New Game: Head of Microsoft’s Games Division Outlines Company’s Strategy for PC and Console Games

LOS ANGELES, May 10, 2000 — Talk about beginning life at the top. When Microsoft expanded its former Games Group into its own corporate division in March, it already had a stable of top developers and top-selling PC video games and peripheral game controllers. It also passed along development of Xbox, Microsoft’s first video game console. Although its release is still 1-1/2 years away, Xbox was selected recently by gamers over all of the top consoles currently available or planned for market, according to a recent poll by Fairfield Research.

On the eve of this week’s Electronic Entertainment Expo (E3) in Los Angeles, Robbie Bach, the recently named senior vice president of the Games Division, talked with PressPass about Microsoft’s growing presence and popularity in the gaming world. He offered an overview of the new games and devices that Microsoft will showcase at E3 and a sneak preview of what to expect next year. He also discussed the growing popularity of online gaming and how Microsoft expects to duplicate its success in PC games with Xbox.

PressPass: What vision does Microsoft have for its Games Division, and how important is gaming to Microsoft?

Bach: PC and home-console games are very big markets. Games represent about half the PC consumer software sold. Sales of games for consoles topped box-office receipts for movies in the United States last year. A significant percentage of the time people spend interacting with technology in their homes involves video games. It’s very important that Microsoft play a leadership role in this area.

Our vision is to provide the best gaming experience for consumers in all formats. Microsoft is already a leader in PC gaming. We expect Xbox — the most powerful, realistic console ever available –to make us a leader in the home-console market when it is released in fall 2001.

PressPass : How important is E3 to Microsoft’s Games Division? What message do you want gaming enthusiasts and the industry to get about Microsoft at E3?

Bach : E3 is the opportunity for us to show off our upcoming titles and get people excited about the work we do, particularly people within the industry and members of the media. We also use it to meet with our channel partners, who sell our products and create marketing plans, product priorities and forecasts. It is a very important milestone in the annual development of our games plan.

Microsoft has several messages for the gaming community at E3 this year. First, our PC games portfolio continues to get better and better, and we are driving toward being the leader in that marketplace. We will have a broad line of products this year and many should receive critical acclaim. Second, we are launching new games hardware: SideWinder Strategic Commander, GameVoice, and a new line of joysticks. These will keep us in a leadership position in the PC-peripherals business. That is a big deal in the gaming community because serious gamers use many different peripherals. The final message revolves around Xbox. We want to demonstrate our commitment to the console business — and to Xbox in particular — by showing how cool an opportunity it will provide gamers.

PressPass : Tell me about Microsoft’s PC games. Can you describe some of the hot titles?

Bach : The big news this year is the breadth of the lineup. In the past, we have led the market with Flight Simulator and Age of Empires. Those titles will continue to sell well this year, as should a new expansion of Age of Empires II called The Conquerors. But we will also have several other exciting games on the market. These include the second version of Combat Flight Simulator. It is set in the WWII Pacific theatre and lets gamers experience the emotion and challenge of aerial combat and landing a plane on an aircraft carrier in the middle of the Pacific Ocean.

In addition, we have several products from companies Microsoft acquired in the past two years. There is a new version of Links, the No. 1 video-golf game in the world. LinksLS 2001 allows players to design their own course, and it features new scenery and art. It is the most realistic golf experience you can imagine. Also, we will have a new version of MechWarrior, the popular game that allows players to control massive fighting machines. This version, developed internally at Microsoft, includes seven new
and the player is a commander instead of a grunt officer. It is a fabulous product. We will also ship Crimson Skies, a new product from the same Microsoft development group that created the new MechWarrior game. It is like Indiana Jones meets the Red Baron. It was the No. 1 reviewed game at Microsoft’s Gamestock press preview.

In new gaming hardware, Microsoft has GameVoice, a communication and control devise that allows players to interact with other players over the Internet while they are playing games. They can also use it to enable voice commands in games.

PressPass: Can you give us a sneak preview of the games that Microsoft will release in 2001?

