Microsoft India was expected to announce its Xbox One launch plans in April, but since that didn’t happen, we got in touch with Anshu Mor, director of the company’s Interactive Entertainment Business, to find out what’s causing the delay.
The good news – the Xbox One is still set for a September release, with an exact date and other launch details to be announced very soon. We also spoke with Mor about Kinect voice support in India, entertainment content on Xbox Live, Xbox One marketing plans, and most importantly, pricing.
Note: This interview was conducted before Microsoft announced the Kinect-less Xbox One. Microsoft India has refused to comment on this new SKU other than the fact that it will arrive in India when the Xbox One launches here in September.
We want to make a comprehensive announcement. We intend to come with a date, a price, features, bundles – all the information required for the launch – together.
We were expecting a release date announcement in April, but since that didn’t happen, can you tell us the Xbox One release date for India?
Xbox One launches in September. We don’t have a date to announce yet. We intend to announce that soon, but September stays.
So when can we expect that announcement to come?
We’re trying to do it as fast as possible. I know we’ve said that we would come back with more information in April. That got delayed a bit, but now we’re trying to quickly fix a date when we can make the announcement. We want to make a comprehensive announcement, rather than just say, ‘Here is the date’. We intend to come with a date, a price, features, bundles – all the information required for the launch – together.
So how far are we from that announcement?
Very close. You guys [media] will get to know first because we will send you the invites for that.
So there will be an event where you’ll make the announcements?
Yes, we intend to do an event. We want to showcase what is landing in the country. Not many people have seen the Xbox One. They may have seen the videos, but we want people to get a first-hand experience. So we’re planning something like that.
Are you planning to have bundles at launch or are you planning to just have the console SKU?
All of that is open right now. There are couple of details we’re closing, and this is what’s causing the so-called delay in making the announcement.
Do you have clarity on what Xbox One game prices will be like in India?
I would put it in the ballpark of where PlayStation [4] is. Maybe give or take a few hundred Rupees here or there, but it will be a similar price, given that both of us go through the same duty structure.
We have a very clear content strategy, which is to have the right balance of international content and local entertainment, which has been our big focus over the past few months.
Sony has had some issues with PS4 delays because of the BIS certification that it had to go through. Is that something that could potentially affect the Xbox One?
No, we don’t see that as an issue. To be fair to Sony, there were certain timelines for getting the BIS certification in and I think their launch and those timelines collided, but for us, I don’t see that as an issue.
The Xbox One launch will happen just before Diwali and around the time when big games like FIFA 15 and Batman: Arkham Knight will release, but will you also be working with third-parties to ensure that all of the Xbox One games that have released over the past year – like Thief and Watch Dogs – will be available in India at launch?
Yes, it’s a great time for us to be launching. There are lots of great new games launching September onwards once the season kicks in. So we will have a far better portfolio at the time of launch than what the wave one markets had. And it becomes part of our standard execution to ensure that the top third party titles are here. We are also trying to ensure that all the content that we intend to bring into the country on the entertainment side is ready when we land the console in the market.
In terms of Xbox Live apps and services, what sort of international and localised entertainment content can we expect on Xbox One?
While I cannot give you the exact list of features that we’ll be launching, I can say that the experience of Xbox Live on Xbox One will be dramatically different from what you’ve seen so far. We have a very clear content strategy, which is to have the right balance of international content being available, including movies, music, Youtube, TED, etc, as well as local entertainment, which has been our big focus over the past few months. How much of it is available on day one is something we’re yet to zero in on because there’s development work being done, but surely, you’ll start seeing local content.
Will we have international paid digital content, like Xbox Video and Xbox Music?
For Xbox Video, we don’t currently have a date on when it will land in India. At some point, we will announce it. The intent is to bring that service in because the kind of experience we provide on the Xbox Video service is something we want users to look at. Also, we want our partners to look at it to get an idea of the power of Xbox and Kinect. I don’t know if we’ll be announcing anything around Xbox Video when we announce Xbox One launch plans, but the intent to bring it here is definitely there and at some point we will announce it. For Xbox Music, there is currently no roadmap to launch here.
Will the localised content that is being worked on for Xbox One, also make it onto Xbox 360?
The development of an app on Xbox 360 and Xbox One is different, so while some of our content partners are building apps for both, there might be instances where a partner might choose to just work with one of the two. From a broader portfolio perspective, pretty much all the entertainment content you wish for will land on both platforms.
