Before Jeremy Hinton became involved with Microsoft’s Xbox console, he initially spent number of years in marketing and business development roles within the interactive entertainment industry. Following that, he spent a number of years as the new release DVD marketing manager at Village Roadshow, where he fondly remembers working on launches for film properties such as The Matrix and The Lord of the Rings. Hinton then moved over to Microsoft, where he spent a year managing the company’s hardware business, such as keyboards and mice. He also helped launched Microsoft’s range of webcams before moving into Microsoft’s interactive entertainment business, where he was introduced to the Xbox side of the company. Looking back, Hinton realises that he has spent more than 15 years in the interactive and filmed entertainment sectors, and he would not have had it any other way.
Microsoft, historically a PC software company, made the unusual move of entering the video game business with the original Xbox in 2001. Were you surprised by Microsoft's decision to not only get involved in the video game business, but also in producing dedicated hardware?
Microsoft group category manager, Jeremy Hinton (JH): At the time, I recall not being that surprised. Microsoft had a history of collaborations when they wanted to learn more about segments that they were considering entering. Before they announced their hardware, they had a collaboration with Monolith Productions, who I was the product manager for the Australian market. Though, I do remember that the market reaction was one of complete scepticism.
Why was that?
JH: No one felt that the maker of Windows and Office could make hardware, let alone compete with two of the “coolest” brands on the planet, namely Nintendo and PlayStation. However, there’s one thing I believe that Microsoft does do very well and that’s iteration. They continue to iterate on all of their products, services and experiences to the point where, before you know it, they’re leading markets and bringing innovation faster and better than their competitors. Then here we are over ten years later, where Xbox is leading the industry on many fronts.
What was your connection to the original Xbox?
JH: Whilst I wasn’t at Microsoft for the launch of the original Xbox, I did have a classification consultancy business which I did in my spare time. Prior to the launch of Xbox, Microsoft didn’t have anyone with these qualifications. So I went into their offices over a number of days and played through all of their launch titles in order to complete their classification assessments and submissions.
What stood out about the Xbox for you at that time?
JH: My highlight was that I was one of the first people in Australia not only to get my hands on the console, but more importantly to play and complete the original Halo. This was offset only slightly by also having to play titles like Blood Wake and Azurik. [Laughs]
Microsoft more or less ended support for the Xbox in most markets around 2006 and 2007. Do you think the platform had a few more years to it like the Xbox 360? Or do you feel it had already achieved all it could have?
JH: I think that the original Xbox was a great starting point for many of the ideas that were taken to another level on Xbox 360. Due to the fact that Xbox 360 had backwards compatibility, I think a software market could still exist for some time. It’s always a difficult thing with transitions, as you want to extend it as long as you can whilst there is money to be made, but not negatively impact the take up of your new device. In hindsight, Xbox 360 is now well over double what we shipped on the original Xbox, so maybe a short transition was the best thing for the new device.
The Internet was still in its infancy in those days and broadband was not widely available in Australia. How were those initial years for Xbox Live?
JH: I’d describe those early years as very exciting, actually. There was a core group of people who knew that this, playing a game on your big screen TV and chatting with friends from all around the world, was the future. The majority of people were there for just Halo, and on a big month you may have had approximately 8000 Australians playing online. Now that number is now north of 250,000 people playing just Halo every single month in Australia, and the global members are over 37 million. There is also the fact that we’re delivering Foxtel over that same service. Who would have thought it back then?
The Xbox 360 launched in Australia in 2005. What do you remember from the local Xbox 360 launch?
JH: The most memorable thing for Microsoft staff at the launch was our world record holding water balloon fight on Coogee beach. It was memorable in that it was such a unique event, the setting was great, and it felt like a community of Xbox fans coming together to celebrate in a way that not many other communities do. The water balloon fight itself was somewhat of a blur, though. Just total chaos. [Laughs]
With the Xbox 360 in particular, Microsoft really went out of its way to secure game exclusives, such as Splinter Cell: Conviction. DLC for games such as Grand Theft Auto IV have also come out first on the Xbox 360. Why the push for exclusives?
JH: Through the work of Microsoft Game Studios, our intent is to always produce new, innovative and industry leading exclusive content. Also, I think the economics of exclusive third party titles have become more difficult over time, as development budgets have increased and there is too much opportunity forgone in launching on just one platform from a publisher perspective.
What’s the attraction for publishers to focus on the Xbox 360?
JH: By working with third party publishers from a marketing perspective and also on exclusive Xbox Live content, the publisher is still able to realise the opportunity across all platforms, but we can still deliver a differentiated and better experience for our customers. We also now work more on bringing exclusive experiences to our service, such as all of our entertainment app partners, because we realise that consumers don’t just look to games consoles for gaming only anymore.
