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Tuesday, August 16, 2005

Peter Moore: The Exclusive and Essential Interview: Part Two

Peter Moore: The Exclusive and Essential Interview: Part Two

"In the first half of our transcription of SPOnG’s interview with Xbox Vice President Peter Moore, we covered the emergence of Xbox as a console superpower, launch plans for Xbox 360, and whole lot more. If you’ve not done so already, read the most candid Microsoft executive interview to hit the web to date right here.

SPOnG: We expect Sony to launch a spoiler campaign around the time Xbox 360 launches. A slimline PlayStation 2 console for around or even under the $90 mark has been mentioned several times. Any thoughts on this?

Peter Moore: Well I keep on hearing this and I scratch my head. We’re talking about two different sets of consumers. If you don’t already own a PS2 or an Xbox, then you’re not the guy we’re talking to on the night of launch. You're not the guy with his name on a waiting list to pay the opening price when the 360 comes in. I think whatever Sony might do might make them [Sony] feel better about wherever they’re at, but it won’t affect our business one iota.

SPOnG: Perhaps they're thinking they can appeal to the parental set, offering a console at perhaps $200 less that is still a viable platform?

Peter Moore: We’re going to be talking to the consumer who wants the next-generation console with high-definition experiences and wants to connect to people around the world. That wants to know that he or she is part of a growing community, that is not only about games. You can connect your iPod, you can stream your music, you can connect your digital camera, you’ll see HD movies streamed through your Windows Media Centre to Xbox. Your PSP can connect! Anything with a USB port. So we’re not talking to a consumer who’s looking to buy a cheap console.

SPOnG: Touching on price for a moment…

Peter Moore: That’s about as much as I’m going to say on price.

SPOnG: Ken Kutaragi has been on record to state that the PlayStation 3 will not be cheap, setting the expectations of the market and the consumer…

Peter Moore: I was in Japan for a meeting last week and Kutaragi-san said something along the lines of, “[PlayStation 3] will not be priced for home use…” Which…well, I don’t know if it got lost in translation, but it’s not the thing to say. From a pricing point of view for 360, we’ll price accordingly for the market and to hit the business objectives which are to grow our business. But you certainly won’t hear from me that Xbox 360 is going to be priced outside of the home market.

SPOnG: And that’s surely a lesson learned from the first Xbox?

Peter Moore: Yeah, especially in Europe. One thing we’ve learned is shipping in March at 479 Euros is maybe not the right thing to do…we’re going to go at the right time and we’re going to price to meet the consumers’ needs.

SPOnG: Will Xbox 360 ship as a significant loss-leader?

Peter Moore: I’m not going to talk about the cost of goods or whatever, but you know what the business model is. What you’ll hear from us is that we have ambitious goals to drive forward and to able to hit market pricepoints accordingly around the world. This is a global business now. And I know Europeans always feel they get shafted. Marketing is a key factor and pricing is a weapon, there’s no doubt. And if you over-price, regardless of what your profit needs are, you’re just going to be left with an inventory in your warehouse and your goods won’t sell. You’ve heard us talk about running a profitable business this generation. We’re still in investment mode, but in this next-generation the company has said publicly that there is profit on the horizon and the investment will all pay off and I’m very confident, from looking at our planning, that we can already see those scenarios playing out.

But to do that we need to grow to scale. And scale means making sure you price accordingly to the marketplace in particular regions and we have every intention of doing that.

SPOnG: So, we’re talking what? Sub-$500?

Peter Moore: Priced accordingly!

SPOnG: You can’t commit to it being under $500?

Peter Moore: No." [more]

This is a worthy read. Peter Moore reiterates MS's commitment to the Japanese market.

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