Shane Kim Interview May 2008

1-1 with Microsoft Corporate VP and boss of Game Studios Shane Kim, in his most detailed interview this year. Halo Owns Gears, PGR5, buying Square Enix, 360 Slim & more.

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By Adam Doree

Xbox finds itself in an interesting position today. The most compelling evidence out there suggests it's currently still ahead of the race with Sony, and that it has a fuller offering for traditional gamers than Nintendo. But therein lays its next challenge: both Sony and Nintendo know how to court the gaming audience beyond the Halos and the Gears, while Microsoft has everything to prove if it is to continue the tremendous momentum it has achieved with Xbox to date.

In our first senior Xbox executive interview since October 2006, we sat down with Shane Kim in San Francisco last week to get a broad and detailed update on where things are at, what's happening this year, and most interestingly, what happens next.

This Microsoft Corporate VP and of course head of Microsoft Game Studios last spoke with us in summer 2006, way before the launch of PlayStation 3 and Wii at a time when Sony could only make one blunder after another and Nintendo still had everything to prove including the choice of its console's name. Today, Nintendo is the biggest thing in video games once more and Sony has regained a lot of control over the direction and performance of PlayStation and its forthcoming line-up.

As ever, there is no time to sit and look around in the games business, and Shane Kim is all too aware of it. We thought we had some pretty tough questions lined up for Shane, and we were impressed with many of his open and thoughtful answers.

Read on to find out why Gears of War 2 can't beat Halo 3, what happens next for Project Gotham Racing and Rare, buying Square Enix and why Japan cannot be won, 360 Slim Edition, motion control, winning the mainstream audience, and how much of the division's resources are devoted to what happens beyond Xbox 360.

Kikizo: The Xbox business has always had a 'face', whether it was J Allard or Robbie Bach, Ed Fries, Kevin Bachus, or more recently for example Peter Moore [click links for interviews] or yourself. Now with Don Mattrick in charge, are you going to position him as the new 'face'?

Kim: Well, I wouldn't consider myself as part of the face of Xbox! [laughs]. I think Dom's policy is that we're not going to have one single face - [to do so] is not necessarily a great strategy, because sometimes, people leave! So I think it's more important to have multiple spokespeople, who can speak intelligently about the broad focus, and I'll be one of them, that's fine; Dom will be one of those people, but I don't think he wants to be the only person.

Shane Kim, General Manager, Microsoft Game Studios

Kikizo: Another high profile Xbox person, Aaron Greenberg, laid into Sony big time recently about some of their shortcomings. Fair enough, most of what he said is valid, but at the same time I think people tend to more easily forget some of Xbox 360's undelivered promises. I remember J talking years ago about user created content and content upload...

Kim: But he didn't give a date!

Kikizo: Well, come on. We're now three years into the lifecycle or whatever. And it's not really in sight. And interestingly enough it's about to kick off in a pretty tangible way on the Sony side with things like LittleBigPlanet. What would be your comments on user created content and the lack of it?

Kim: I think it depends on your definition; maybe the vision that was laid out way back when was very visionary, but if you look at things for example like Forza Motorsport 2, the ability to customise your own libraries and cars and actually sell those to other users in the Forza auction house, that's an example of user generated content. It's not LittleBigPlanet, but it is an example, right? And if you look at what Bungie did with Halo 3 and Forge, again, customised content experiences, that's another example. So I actually think that in a lot of cases we're delivering on that. With XNA Community Arcade, that's really going to come to life as well.

Kikizo: Good points - what is the status of the XNA user created stuff though, because that sounds like it could be the 'real deal'?

Kim: Honestly I don't know; I know that we're working on it, we have the basic infrastructure in place, it's just that we have to be smart about how we manage that model, because now we're talking about users submitting content, how is that going to be certed so that it's a good experience, that's where it gets more complex and more tricky.

Kikizo: I am not asking you to comment directly on the amount, but you guys were rumoured to have paid $50 million for this GTA downloadable content that's coming. Obviously this demonstrates Microsoft is happy to get its wallet out to make stuff like that happen. My question is, why can't you do something similarly stunning to win Japan? Why can't you use real financial muscle to buy a Square Enix, or to secure exclusive rights to one of the only IPs that actually matters in Japan, its Final Fantasy franchise? [Editor Note: I'm no economist, but Square Enix market cap is $3.8bn; ten times what Microsoft paid for Rare in 2002, but 1.5% of Microsoft's market cap].

Kim: Sure, well without going into details about specific examples, the thing you have to look at is, to spend a lot of money to make something exclusive on our platform without a large installed base, we're going to pay an awful lot for that exclusivity because they're going to forego a larger installed base elsewhere. Is that really worth it, will that really turn around your fortunes? That's what we really have to question - is $50 million or $100 million or whatever - is that really the right thing to do, and is that going to lead to long term success?

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