Is Kinect voice support finally going to be available in India with the launch of Xbox One?
That is one of the features we’ll talk about at the time of announcement. It’s central to the experience in a certain sense, but when we have the announcement, we will highlight what will and won’t land.
The box itself offers so many different kinds of features, so a lot of our focus will be on giving consumers the first-hand experience. I cannot talk to people about it to get them excited; we’re very clear about that.
If and when it does come, will it also become available for Kinect on Xbox 360?
Right now, the focus is to drive the voice support – if it lands – on Xbox One because voice is more central to the Xbox One experience. In our view, the market that would go towards the Xbox 360 would me more of a gamer-first audience; guys who want to play games. Today, Kinect constitutes a large chunk of our business, so we’re trying to create that balance with a gamer-first audience. So the focus with voice is really on Xbox One.
What sort of marketing push are you planning for Xbox One in India?
We have a broad-level philosophy about whom we want to target. The box itself offers so many different kinds of features, so a lot of our focus will be on giving consumers the first-hand Xbox One experience. I cannot talk to people about it to get them excited; we’re very clear about that. We were recently giving a demo to someone at a hotel, and the hotel staff wanted to see it too. So we got some of them in a room just for fun and gave them a demo. Most of them said, ‘the day you launch, we’re picking it up’. They got interested when they saw the demo, so a lot of the focus is on how we can land the experience, whether it’s inside the retail store or wherever the audience is.
Thanks to Kinect on Xbox 360, we’re fairly strong in the family market. When I look at the market for Xbox One, it’s what we like to call the ‘gaming and entertainment enthusiast’ – the youth audience of anywhere from 16 to 30. These are people who are spending on devices. They’re buying the latest smartphones, tablets and tech gadgets. A lot of them, unfortunately, still don’t have a console in their consideration, and I’m not just talking about Xbox here. We believe that they’re not looking in that direction because they aren’t fully aware of what the box can do for them. I don’t think price comes into play here because they’re spending more on tech than what these consoles cost. So that audience is very interesting, and we’ll explore every way in which we can reach out to them – offline, online, social media, PR – and land that message.
There is an extremely critical top-line audience, which is the gamers. They need to be addressed, and that’s why a September launch is good for us. The portfolio increases so there will be a lot more games to talk about. We do believe that a lot of Xbox 360 fans will look at Xbox One as their device, and hopefully we’ll pull some from the competition as well. So gamers and entertainment enthusiasts will be the critical audiences, especially in the initial stages.
About the argument that people who spend on smartphones and tablets would do the same for a console – those people don’t have to contend with the high recurring cost of console games. That’s Rs 50-100 apps versus Rs 3,000 games. So price does still appear to be a drawback. Are you planning to offer any finance options to soften the blow?
We tried the finance options even with Xbox 360 with the assumption that if you amortise the cost of the box, it becomes easier for consumers. You’ll be surprised, but we didn’t find too many takers for the finance option. The people at the store that decided to buy the Xbox 360 were happy paying the full amount.
To put it into perspective of the overall console market in this country and the addressable market that is there, there is what we call the top of the pyramid. There is a huge market sitting there of consumers who haven’t even bought a console yet, and they’re not bothered about prices. The problem is that when a consumers walks into a gaming aisle at retail, they don’t know what they’re looking at. In India, we don’t do a great job of marketing games. Games are like movies; you really have to market it and show people why they have to watch it. Take Halo; people may have heard the name or seen a bit of it somewhere, but the essence of Halo and why someone should pay for it is something that needs to be shown. We intend to take that responsibility and make sure they understand it.
Speaking of marketing games, a common complaint from third-party game distributors and publishers has been that in India, both Sony and Microsoft tend to focus solely on their first-party operations and don’t support third-party games that are also vital to their platforms.
I would kind of agree with that, but we fully intend to change that. We did that with the FIFA 14 bundles that we launched last year. It was one of those rare occasions when we got a third-party game for a console bundle.
We recognise the fact that it’s typically been first-party marketing that’s been happening, but we intend to change that and there’s no two ways about it.
That was part of a global partnership between EA and Xbox though.
Yes, and then we were investing in that game further. We went to about 45 colleges around November-December, and we had these massive experiential events and competitions, and it was all based on FIFA. So there is a clear intent to do more of that. We recognise the fact that it’s typically been first-party marketing that’s been happening, but we intend to change that and there’s no two ways about it. We’ll be investing as much in a third-party game’s marketing, where it makes sense, as we would on our own titles.
