Q&A: Xbox Live and Europe

The recent European release of the same Xbox Sega bundle that Microsoft made available in North America a couple of weeks ago has given the sales of Microsoft's console a considerable boost. Despite the arrival of Super Mario Sunshine and a GameCube bundle containing a copy of that game, the Xbox has recently overtaken Nintendo's console in terms of both weekly and total sales in some European countries, including the UK. Microsoft's next major push is Xbox Live, which is due to launch in North America at the end of this week.

We recently met with Michel Cassius, the European head of Xbox Live, and Richard Teversham, the UK head of Xbox marketing, to discuss the future of the console, the challenges of launching Xbox Live in Europe, and whether Microsoft is using the Xbox Live service to monitor subscribers' gaming habits, among other things.

GameSpot: Will launching Xbox Live in Europe be made any easier by the fact that you'll soon be able to get feedback from users in the US?

Michel Cassius: We hope so. We hope the fact that they've launched in the US will allow us to learn from that, but we've got to be realistic on this--Europe is different from the US. There are different languages and different broadband providers to consider, so we are going to learn ourselves from what we do here.

There's one thing, though--the platform of Xbox Live is the same worldwide. We've got 20,000 people already playing in the US, we're going to have 3,000 over here, and the Japanese will be launching before us as well, in January.

On our side, we are learning through the phases that we put together. There's the consumer beta, which is starting this week. Then we've got the test drive, which is starting at the end of this month or at the beginning of December, and then we've got March 14, when we launch at retail. It's all making for a good learning curve, and we're trying to learn as quickly and as much as we can.

GS: You mentioned the language barriers in Europe. Are all the Xbox Live games going to enable players to choose to play with people who are speaking the same language?

MC: There is a way to do filtering right now within the platform, and all the games can benefit from that. So, for example, you can invite only your friends to play if you want to. So usually, your friends and the people you talk to are going to be speaking the same language as you, so you can do that. Looking into the future, we will probably have something that says "this person speaks this language" so you can choose the language that you want to play and then your language will be one of your attributes. Right now it's not on, but I don't think it will be a big issue. One thing about online gaming is a lot of people play with people they know, so the fact that there is the gamer tag and the friends list is very important for launch.

GS: Do you think that Xbox Live games in the future will be designed to encourage the use of voice in a bigger way--in team games, for instance?

MC: It will. I mean, when you look at team-based games that involve things like stealth or sports, you can imagine situations where I could give you instructions like, "Go left. I'll go on the right," and only you can hear me so our enemies don't know what our tactic is. I think more games will definitely start to use voice like that.

MotoGP actually uses voice in an interesting way too. Climax decided that they wanted to have a maximum of four people talking to each other, and the way that they've done that is that when you talk, the only people who can hear you are the three people closest to you on the track, plus one person that you choose. So there's different ways to balance it, and that's part of the gameplay.

GS: Given the cost of broadband in Europe, the fact that it isn't even available in a lot of areas, and the fact that under 5 percent of people in the UK actually have it, do you think the time is right to launch a broadband-only online platform?

Richard Teversham: I suppose the question to ask you then is, "Why would people have broadband today?" Probably just for PC gaming, and that's it, really. I know that once people get broadband they never want to give it up because the speeds are just beautiful. We've obviously been talking to BT, NTL, and Telewest, and they're really excited about Xbox Live because they see this as the killer app, and they see this as something they can use in their armory--giving people yet another reason to have broadband in their home. So, it's almost like, you know if you have a PC in the home you can get broadband and everything will be a bit quicker, but if you can also have your Xbox on broadband, then you know what? That's a good reason to get broadband. We are working with them on joint marketing plans so they can take advantage of our customers and we can take advantage of their customers, and working together we hope to get as many people as possible using broadband and as many people as possible playing on Xbox Live in a very simple, easy way.

So today it is not a simple thing. I mean, Germany's great because there's only one service, but in the UK there are lot of different services. We're working with each of them to make sure we have an easy solution--and that will probably end up being an Xbox-compatible broadband service, so they are the ones we recommend from the different suppliers. Also remember that this is just what they'll supply today. Half a year or two years down the line they may be providing an Xbox-only broadband service. You know, they will evolve with us in time, because initially we're going to have a very tight audience of people with broadband and Xboxes who are committed gamers, but when we hit Christmas a year away, that's when we'll probably go massive and go to a much wider audience. At that stage, the whole infrastructure will be set up and the whole thing will just be going like a train.

The point here also is that if you're a third-party publisher, this is the only service. It doesn't matter what your size is--you can develop a game for this platform. If you're with our competition, you actually have to do everything yourself. That's security, making sure hackers don't get in, gamer tags, and all those sorts of things, and a lot of people can't afford to do that, so our service is accessible to all the games publishers while the competition's isn't. So they will eventually have games for the Xbox or Xbox Live.

GS: So if Xbox Live is a killer app for the broadband service providers, in terms of software, what is the killer app for Xbox Live?

RT: Well, initially, it will be Unreal Championship. You know we're going to have seven games for launch and then 50 games coming out the following year. But, I mean, you've heard them--we've got Counter-Strike, Star Wars Galaxies, Halo 2, and a whole host of other games coming out. Before Christmas, we're going to have Unreal Championship plus another six games. Also, some games you won't actually be able to play on Xbox Live but you'll get downloadable extras. So, Splinter Cell, for example--you'll be able to download additional things for that game. Then, in time, we'll be looking at Xbox Live-only games. We're doing it in different stages.

