icrosoft Game Studios announces that they've teamed up with Hironobu Sakaguchi and his company Mistwalker for two exclusive RPGs for the next iteration of the Xbox. But, there's still so many questions! Good thing we get a chance to pose them all to Peter Moore, corporate vice president of worldwide marketing and publishing at Microsoft and learn more about this new deal and what it means for Microsoft not only in the US, but also in Japan and the rest of the world.
Game Informer: First of all, thanks for taking the time to talk to us. You’ve announced some really big news today and we’re really excited about it.
Peter Moore: Yeah, we’re very excited and so is the rest of the world from seeing all these e-mails to me pop up second by second. It’s big news on many levels. Getting “best of breed” developers like Sakaguchi-san is an important story but people are also taking note that this is one of the first concrete moves on Microsoft’s part to talk about our initial strategic plans for the next generation. Combine the two together and it’s certainly caught the attention of the press around the world the past couple of hours.
GI: Just to clear things up, is it just Sakaguchi-san who will be working with Microsoft Game Studios or will it be Mistwalker as a whole?
PM: Well the publishing will be done by Microsoft Game Studios. This is a classic first party publishing deal, if you will. The development funding will be done by us, as well. Mistwalker is a company that Sakaguchi-san founded after he left Square Enix. And it is, if you will, a “joint venture,” and I’ll put quotes around that because we’re not making any sort of financial investment in Mistwalker but is instead bringing Microsoft and Mistwalker together in the Tokyo marketplace and creating and developing both of these newly announced role playing games.
GI: This announcement that you made today basically states that for Sakaguchi-san, he will be exclusively developing role playing games for the next generation Xbox. Is that correct?
PM: Absolutely. There are two titles that he’s working on and they’re brand new role playing games built from the ground up. You know this business very well and you know what that takes to do one, never mind two. He will take the role of executive producer of both of the games, as well as the role of the creator. So from a creative point of view he’s the guy who sits down and builds up the worlds and the characters, starts talking about what the music should sound like, how the storyline should develop, how the characters should develop, and things along those lines. Those are his roles as executive producer and creator. The development work will be a combination of Mistwalker and MGS (Microsoft Game Studios) working together at making sure that what will undoubtedly be a considerable number of folks working at bringing these games to market of which will obviously be years, not months.
GI: Will the exclusivity be for just these two titles, or will it span all of Mistwalker’s RPGs?
PM: Right now it’s just for these two titles. And one of the things that I can tell you is that he’s going to be very busy building two RPGs from the ground up. His company has already made their first foray into next generation work, if you could categorize the DS as such. But no, this is something that we’ve envisioned Sakaguchi-san working on for years and there’s very little room for him to do other things.
GI: Why does Sakaguchi-san interest Microsoft Game Studios?
PM: Well first of all, we’ve not been shy about the mistakes we’ve made in the Japanese market. When I stack up by rank the issues we had since launch that have kept our growth pinned down in that country, content is number one and when you think of content in the Japanese market you think of proprietary role playing games that make that consumer buy your platform over the other guy’s platform. It’s as simple as that. We have not done a great job there (in Japan). The RPGs that we do have, they’ve been cross-platforms RPGs. We’ve seen, for example, the success that Fable has been, and that title has been a hardware mover, there’s no doubt about that whatsoever. But, you could multiply that by five in regards to the impact of a strong RPG in the Japanese and Asian markets. And, we haven’t had it. That’s been a mistake. We had something going with True Fantasy Live Online which ultimately ended up being too ambitious and we unfortunately had to cancel it. But by bringing the combination of well-funded development resources and for many people the godfather of RPGs in Sakaguchi-san together, I think that combination show our very strong commitment to this market. This will be one of the things that quite frankly will determine whether we win or lose in the next generation. It’s going to be a very important part of our success going forward.
GI: As you said, it’s pretty well known that the Xbox is a non-factor in Japan. We’ve been to game stores in Akihabara and seen Dreamcast and Neo-Geo Pocket displays more prominent than those for the Xbox. But, signing up Sakaguchi-san is a step in the right direction. What else do you think you’ll need to do to break a Western console into that market?