While the original Xbox was overtaken by Sony's PlayStation 2, the Xbox 360 has been consistently been outselling the PlayStation 3 globally. Except for Japan, that is. What do you think enabled the Xbox 360 to enjoy such a high level of success?
JH: To be fair, there are different regions globally where both platforms enjoy comparable success. We are, however, extremely pleased with how well the Xbox 360 has been received this generation both globally and in Australia. I think early on, Xbox had some great exclusives which brought people to the platform. Then the platform itself is inherently more social than other platforms, as it’s easy to get online, find your friends, play together & communicate. Then we continued to innovate on the platform, first introducing Kinect, and then adding a number of entertainment providers. So each step along the way we’ve been able to give more consumers a new and different reason to buy an Xbox 360 that maybe didn’t exist only six months ago.
What in particular did Australian consumers like about the Xbox 360?
JH: Definitely the Xbox Live service. Local consumers love connecting, playing and communicating online. They also love the way we’ve pushed forward digital distribution with things like Xbox Live Arcade, which is tremendously popular here. We also saw a huge influx of purchases around our Kinect launch, so obviously that resonated locally. Lastly, and most importantly, I think from day one the games have been amazing and only continue to get better.
Despite the lower hardware specifications of the Nintendo Wii, Nintendo's console went on to be the top selling console of this generation. Were you surprised that consumers went this direction?
JH: I think it shows that hardware on its own counts for nothing without innovative gameplay experiences. This is what Nintendo has always excelled at. I wasn’t surprised that it was successful, but I was surprised at how well it pulled people into the gaming segment that had never owned a console previously.
However, hardware and software sales of the Wii have stalled in the last year or two. What do you feel was the cause of it?
JH: The Wii software wasn’t that varied, and regular and firmware feature updates were non-existent. So we saw consumers either upgrade to an Xbox 360 or PlayStation 3, or simply stopped playing. The challenge with the Wii U is how to convince those consumers that have stopped playing their Wiis that this one will be different.
Sony has already thrown its gauntlet down in the handheld gaming space with the PlayStation Portable and the Vita. Is Microsoft keen to make lightning strike twice and launch a dedicated Xbox handheld at some point?
JH: Our perspective has always been that consumers don’t want to carry two devices in the portable gaming space. Hence our focus for gaming on the go is our Windows Phone platform, and shortly, our Windows 8 tablet devices. Our preference is not on the expense of dedicated hardware, but on enabling the Xbox ecosystem across devices that consumers already own. You see this in our announcement on Xbox SmartGlass, where consumers can use any popular device that they have in a companion style experience.
What do you feel stands out about SmartGlass?
JH: It’s great in the home as an adjunct to your console experience. However, you can then take that device on the go but your experiences stay within the Xbox ecosystem. Typically this would consist of adding to your Gamerscore, progressing some Xbox games, or as we recently demonstrated, asynchronous gameplay between Windows Phone 8 and Windows 8.
One of the key hardware innovations by Microsoft has been the Kinect add-on. How has it fared in the Australian market?
JH: Australia is one of the best performing markets in the world for Kinect. To me that’s not a surprise as it’s due to similar reasons that the Wii was also successful here. Australians generally are a more social gamer than markets like the U.S. So they like to get together in the same living room and either play together or competitively. Now that we have voice command and voice search enabled in this market, we’re also seeing increased usage of this feature in an entertainment environment, as people use it for things like Foxtel, ABC iView or other entertainment apps.
With the release of the slim version of the Xbox 360, the face plate feature was removed. Out of curiosity, how did the popularity of the Xbox 360 face plate fare in Australia?
JH: I think by the fact that we haven’t sold a faceplate in this market for probably five years, and that we’ve removed the feature, speaks volumes for how popular the feature was. [Laughs] Whilst some consumers loved the feature and collected entire sets of faceplates, the majority of consumers didn’t feel the need to.
Based on the way the gaming market is progressing now, is the Xbox 360 well positioned for the second half of its ten year lifecycle?
JH: Having been in the gaming segment for 15 years, I’m constantly amazed at the sales curve of the Xbox 360. It’s the only console ever to increase its sales year over year for the period that it has been available. Even through calendar year 2012, Xbox continues to be the only console showing unit growth over the previous year, which is over six years past its original launch date.
What has enabled the Xbox 360 to maintain consumer interest even after all this time?
JH: I think the key element of it already having such a successful life is that it continues to reinvent itself, whether it is through hardware, experiences, content and services. The biggest shift that I’ve seen is that with broadband connectivity you can constantly add new features and services without having to ship new hardware. That hasn’t been possible in past generations, and that’s why this generation is already lasting so long and will continue for some time yet.
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