Bach : There is MechCommander, a strategy game based on MechWarrior. Since purchasing the MechWarrior franchise, we have focused on taking it in new directions and making it even better. Another highlight is Dungeon Siege, an action role-playing game by Chris Taylor, who created Total Annihilation, one of the best real-time strategy games of recent years. Microsoft will also release FreeLancer, a game by Chris Roberts, founder of Digital Anvil and creator of the space-combat game Wing Commander. Like Chris Taylor, Roberts brought his work to Microsoft. FreeLancer won Best of Show at E3 last year. We think it is going to be one of the best-selling games of all time when it arrives in stores in the next 12 months.

PressPass: is another of Microsoft’s ventures in gaming. There’s talk in the industry that online gaming is the wave of the future. How does Microsoft plan to make online gaming profitable?

Bach : The big success of the Zone has been its ability to attract gamers. We now have 14 million registered users. It takes about a month to add another million. We are able to generate revenue from that, primarily through sponsorship of online events. First USA Wingspan, a bank credit-card agency, sponsors the Virtual Golf Association, an online version of the PGA tour. There’s coverage from Golf Digest magazine, tournaments and a $100,000 prize for first place. It’s a great sponsorship for First USA and a great revenue source for us.

Toyota sponsors a new game on the Zone. It is called Tacoma Adrenaline, after one of Toyota’s trucks. It is one of the top three games on the Zone.

PressPass: What is the appeal of online games?

Bach : The biggest appeal of online games is the sense of community. The Zone has an added advantage: a group of people who help build an even stronger and more exciting community. They create hundreds of tournaments every week and opportunities for chats, discussions and meetings with game developers.

This is why Sidewinder GameVoice, one of the devices Microsoft will preview at E3, is so important. It will foster more community by allowing people to talk to other gamers instead of typing messages. As Web cameras become more popular, you will see video integrated. That is what makes the Zone so exciting. You are not just playing against yourself; you can play games against other people. Soon, those people will have a voice and a face.

PressPass: What are the implications of technology bringing people together in new ways such as this?

Bach: People are realizing there are different ways to communicate and interact. It can make the world a little bit smaller and communities a lot more interesting. Since the community on the Zone is worldwide, it includes people from every walk of life and lots of different age groups. It is a very broad mix of people. That is very exciting.

PressPass : Gaming enthusiasts appear anxious for the release of Xbox. Why is Microsoft building a traditional video game machine?

Bach: It comes back to Microsoft founder Bill Gates and President and CEO Steve Ballmer’s vision of technology any time, any place, and on any device. The PC continues to do exceptionally well in the home, and our PC games business will continue to grow. But the PC attracts certain types of users to certain types of games that are played mostly behind a desk. It is primarily a single-user experience. People don’t crowd around to watch others play.

Xbox brings Microsoft into the living room and den, where people are 10 or 15 feet from the television and there are two or three people playing a game at one time. That is a very vibrant market, and Microsoft wants to become a leader in this market.

PressPass : What does this say about Microsoft’s commitment to PC gaming?

Bach: Xbox doesn’t change our commitment to PC games. Our goal is still to be the No. 1 game publisher on the PC. We think our PC games business will grow and expand because Xbox will incorporate innovations that take place on the PC.

PressPass: What are the advantages of Xbox versus Microsoft PC games? When should a gamer use one or the other?

Bach: They don’t compete with each other. It depends on the experience you want and the type of games you are interested in. That will determine whether you want to play on Xbox or a PC. On PCs, you find simulation and strategy games that use a keyboard and a mouse. They are either online, multiplayer or single-user games. Most players are between the ages of 18 and 40, which is older than console gamers. On consoles, the games tend to be more about action, adventure and sports. They tend to feature two or three people who play against each other in the same room at the same time. Most homes have both a PC and a console. They don’t choose one or the other.

PressPass : What is Microsoft doing to ensure it creates popular games for Xbox? How will these games differ from games available for other video game machines?

Bach: We constantly look for people who are excited about Xbox and who know how to produce great console games. We focus our game developers on producing great Xbox games, in addition to those they are already creating for the PC. We also look for the best people in the development community outside Microsoft. But Xbox is so compelling that we have no shortage of people who want to create games for it.

We have designed every component of Xbox to be a substantial step up from other consoles coming to market. We have given developers the raw horsepower to produce stunning graphics, integrated audio, and exciting online and multiplayer games. We think the combination of those things is going to allow developers to make better games faster.

PressPass: What kind of momentum can fans expect from Microsoft leading up to the release of Xbox next year?

