Remarks by Steve Ballmer, Chief Executive Officer
October 7, 2010
STEVE BALLMER: Thanks. Thanks, everybody, for taking the time today. We’re excited to greet you and have a chance to share some news about our partnership with Canal Plus, which we’re very excited about, and also to have a chance to further share with you some of the work that we’re doing with Xbox, which I’m particularly excited about, I’ll say. I think we have coming this year some of the most exciting and kind of revolutionary technology for improving the family entertainment experience that I think we can ever imagine.
You know, I think back 10 years ago when we started down the Xbox path, we started and said, look, we’ve got to be very good at videogames, and videogames is a very important, big market. Over that time, we’ve sold over 42 million Xboxes around the world. We sell hundreds of thousands each year here in France. And yet we continue to find ways to bring in more households, a broader segment of the household, female and male; new ways to interact, because I think in general whether it’s the remote control or the game controller, people still struggle to a degree to participate and be involved in the experience.
And so with the launch of Kinect and with the broadening out of experiences on the Xbox, based upon the kind of partnership that we’re talking about today with Canal Plus, I think you’ll see a real broadening out of the demographic, and we’ll really think about the Xbox as a family entertainment, TV entertainment center as we go forward.
Kinect will launch in November. You’ll be able to buy it in stores here in France in early November, November 10th.
We have had a chance to show it in a few places. We’re going to do a little bit more demonstration of some of the technology and some of the games today. But so far the visceral response from people is really quite amazing to have such a powerful sensor technology, recognizing your voice and taking action, recognizing your body, and as we say, letting you be, if you will, the controller.
We’re going to show you a little bit of that today, and then we’ll talk a little bit about what it means to bring the full Canal Plus content to the Xbox, and to put it under the control of something like the Xbox.
So, with no further ado, we’re going to do a little bit of a demonstration. So, where is? We’ll let the guys take over.
PARTICIPANT: Thank you.
(Demonstration not translated.)
STEVE BALLMER: I have to say we, of course, have a Kinect in our house, and these guys jump better than I do, so I’m glad they did the demonstration here today.
You think about the kind of roots of the videogame, you get one kind of entertainment. You think about what we just showed you, which is just this one game, you’ll see a discussion and certainly sports games, dance games, fitness games — or games — entertainment.
Then you start to say, well, okay, what if we bring the TV to this experience? And we have a partnership that we’ve been working on with Canal Plus. We have football matches on the Xbox today, but you can think about navigating through content, you can think about browsing, you can think about using your voice to navigate the EPG, and, of course, we saw a game that was being played all in this room, but you can be enjoying these experiences with friends across the Internet. The two of these guys don’t even need to be in the same room in order to be, for example, in the same boat.
As we get later on this month and next, we’ll formally unveil and start to demonstrate a broader partnership with Canal Plus that Bertrand is going to have a chance to talk about. So, I want to invite him onstage. I’m particularly excited as we take a look at the full possibilities of all of the content on-demand and live from Canal Plus. So, please join me in welcoming Bertrand to the stage. (Applause.)
BERTRAND: (Remarks not translated.)
STEVE BALLMER: I’m particularly keen, because what we’re doing with Canal Plus particularly is we bring live TV to the Xbox, and give you the ability essentially to use the Xbox as the set-top, as also the family entertainment center, to use the navigation capabilities of the Xbox, and the social nature of Xbox LIVE to participate in full live TV social experiences with friends around — literally around the world, as we were talking about today, I think is going to be a very, very powerful thing.
We’re very excited about Kinect. I have to say we — I think it’s really quite remarkable. And I think the nature of the things that software developers will build and innovate and create we’ve really only started to scratch the surface.
As we think about the future of user interface to all devices, the notion of having the machines understand you, your actions, your behavior, your gestures, your writing, your voice, those natural interface techniques, they’re going to be very important across the gamut, from the family entertainment and TV, all the way through to important industrial applications.
So, we certainly invite you to try today the Kinect, and I think we have time for questions, of course, and again many thanks for coming today.
And I didn’t ask what the protocol was. Yeah?
(Break for direction.)
QUESTION (Through translator): In which other countries can we expect to see similar deals?
STEVE BALLMER: Well, we’ve done some work in the U.K., for example, with Sky. Some of that work is available, although we’ve gone really quite full-fledged in terms of the content and et cetera that’s available.
And it really is kind of I’ll say a country by country type of issue, and depends upon the structure of the media and the TV industry and rights. It’s complex, but Canal Plus has a very unique position here in France, which allows us to do a very unique partnership. So, we’re excited about that, but look forward to bringing similar capabilities to the Xbox in other countries.
QUESTION: How many games will be available for the launch of the Kinect?
STEVE BALLMER: Depends on how you count them, yeah, 15, but some of them have sort of multiple experiences. We showed you one aspect of River Rafting. My kids would tell you there are 15 games that are variants on the river rafting theme, but when we say 15 games, there’s also other games under that umbrella or under that genre. So, I think people will feel like there is literally dozens of different kind of entertainment experiences, and then when you add in the kinds of things that we’re doing with Canal Plus, you see things accelerating quite a bit over time.
At our own house I brought the first beta version of the Kinect home, and we had the River Raft game, and a couple that are like it, and the kids and my wife and I were doing — and I can’t do the jumping, but there’s one where you get to just duck and move side to side. But over the last even month the number of games, the quality of games continues to rise, because we now have units that software developers can take advantage of.