MC: You asked about the killer app, and as far as the games go, I agree with Unreal, but I think the real killer app for Xbox Live independently of the games themselves is voice. The fact that you can talk while you play and can invite your friends and play with them wherever they are--it's magic. For example, we've been testing Unreal, playing against people in Sweden and in the US, and it's just amazing. It's like giving a phone call to someone you haven't seen in quite a while. The first thing you say is, "So, where are you?" and they say, "I'm at home," and you say "No, no, where are you? Where are you in the game?" and you start talking to them as if the game were real.

GS: The starter kit comes with a 12-month subscription, so after that date you'll be charging a monthly or perhaps annual fee for the service. Have any decisions been made concerning that?

RT: Nothing is decided as yet. We've got until March 14, 2004, to decide.

MC: The best analogy for the service itself is probably the one about mobile phones. So when you want to subscribe to a mobile phone company you can choose to pay as you go, you can pay monthly, you can pay on a yearly basis, and so on. There are different packages available, and we're thinking about it like that.

GS: So, since you haven't decided what the costs are going to be yet, would there be anything to stop someone from going out and buying a second starter kit for the 12-month subscription if that turns out to be a cost-effective way of doing it?

MC: That's a good idea. We'll have to think about that when we look at pricing. [Laughs]

RT: But if with your gamer tag you're number one in the Halo league or something like that, are you really going to want to trade that in for another one when you buy a second starter kit? That gamer tag is unique to you. If you get a new one, you'll have to start at the bottom again and reestablish your reputation.

GS: We've got some readers in our GameSpot forums who have been beta-testing Xbox Live in the US, and a couple of them have expressed concerns about two-way traffic on their connection. Basically, they're concerned that Microsoft is monitoring their gaming habits--which games they're playing, how long they're playing them for, and so on. Is this the case?

MC: What we want to make sure is that the network is secure, actually. I mean, of course we know the traffic, and of course we know the sessions, but we're not tracking individuals. We just want to make sure that it works for everybody, and that it's secure for everybody so nobody's gamer tag can be hacked.

When it comes to individuals, it's more when people find that they are being bullied or something like that by some people in a game. They would then be able to bring that to our attention and say, "You need to do something about this guy, about this gamer tag, because they are behaving in a way that ruins the Xbox Live experience for others." Otherwise, no. You know, there's this big thing about "big brother," right? I've heard that so many times. If you've got a subscription to broadband at home with whoever the provider is, do you just think, "Ooh, I'm surfing the Net, maybe they know what I'm surfing"? Maybe they do, yeah, but is that basically what it is about? No, I don't even think of that. There's a privacy statement on the Web site, there are rules and regulations, and there are terms and conditions when you sign up. We basically comply with all the regulations, all the rules, all the privacy statements, and everything there--we're very, very clear about that.

GS: At one of our previous meetings, you stated that you were able to tell if someone on Xbox Live was using a modified or chipped console, and that you were considering excluding those people from the service. Has a decision been made on this matter?

MC: We haven't decided yet. What we do know, however, is that updating the Xbox dash for Live seems to create some problems with mod chips.

RT: So, it's not deliberate, but by default... And on those machines the warranty has gone.

GS: We've heard that publishers have to pay an additional royalty for Xbox Live games and that you've had some resistance to this from companies such as Electronic Arts. Is there any truth in this?

MC: I'm not speaking for EA, because they're big enough to speak for themselves. But here's the thing: We have invested in Live the same way we have invested in the offline platform. It's a big investment. The way the thing works from a financial perspective is when there are royalties to be taken from the platform. We developed Xbox Live as an extension of the Xbox platform. It's a platform, and we've done all the investment and all the heavy lifting. When we do that, as Richard was saying earlier, the publishers and developers can only benefit from it. They don't have to do the servers, they don't have to do the authentication, they don't have to do the security, and in some cases they don't even have to host the servers. There are plenty of things they don't have to do, and that's at a cost to us.

So, looking at who is able to do the same thing that we have done, there are only a few companies. Yes, EA has invested a lot in its EA.com, but I'm sure there are ways that we'll be able to work with EA. We've got a very good relationship with them, and I hope we'll find a way to have their products on Xbox Live.

GS: It's recently been confirmed that Xbox is now the number-two platform in the UK, ahead of the GameCube. Are you confident that you can now stay there and perhaps start chasing after Sony?

RT: You know, we've just moved up to number two in the UK and we're feeling really good about that. We thought we'd just built a platform, but if you look at it, it's very basic. Our lineup for Christmas is better than the competition--that's Sony and Nintendo--and after Christmas we've got a whole host of exclusive games, including Beach Volleyball, Metal Gear Solid: Substance, and Brute Force. Then we've got Halo 2, Project Gotham 2, Perfect Dark, BC, Fable, and so on. So we've got great content coming along. Then we've got Xbox Live coming out, so my view at the moment is that if you buy the competition's console, that's great for today, but that's it, really. If you invest in the Xbox, you've not only got that, but also a lot more going forward. You know, a lot of the games aren't using the full Xbox to date. Blinx is using the hard disk, which is great, but there's so much more to come. Now, the new consoles aren't going to be coming out until, at a guess, 2004 or 2005, so if you want to have a console that's growing for the next two years, Xbox is the choice.

Now, our competition is big. They're good, and we have nothing but respect for what they do, but we have to try bigger, better, harder, and smarter than they do. That's what we do every day. Our motto in the office is "nobody said this would be easy," and it's not, but we think we're doing the right things, we're learning along the way, and we're bringing innovation into the market. I think this market loves innovation, although I think sometimes they're a little scared of it as well.

GS: Thanks for your time.