PM: I’ll tell you: Japanese content. And, that includes industrial design, content that’s more palatable to the Japanese consumer. It’s a different branding exercise compared to our initial attempts which, quite frankly, were very American. But one thing that we’ve very good at doing at Microsoft is learning from our mistakes and not being afraid to invest in the future. And this is a long term investment in brand-new intellectual property that we intend to leverage for many, many years and will probably take awhile to gain some traction and capture the imaginations of the gamers. But as experience tells me, once you get an RPG that gets a loyal following, you at least have the recipe for success for your console. Without that, it’s very difficult, very difficult to break into the Japanese market.
GI: Do you think breaking into the Japanese market and finding success will be the key to Microsoft winning the next generation console race?
PM: I wouldn’t categorize it as “the key,” but I would say that it’s very important to the overall mix of the strategy that we become a very strong competitor in the Japanese market. The Japanese market, while having struggled in terms of sales for the past five years now, is still very important to us from a strategic point of view. It’s the home of some of the most creative and vital parts of our industry. It’s the cradle of video games, obviously. And from the point of view of the partners that we know work with from Japan, whether it’s Konami or Sega or Capcom or Namco or Bandai, there are still so many more powerful developers and publishers in that marketplace who have now set their horizons to be global players and are having success with the Xbox around the world.
But, they still like to walk out their front doors and walk into Akihabara and see the console that they’re developing for in their own backyard. We haven’t delivered that for them yet, but actions such as today’s announcement and more that you’ll be hearing in the coming months I think will change that. It won’t change it today and it won’t change it tomorrow, and it might not even change next year. But over the long term, and we’ve very committed to the long term, it will gradually feel like the Xbox and the next generations of the Xbox are more woven in to the Japanese video game marketplace as a legitimate system and not as an outside tapping on the window and hoping to be let in.
GI: Has development actually begun on these two titles yet?
PM: Development has begun on both of these titles in varying levels. A lot of proprietary work for both of them started in the fall of last year to the spring of this year. That proprietary work is the development of the storylines, development of the characters, development of the rudimentary game mechanics, development of game length, and hardcore development is actually getting under way as we speak right now.
GI: From all the talk we’ve heard around the industry, signs are pointing at the fact that the next Xbox could be hitting the marketplace this upcoming holiday season. When you foresee these games actually being released?
PM: It’s only when you truly get into pulling all the strings together and figure out things like how ambitious you want the game to be and how deep will it be can you really say when it’s going to come out. We’re not prepared to guess at this point but I will tell you that as we move into this calendar year of 2005, we’ll tell you a lot more about it. It would be cavalier of us to start guessing and making announcements. That’s not what we do.
GI: Is there anything you can actually say about the two games yet?
PM: I can tell you that having seen some of the rudimentary work storyline and characters, both have the capability to be very powerful parts of the RPG global genre, not just the Japanese and Asian part of that business. There will be unique gameplay elements, which you can imagine from Sakaguchi-san. This will not just be a re-hash of what you’ve played for many years in the past. That’s not what we want to do and that’s certainly not what Sakaguchi-san wants to do.
GI: You mentioned earlier that the Xbox has already had some pretty respectable RPGs, with Fable being one of the notable ones. But everything that you’ve said so far seems to really focus on the Japanese market, not the global market. Is this move to work with Sakaguchi-san and Mistwalker more of an attempt to gain a foothold in the Japanese market as opposed to the global one?
PM: If you stacked up our priorities, the Japanese market is paramount in regards to these two projects. But then again I will say that things that resonate well with Japanese gamers have a very good chance to resonate with Asian gamers and certainly with the magnitude of quality that Sakaguchi-san is known for, I think there’s a potential to be successful on a global scale. So, rank them in that order: Japan, Asia, and global. But, it is our intention that these games will be localized for global consumption, but only after they’ve shipped in Japan. So I guess you could say that the answer is yes. It is primarily a move for us to make a stronger statement than we’ve currently made in these Japanese market and we could think of no better partner to do it with.