Bach: People should expect steady momentum that, hopefully, will lead to an exciting launch next fall. We are still 1-1/2 years away from shipping the product, yet we have more interest than we can manage. What we are trying to do is build interest more steadily. We will announce things periodically. Our focus will be to ensure the core gaming community gets the information first. They will get early information about our portfolio of products, previews of early demos, and online chats with the development team.

PressPass: How will Xbox enable developers to create better games faster?

Bach: Xbox’s inner design is much like a PC. Unlike other video game consoles, it includes an Intel instruction set, hard disk, video graphics chip and other features game designers already know. It also has 64 megabytes of memory — twice what any other console offers. This power and the familiar features eliminate the traditional learning curve for game developers on new consoles. They can start developing games for Xbox today on a PC. We think that’s going to enable us to produce fabulous games before Xbox hits stores.

PressPass: How much support has Microsoft lined up for Xbox?

Bach: Every major gaming company in the industry has expressed interest in Xbox. The list includes everybody you’d expect — from Electronic Arts to Midway to Konami to Namco. Microsoft is working to establish formal development relationships with each of these companies. We will announce these arrangements as we complete them over the next few months.

PressPass: How will Xbox help to expand the video game console business?

Bach: We think Xbox will bring a new generation of people to consoles. Xbox’s PC-like design and the breadth of Microsoft’s development community will allow us to offer games that appeal to a broader audience.

PressPass: How is the new Games Division structured? How will this structure help advance the PC and games business at Microsoft?

Bach: We have six teams or groups. One team is responsible for producing the operating system’s library and the developer kits and overseeing developer support and certification. It produces the online infrastructure for what we are doing. The second group is responsible for producing the hardware itself. That includes the game console and the peripheral devices that go with it. These people work with Nvidia, Intel and our development partners. The third group is responsible for producing Microsoft’s brand-name game titles. That group continues to produce all of our PC games as well. A fourth group does the marketing for our games products. The fifth group is responsible for negotiating many of our contracts, looking at new business opportunities and managing our business partnerships and relationships. Finally, there’s an operations group. It is responsible for getting manufactured product to the stores.

PressPass: How fast is the PC games business growing, and how about the online gaming business?

Bach: The PC gaming business has grown steadily for 20 years. Every year it grows between 10 percent and 25 percent, based on PC growth, how fast PCs are selling and new titles that come out that year. Growth was about 10 percent last year and a little higher the previous year. Microsoft has doubled its share of the PC games market over the past two or three years, with 20 percent or 30 percent growth each year. We expect to maintain steady growth, depending on the popularity of new software and changes in hardware.

New Microsoft games featured this week at the Electric Entertainment Expo in Los Angeles include:

  • Combat Flight Simulator II: The second in the best-selling CFS series puts players in the fiercest World War II air battles of the Pacific theater. Players fly American Corsairs and Wildcats, and Japanese Zero and George planes, and receive advice from former U.S. and Japanese pilots. Release date: Holiday season 2000.

  • MechWarrior 4: Players can command more than 20 80-ton war machines — including seven new machines with customizable weapons, armor and sensors — in tundra forests and arctic worlds. For the first time in the game’s history, the player isn’t a grunt private, rather a commanding hero in the center of a complex story of betrayal, revenge and honor. Release date: Early 2001.

  • Crimson Skies: Set in a fictional 1937, this new game lets players become Nathan Zachary, a dashing air pirate who always gets the girl. The game, conceived by Jordan Weisman, creator of BattleTech and MechWarrior, includes 24 missions and 12 specially fitted fighting planes. Release date: September 2000.

  • Age of Empires II: The Conquerors: This expansion of the best-selling Age of Empires II: The Age of Kings provides more content and a new historical setting, including new civilizations such as the Aztecs, Huns and Mayans. Release date: September 2000.

  • LinksLS 2001: Players can create and play their favorite course with this upgraded game’s Arnold Palmer Course Architect program. They also can compete online for money in the Virtual Golf Association Tour against other PC golfers. Release date: Fall 2000.

  • Motocross Madness 2000: The sequel to 1998’s Racing Game of the Year offers new stunts, tracks and daily player rankings on Microsoft’s online game site, Among the options: races in the Costa Rican jungle or the Bank One Arena in Phoenix, Ariz. Release date: June 2000.

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