It does require — many games you can develop or so much software you can develop in a simulated mode. This is one where you really need the physical hardware in order to make something happen.
QUESTION: Is there a monetization opportunity for Microsoft, other than just for selling more Xboxes out of this? (Off mike).
STEVE BALLMER: Well, yeah, obviously we’d love to sell more Xboxes, we’d love to sell more Xbox LIVE, because some of these scenarios are permitted by the subscription service.
We sell the sensor, the Kinect sensor gets sold separately from the Xbox. You don’t have to buy both, although we’ll create bundles also that people can buy of Xbox plus the Kinect sensor itself.
QUESTION: On the services side this does not lead to potential sales? (Off mike)
STEVE BALLMER: I think — you know, we have 25 million subscribers on Xbox LIVE out of a total of 43 million users. If we can dial up the number of users and the percentage of subscribers and the number of people who buy a sensor, I’m pretty — I’m enthusiastic, let me just put it that way. As a shareholder I’m enthusiastic, not just as a user.
QUESTION: When was your demonstration of the (off mike) movement stuff? (Off mike)
STEVE BALLMER: Certainly by November 10th when we ship them through, when you’re able to buy one at the local store. But it happens to be the way our family uses the Zune video store, we do everything by voice in our family for that. So, you’ll see it as — as we get closer to time.
One of the nice things is because we have a live service, we can tune the ability of the system to respond to voice and gestures. We’re getting smarter all the time. Kind of one of the magic of let’s call it the cloud approach, we don’t have to build one technology that recognizes voice the same way for the next — for the next few years; we get smarter the more voices we hear, again with appropriate privacy and all of that ensured. So, you’ll see it when our guys are ready to do the unveil there.
QUESTION: And in a few days from now you will also be launching another very strategic product from Microsoft in the mobile (inaudible). So, what are your expectations in that regard?
STEVE BALLMER: My expectations are we launch a very exciting line of phones. The new Windows Phone I think will — I think they’re beautiful. The hardware, the software is wonderful, the consistency of the brand and the user experience, the consistency of the app marketplace. We’ve taken a whole different approach to the user experience than let me say the other guys in the market. I think it’s, for a lot of people that it will prove to be kind of more productive and more fun, but I’m excited about it. The key is to put devices into users’ hands. That will happen here in France within the course of the next few weeks. France will be one of the first launch countries for the Windows Phones. And we’ll see what the consumer thinks.
QUESTION: Do you intend to use the Kinect with Windows?
STEVE BALLMER: Do we plan on using — certainly these technologies will be used in all — at some point in different ways with all three screens. Initially we’ll launch the Kinect with the Xbox. But we do have certainly people in our labs who are experimenting with what I would call appropriate applications for various environments?
This sensor, as you will know when you get your hands on one, it actually works very well if you’re about three feet away to about 10 or 15 feet away — one meter to about four or five meters. And if you get too close it encourages you to get a little further back, and if you get too far away — and, of course, the technology will continue to improve, but if you think about at least many PC environments where you’re sitting less than two feet away, this particular technology would need to continue to evolve.
Now, there are plenty of places where the PC might be doing work on your behalf but you’re not sitting next to the PC, and we have a lot of work we’re doing to pioneer some of those applications.
QUESTION: You talked about applying this technology to a lot of different fields, from the mobile phone all the way up to the industrial applications you mentioned earlier. It’s a very broad range of markets. What do you see as job No. 1 for Microsoft these days among all of those?
STEVE BALLMER: For Microsoft or for Kinect? For Kinect it’s the Xbox —
QUESTION: For Microsoft.
STEVE BALLMER: — the family entertainment scenario.
QUESTION: For Microsoft.
STEVE BALLMER: Microsoft is a company that — you know, in a sense I would say we have six different things we’re trying to get done as a company. It’s not the 52 that some people think, and it’s not the three that some of our — or one or two that some of our competitors are after. We’re trying to do great software and experiences for phone, for PC, and for TV, which is really what the Xbox is. It’s broader than just gaming. We’re certainly engaged in search with our Bing search engine; that’s very important to us. We provide tools at work and at home for people to be productive, Office and the like. And then we build platforms that are really enterprise specific and software developer specific for people to build applications and deploy them whether it’s in the cloud or the enterprise datacenter. So, that’s six, it isn’t 10, but it’s not two or three.
Now, we have some competitors that are trying to participate as broadly. Google would probably be the most obvious of the broad competitors. We have competitors like Oracle and Apple and VMware who are also good competitors, but they would compete more narrowly.
QUESTION: Why did you choose the name Kinect for the product? Because people say that you have such a great name for the — when it was still a project.
STEVE BALLMER: And what’s the codename? I don’t even remember.
STEVE BALLMER: I forgot even. (Laughter.)
Good question. I actually didn’t personally micromanage the naming experts. I think there were — people do a lot of research on these kinds of issues, and then often fall back in love with the codename, because it’s the one they recognize. I think Kinect is a great name, because at least in the English language it does connote the notion of feeling together with the thing, and at the same time the word means nothing in any language if you just literally read it. That’s often an advantage to mean nothing and let the product build the meaning. So, we’ll see how consumers respond.
Thank you guys all very much. It’s been my pleasure to be here.