and we plan to see many more join in the future.

GS: What are Microsoft's goals for Xbox Live Arcade to accomplish by its third anniversary?

JW: By next November, we hope to continue the incredibly strong growth of the Xbox Live Arcade audience by bringing even more top talent and amazing games to the service. And we expect to see our development and publishing partners continue to raise the bar on quality, innovation, and gameplay. It is amazing to look back at how the service has grown over the past two years, and we are excited to see how much further it will go in the coming years.