GI: Given the fact that Microsoft and MGS has already seen some good RPGs come out of developers outside of Japan, do you think there’s some risk in working with Mistwalker. True, Sakaguchi-san is the godfather of the RPG genre, but Mistwalker is still a new company and hasn’t yet created a game for the current batch of consoles.
PM: I’m not worried about that at all. I think you’re certainly right in that we’ve taken care of the genre from the Western side of the world, but we have not done well nor established good proprietary products in the Asian world. The recipe for success in the Japanese market is to have a handful of games that are powerful, relevant to the consumer, pertinent to a gamer’s lifestyle, and are proprietary to your piece of hardware. And, we haven’t done that. And shame on us. When we started building our strategy for what we needed to do better in the next generation approximately a year ago, we determined that a clear investment needed to be made in building not one, but two role playing games built from the ground up, as well as making an investment that might not only span cycles of a title but maybe even generations of a title to build these pieces of intellectual property. We’re going to be very patient in this marketplace and won’t be of the attitude that we’ll do one game and if it works, great, and if doesn’t, walk away from it. That’s not our intention here. And I can think of no better partner to do that with than Sakaguchi-san.
GI: To clarify our question earlier, we’ll use the example of Lionhead. They created a great game in Fable and have a pretty well established track record, as a company, of producing great games.
PM: One of things we’re not afraid of is putting money on a developer that has some level of a track record. I’d say that Peter Molyneux, as well as I know him, had a track record. Fable was something that we believed in from the get go and it took a little longer than we had hoped for to bring to market. But nobody that plays Fable has been disappointed. Sakaguchi-san, from a commercial and a creative point of view, has been one of the most successful developers the industry has ever seen. But, every title that is brand new intellectual property that isn’t an established IP or prequel is always a risk. We’re in the hit and miss business. For every Fable there’s a True Fantasy Live Online that never sees the light of day. Cancellations are the nature of the beast but if you’re going to place bets, you place bets with the best of breed. We are clearly placing a bet, in fact two large bets, but having spent a lot of personal time with Sakaguchi-san, I have nothing but the utmost confidence that both titles will be winners.
GI: This is a bit of simple multiple-choice question for you, but bear with us. Which name do you like better: Xbox Next, Xbox 2, Xbox 360, Xenon, or none of the above?
PM: And you want a real answer from me on that? (laughs) I actually like all of them, I think they all work. You know, names are names and eventually you’re going to hear what we’ll name it. But, I don’t think that it’s critical, I think that the games are going to be critical. So you can call it whatever you like, but if the games aren’t there it’s not going to matter. And, the games are our focus right now. Announcements like this and announcements that you’re going to be hearing in the future are going to be the real meaty stories that you guys write about, instead of whether it’s called Xbox Next or Xbox 2.
GI: How exciting is this for you, being in your position at this point in time? This is a really amazing time for video games with the next generation race just starting. How has it been for you, has it been pretty crazy?
PM: It’s an interesting question because since we came back from the holidays, the level of excitement continues to build here. And a lot of that has to do with the success of the Xbox over the holiday season, not only here in North America but also in Europe. One of the things is that we can all get carried away with what’s coming up down the road, but we also have a very viable business particularly here in North America where we’re going nose to nose and toe to toe with our competitor. There are still around 125 games in the works being developed for the Xbox.
The excitement for me comes in the fact that the company I’m working for has an incredible focus on execution and has the financial resources, which we’ve already proven, as well as the willingness to place bets. As our industry begins to develop it becomes a major entertainment medium. And I think that we certainly rocked the world back on its heels on November 9th when we made the announcement that Halo 2 had driven more dollars in 24 hours than any other entertainment property in history. Hollywood starts to take notice and clearly the Halo phenomenon has reached far and wide outside of our industry. Everybody knew Halo 2 was going to be a spectacular game, but little did they realize what an incredible piece of entertainment property it was going to be as well as just how successful it was going to be getting into that very difficult 18 to 34 male consumer demographic. I think stuff like that has really caught the imagination of broad media. When Halo 2 shipped, it was lead story on many outlets such as ABC, NBC, and CBS affiliates. The excitement is clearly building and I’m happy to be a part of it.