Microsoft's Shane Kim Talks Xbox 360 in 2008

Halo and Gears of War are scaring away casual gamers, says Microsoft

A the DICE Summit, Microsoft Game Studios corporate VP Shame Kim made himself available for a conference session, recorded by Gamasutra, answering many questions surrounding the Xbox business.

One of the biggest blows to Microsoft in 2007 was the loss of Bungie Studios. Kim explained, “People have speculated that we were stifling their creative freedom, but I can tell you there's no studio that had more freedom at Microsoft Game Studios than Bungie. I think, at the heart of it, they wanted to return to their independent roots. At the end of the day, you are talking about human beings here. My personal philosophy? You want to work with people who are happy to work with you.”

Besides Bungie, there were two other development houses to leave from under Microsoft’s umbrella. BioWare was fully acquired by EA earlier this year, and Bizarre Creations is now with Activision. Kim downplayed the snatching those two second party developers and said that it was just the nature of the industry, and that Microsoft still has many great partners on its side.

"We work with a lot of external development partners - Epic has been a tremendous partner for us. It's just the nature of the game,” said Kim. “We do have five great internal studios. I believe in having a great mix, and a great commitment to internal development as well... we can't control other publishers.”

The VP also added that third-party publishers have an incentive to produce content on Xbox 360, due to excellent game sales on the platform. “The vast majority of software sales is going to come from third parties,” Kim noted. “We don't have the dominant share on our own platform - that comes from third parties. And if you look at the results for great third-party platform titles, we're outselling other platforms 2:1, 3:1 and so on.”

2007 was certainly the best year yet in quality games for the Xbox 360. It was so good, in fact, that some believe that Microsoft will be unable to match it for 2008. Although he didn’t make any promises, Kim believes that 2008 will be “very stacked” with quality games, some of which have yet to be announced. Of the titles that have been announced, Kim specifically mentioned Halo Wars, Fable 2 and Alan Wake.

Even with its head start, the Xbox 360 was quickly surpassed in total unit sales by the Nintendo Wii, but Kim says that hardware sales aren’t the only way to measure a platform’s success. “It's easier to focus on console unit sales," he continued. "But if you look at the consumer spending on the current [console] generation, Xbox 360 customers spend 45 percent of next gen spending.”

That’s not to say that Microsoft isn’t looking to replicate some of what Nintendo was able to do with its current generation of hardware – capturing the casual market. Oddly enough, Kim names Halo and Gears of War as barriers to that goal.

“When your flagship titles are Halo and Gears of War, most people naturally attribute a brand of mature-rated hardcore to the Xbox platform. I'm glad we have Halo and Gears of War, but it makes it harder to reach out to some people,” said Kim. “We do have a lot to offer to people and we have to do a better job of letting people know. We're trying to get mass-market with Xbox 360, and the generation has a long way to go.”

Out of the current three major console platform holders, Microsoft is the only one without a portable gaming solution. Will there ever be a portable Xbox? “Never say never,” Kim replied. “Launching a portable device is like launching a Zune, launching another Xbox 360... we have a ways to go [to compete effectively in the music space]... Zune is not just about the device, it's about the service as well.”

For now, it seems that Kim and the rest of Microsoft’s gaming division is focused on making the Xbox 360 the overall victor of the generation. “By no means does anyone at Microsoft think the race is over,” Kim stated. “You have very powerful and formidable contenders in Nintendo and Sony ... to underestimate them and to count them out would be a foolish mistake.”