The last time we spoke, you had mentioned prepaid Microsoft currency cards that would work across all Microsoft services. What’s the status on that?
They haven’t come in yet. We’re having trouble fixing the price on them. The duty structures are fairly complicated; they’re adding value on top of the card. These are currency cards, so there’s a currency stated on the card. Whichever way we work the duties out, the MRP of the card is turning out to be way higher than the value of the card. I can’t sell you a card worth Rs 60 and ask you to pay Rs 100. We’re trying to fix it, but I don’t know when that will happen. I don’t think duty structures will change, so I think it’s a matter of internal adjustment. These cards would work across all Microsoft platforms, so one very big, prominent payment structure for us goes away if we don’t launch it, but I don’t see a solution in the short term.
You’ve recently announced price drops for the 250 GB Xbox 360 SKUs, and there are rumours of both Sony and Microsoft announcing price drops for PS3 and Xbox 360 respectively at E3. Traditionally, international price drops for Xbox 360 haven’t led to price drops in India. Is that something we can expect to change, at least for Xbox 360, going forward?
There is no internal discussion happening of a global price drop; at least not that I’m aware of. In a hypothetical situation, if there was a price drop globally, India – both Sony and us – is suffering from the exchange rate that prevails today. These console prices were set at a different exchange rate, and now the rate has moved way above that. So even if there might be a price drop, you end up coming to the same MRP because somewhere in the system, we’re investing to protect prices. So for India, there would always be a SKU-by-SKU decision. Even if they drop a game price, for example, whether India can also drop price would depend on where the exchange rate is.
How has the Xbox Live Gold Rush promotion worked for you so far?
Over the last 12 months, we’ve seen absolutely phenomenal momentum on Xbox Live. We’ve seen 2.5x growth of Gold subscribers in India, and even more in terms of new Live account creations. So both, connected consoles and Gold subscriptions, have gone up, so this is one of those ways to thank our users. The whole campaign was designed to make the value proposition of Live simpler. One of the challenges for us was that if a consumer who doesn’t know much about gaming walks into a store, how do we explain Live to him/her? Not every store salesperson knew how to communicate Live, so the non-customer part of the campaign is our internal effort to make sure that we have simple messaging as to what Live has to offer – the best online multiplayer experience, the entertainment content, the deals and discounts that you get – and also to tell the audience to prepare for Xbox One.
In the consumer part, we have 36 free games in the year as opposed to the 24, and there’s also a contest, where we’ve seen great participation. In fact, lots of stores are telling us that they’re running out of Xbox Live Gold subscription cards, which is a good problem to have.
With more people buying the 250 GB console now, they’re happy to download digital content.
Are you seeing people buy games digitally on Xbox Live?
Yes, and that has dramatically gone up. Unfortunately, those numbers don’t get shared at a local country level, but our internal reports show that sales have significantly gone up. People are now comfortable buying digitally, and it’s also a function of people buying the higher-end SKU. If you had a 4 GB console, you wouldn’t have the space to download those games. With more people buying the 250 GB console now, they’re happy to download digital content. So the price drop on the 250 GB and the Gold Rush offer work together – people go out and by the console and then get on Xbox Live and download content.
Are these more of the smaller sized XBLA games, or the bigger retail games as well?
It’s the Arcade games that have suddenly picked up. A few years back, I used to be very disappointed when I would look at the reports and see that people were just not playing all the games that they should be playing. The triple-A game sales are still predominantly retail-led, but we do see a few instances, particularly for third-party games. Once someone gets into the experience of buying digitally and downloading games, they recognise the benefits. In fact, we’ve also seen hardware accessories sales go up; the 320 GB hard drive sells much more than it did last year.
Once the Xbox One is launched, will you see the Xbox 360 as more of a mass-market, entry-level console, owing to its lower price?
We would want both consoles to be mass-market [laughs]. That’s what I get paid for. But yes, I don’t know if I would call it entry-level because that has the connotation of being the cheapest device available. More than entry-level, the Xbox 360 will be for the first-time gamer. If someone was excited about the category, we believe that the Xbox 360, along with the Xbox Live experience with apps, will be a decent value proposition. We also see a lot of the current Xbox 360 user base moving to Xbox One, but we see both consoles running parallel. There will be absolutely no de-prioritising of one against the other; both have enough potential in the market.
