BILL GATES WANTS TO KEEP SONY ON EDGE
Microsoft Chairman Bill Gates (right) is confident in his company's chances against Sony in the next-gen console war. Gates believes the real battle will be in the online space. He also discusses HD DVD, Halo 3 and sales of Xbox 360 over the next year.
During last week's CES, popular tech website/blog Engadget had the opportunity to interview Microsoft Chairman Bill Gates about all things Microsoft, including the Xbox 360 of course. Gates talked about sales targets, HD DVD, Halo 3, and the battle against Sony, among other things.
Halo 3, when it's ready
Although others in the Microsoft camp had already refuted the notion that Bungie would have Halo 3 ready to meet the PlayStation 3's launch head-on (Gates had hinted they would in a prior Time article), Gates clearly indicated that he doesn't know when the game will ship. "I have to make sure that any speculation I did about that is -- it's up to the team when they want to ship that, and they're going to take their time to make that a super great product. So even we don't know when that will come out. That's one of many games that are just phenomenal that are in the works, but it's up to the artists to do it when they feel good about it," he said.
Next holiday could be huge
While some analysts have estimated that 10 million Xbox 360 units will have been sold by the end of this year, Gates did not reveal any new sales targets. He is (naturally) quite optimistic about 2006, though.
["We've got a lot of things that they don't know that we're doing, so we'll keep them on edge a bit," Gates on Sony]
"The only number we've given publicly is that for the end of June it'll be 4.5 million to 5.5 million. Then after June, of course, we'll get into another holiday season and that should be a very big deal because that will be a holiday season with a pretty unbelievable number of titles. We had about 18 at launch, we'll have 50 by the middle of the year, so as we get into the second half of next year we'll go up above 50 there as people learn how to take advantage of the graphics capabilities that much more, bring that much more depth to it. We'll have poker coming out in the first half of the year, a lot of people excited about that; we'll have new peripherals that we've talked about, the camera will come up; as well some of the connections to the PC on the communication side so you can text message between PC and Xbox. We'll get some of those things in place.
"So there's a lot of things that will make it an even more attractive product and we'll be able to meet all the demand that's out there. So this will be a big holiday season. We planned Xbox 360 from the beginning as a multi-year cycle, making sure there were no periods of time where there weren't neat new announcements, peripherals, games and those things, and so that's worked well for us. We'll go into a lot of new countries over the next year, we're already in a lot, but we're adding a ton of countries we never went into with the first generation."
Regarding the newly announced HD DVD drive for the 360, some in the industry expressed concern that it might fragment the user base, but Gates doesn't see that as a problem at all. "There's no fragmentation here. The developers are creating games that run on the DVD-9 format that's in every Xbox, and whatever we do with the drive, they'll all be upwards compatible with that. So that's how the games are written and it's a very clear message that lets game developers get huge volumes and payback for the big investments that they make."
He also reiterated his stance that all media will be online soon, so the format war won't be of much consequence ultimately. "In terms of movies, I often say that this is the last format battle there will ever be, because everything is going to go online -- you're going to download it. In fact, one of my favorite features on Xbox Live is where you can go and get the HD demos of the games or get HD videos like the making of the Xbox, the making of Titanic, they've got this Mission Impossible 3 thing. It's really cool when you're set up with an HD display, the fact that you can just click and it either streams or downloads, that's very nice."
As for Sony, Gates believes the real battle comes down to software and online; of course, it makes sense for him to say that since those are Microsoft's strengths. "We've got a lot of things that they don't know that we're doing, so we'll keep them on edge a bit. We think that this whole thing has become very software centric; that is, the toolkits that let developers do their best creative work -- that plays to our software strength, as well as the idea of Live, where we had to learn a lot with Xbox 1, and the decision to require broadband, to go with VoIP, but we learned a lot about wanting to put things into the operating system so you can chat even while you're playing the games, it's really a level of richness that the games are built on top of that we didn't have that last time. We learned how to do that, we learned about contests and spectators, and so this is really a second generation of Live for us. It's very based on software expertise, so it will be interesting to see what Sony does in that dimension.
"We also now have a situation where if your friend has already bought an Xbox and you go to buy something that you want to play with them, it's not like last time where at his house you play his game and at your house you play your game. Now it's all online, you've got your achievements and things, so it will be a fascinating competition."
Gates added that he believes the market is bound to grow, with more units from MS and Sony being purchased in general. Although he stopped short of predicting outright victory, he said, "Well, you know, we're already successful. I mean, we're the hottest product there was at Christmas this year. I don't think there's any doubt we'll have a substantially higher share in this generation than we had last generation."