Microsoft's Shane Kim talks Xbox 360 failure rates, says Core is "here to stay"
- July 31, 2007 14:56 PM PST
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The Lost E3 Interview (part two)! GamePro speaks with Shane Kim about the Xbox 360 failure rates, 'fessing up and taking responsibility, plus Microsoft's plans (if any) for getting into the handheld market.
Shane Kim: The Lost E3 Interview (part one)
GamePro: Let's turn back to the original Xbox. With the quick transition to the Xbox 360, has Microsoft taken any heat from Xbox owners feeling that you bailed on them?
Shane Kim: No, not really. With all due respects to those folks, I don't mean to demean them in any way. Most of those people have made the move with us to the Xbox 360 and the rest I think are waiting for Halo 3, quite honestly. But we also did a pretty good job on backward compatibility so it'd be a lot easier for those people to move. This is going to be the holiday you'll really see that, and I think we'll get a lot of PS2 switchers as well.
One thing that popped up at the briefing was the limited edition Halo 3 Xbox 360. You've got all these different versions, so are you concerned you might confuse folks?
SK: No, because it's a limited edition. Maybe we didn't make that clear enough, because now people think we've got a fourth SKU, and there's not. It's sort of like the Legendary Edition of Halo 3 that comes in the Spartan helmet. It's not going to be around for a long time. So if you want one, you better grab one. Hopefully we'll build enough so everyone that wants one can get one, but when we stop building them we're not going to build any more.
Is the Xbox 360 Core here to stay?
SK: It's definitely here to stay. We've got a great line up from Core to Elite, and there's that set of customers that want the lower price point who want the vast majority of the functionality of the Xbox 360, and you get that with the Core. And you still have the option to add storage and wireless controllers with it if you want so for a lot of people getting in at $299 to a high def experience that's awesome. Obviously there are other consumers that want more storage and greater capabilities etc. The Xbox 360 or the Elite are going to be a great option for those folks. We know that this works because we've sold plenty of core systems and we can't make enough Elite systems to meet demand so we know there are a lot of people out there that want the additional storage. I think our strategy of having choice and having different price points is a really good thing and is really paying off.
Thinking back to late 2005, I remember being astonished that Microsoft was able to release the Xbox 360 in such a short time. But now, unfortunately, the Xbox 360 is seeing some high failure rates. Could these failure rates be partly blamed on the rush to get the system out in '05?
SK: You know I'm not a hardware guy, and I think it's fine to speculate that it might have contributed to the failure rate. But at the end of the day, what you're talking about is a very complicated piece of consumer electronics. There are 1,700 components, 500 million transistors, and it's just a very complex high-end piece of machinery. It's very unfortunate, and we've apologized to consumers who've had issues. I think the important thing is that we're standing behind our product, and we're going to take care of the customers who have had issues.
You say the Xbox 360 is a very complex piece of machinery, and while that's valid on one level, Sony's PS3 has equally advanced hardware... and their failure rates are pretty low. You guys outsourced both the design and the manufacturing of the Xbox 360, so is Flextronics or any other manufacturers sharing the blame on the failing Xbox 360s?
SK: No, Microsoft is taking responsibility for this. This is a Microsoft product and we're the ones that took the charge and we're the ones who are extending the warranty to our customers. It's Microsoft's responsibility full stock. I can't speak to Sony and how they built their product. They've got a much bigger product than we do. Physically it's bigger, so they made some design decisions I'm not sure we would have, but that said, I think it's way too early to say what Sony's issues will or won't be.
First of all, one of the things that we needed to do was we needed to have a critical mass in the market to be able to look at the different issues and make sure we did all of the high quality testing that we could before determining that we needed to take this extraordinary step. Sony doesn't have critical mass. [The PS3] hasn't even been in the market for a year so it's way too early to say whether they're going to run into issues of their own with respect to the hardware.
Obviously you've had quite a bit of success with the Xbox 360. But one thing that gets lost is that Sony is focusing on three consoles: the PS2, PS3 and the PSP, and taken together they're quite successful. Does Microsoft ever plan to broaden its market and start delving into other avenues?
SK: Well first off we are focused on the Xbox 360. We're focused on winning this generation. That's what we want to do. Getting into the handheld market is like launching an Xbox 360. It's a complete platform program, and you better be ready to fight the war on two fronts. As far as I'm concerned Sony and Nintendo can continue to beat each other up in the handheld market. [PSP] has to be a big distraction for Sony.
[But focusing on the Xbox 360 alone] is good for us and for the Xbox 360. What Sony has done with the PS2 is what we want to accomplish with the Xbox 360. That's what winning the generation means. We want to sell 100 million Xbox 360s, and we want to do it for a long time. The goal is to win the generation. It is interesting to note, that even thought the PS2 continues to sell well, people aren't buying a lot of software for PS2.
For the PS3 I think there's a huge problem. To take a price cut this early in the life cycle... what does that say? We have a ton of confidence of the content portfolio of Xbox 360 and Xbox Live and that's why you're not seeing a price reduction from us.
Sony talks a lot about a ten year life cycle. You guys took the opposite approach with the original Xbox, making a super-short cycle. Are you considering a super-long lifespan for the Xbox 360?
SK: The customers will tell us how long the Xbox 360 is viable. We definitely plan on it have a five-year-plus life cycle. We do plan on winning this generation and nothing is going to shake us off of that aspiration. So yes, we do plan for the Xbox 360 having a long life cycle, and the tail will be determined by the consumers.
If you were to do a follow up, it wouldn't be in, say, the next seven years?
SK: There's no set time table. Obviously we didn't stick to a time table moving from the Xbox to the Xbox 360. It's all about strategy and what the competition is doing, and what the company's larger objectives are. For us we're very clear cut and very focused; win this generation. That's why launching when we did in 2005 was so important, I think it's given us a big advantage, especially over Sony. We're in the leadership position. We have this huge momentum, and we have the greatest game lineup of any system.
