Chris Lewis on Xbox 360’s European Focus

[DrunknMunky Veteran]

Chris Lewis, vice president, Interactive Entertainment Business Europe, Middle East and Africa, tells us about the pressures and challenges of pushing Xbox 360 in the region.

What does Microsoft’s new focus on Europe mean for your operation?

It’s a very textured region, as you know very well, and we enjoy fabulous success in some parts of the region and relative marginal success in others. And our plan quite clearly is to invest in the right marketing, the right content and to align the platform in a way that we are hugely successful everywhere.

Why is Xbox is facing such a challenge in certain countries?

I think there’s a mixture of factors. Where we’ve done well traditionally is where we were in with the first Xbox. The UK is an example of that. The gaming tastes in the UK are quite well aligned with the US – there’s a higher disposable income for a start – we very deliberately set out to appeal to the core space in the first instance and we did that very well. I think the challenges are some of the more Mediterranean markets. Let’s pick on France, Italy and Spain, for example. There’s a much more casual gaming orientation there – people like to dip in and out, they’re not perhaps so likely to buy multiple consoles and they are more price-sensitive markets. I would also put our marketing fairly central to it in as much as I’m not sure we work hard enough to develop locally customisable, culturally connected marketing in the way that we needed to. We are addressing all that and I think we’ve got a much deeper insight, much higher levels of empathy with that now than we had in the first few years and phases.

Which of the games you’ve talked about at E3 will find greatest success among the countries that Xbox is finding a challenge?

A phrase I’ve been using recently is that we need a healthy level of schizophrenia about the way we approach the market. I think it is critical that we continue to invest in and protect the core, which we’ve always been well connected with. And you will not see us departing from that community in any way, shape or form. So, if I’m in that space, then I’m going to be pretty excited about things like Gears Of War 2. And what you’ll see us do is continue to dial up emotional connection with the broader community, but we want to do it such a way that we don’t alienate the core. And similarly, when we’re talking about Gears Of War, that we don’t alienate the masses. That’s not the easiest challenge.

How do you intend to pull that off?

I think it’s about targeting. You just have to find the right way to target those communities. Sometimes people ask me the incredibly difficult question which is: ‘Hey, what’s the one thing you have to do in EMEA to be successful?’ You’re tempted to roll your eyes into the back of your head because there is no one thing. People say: ‘It’s got to be price’. Well, no, actually, it isn’t. Sure, it’s a key lever to pull at the right time, but…

But didn’t sales shoot up after your last price drop?

They did but my point was that price alone is not the panacea. If you don’t have the content that appeals to that family audience, or to that consumer, then they’re not going buy just on the price point. You’ve got to have games that are not intimidating and dark, that mums and dads can get involved in without the incumbent humiliation.

Live is vital to your strategy to broaden Xbox 360’s appeal. How has Live take-up in Europe compared to the US?

We don’t normally break out the European element of our Live membership. I mean, I know what it is, but I don’t want to get rapped on the knuckles by being too explicit with you. I will say to you as a percentage of that overall total, it’s just less than a quarter.

So therefore the US…

…is the lion’s share. And I’ll tell you also that a large part of that is in the UK, partly because of the language aspect, the fact is you need, on a community service like Live, enough people of a similar language orientation to get a community so that it starts to really blow out. Up until fairly recently we just haven’t had enough on the service for non-English-speaking folks. In France, for example, we’ve only recently started to get figures where you’ve got enough French-speaking folks getting a rich enough experience to talk about it meaningfully to their friends.

It’s a subtle distinction, but do you think the European market is ready for leading an online life through their living-room TV rather than their PC?

I don’t think they are but I think the time is now. The whole industry is getting really close to the inflection point where that’s what people just crave and I just know that we will offer the best experience. I just know we are so well placed to continue and invest and develop the service like nobody else can.

Lips, Scene It? and Primetime are being extensively localized. Has it been difficult to do this?

Yes, it has. Clearly what you can’t do is go storming into different markets with a somewhat vanilla-based proposition, assuming that the different cultures will adopt it. Will it continue to be a big challenge to accommodate the different tastes around the region? Yes. Will we disproportionately invest to make sure that we will do that effectively in Europe? Yes, we will.

Do you have any plans to change the pricing structure in the UK?

We’ve always said we remain competitive. I was very pleased with what we saw as a result of the price drop in March. It was perfectly timed, it was right for the market. Will we continue to keep our eye on the price and make sure that we remain competitive? Yes, we will.

Source: Edge