Xbox boss confident of holiday win

Kristin Kalning Games editor • E-mail

In July, Don Mattrick came off an 18-month sabbatical to take the helm at Microsoft games. To say things were a bit rocky for the Xbox 360 makers would be an understatement.

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As the rest of the games industry was gearing up for E3, the company put out a public mea culpa about its Xbox 360 hardware failures. To pay for the extended warranties on the consoles, Microsoft announced that it would take a $1 billion hit against quarterly earnings. Before the month was out, Peter Moore, the head of Microsoft games, would resign to take the top spot at EA Sports.

But as Microsoft heads into the holiday season, Mattrick says he feels that the company has rebounded just fine from the summer’s bit of bad press – and is poised to trump the competition this holiday season.

“On a price-per-value basis, I think we win…relative to Sony and Nintendo,” he says. “Of course, I’m biased, given the role that I’m in, but if I really think about it using my consumer instincts and the experience that I’ve had, this is the best blend of performance, price, online and games – by far.”

Few game industry executives have the length of experience that Mattrick has. The “self-proclaimed math nerd” and Vancouver, B.C. native developed his first game, “Evolution,” at age 17. The game was a top 10 hit, and funded his company, Distinctive Software, which would become EA Canada in 1991. He spent the majority of his career at Electronic Arts, most recently as the president of its worldwide studios.

I spoke with Mattrick before the Thanksgiving holiday about his decision to jump back into the fray at Microsoft, about what the company has on deck beyond “Halo 3” and why he thinks “Grand Theft Auto IV” could be next year’s big hit for Xbox 360.

Console Wars Games editor Kristin Kalning conducted Q&As with executives from Sony, Microsoft and Nintendo. Monday: Jack Tretton, president of Sony Computer Entertainment America Tuesday: Don Mattrick, senior vice president, Microsoft Interactive Entertainment Business unit Wednesday: Reggie Fils-Aime, president, Nintendo America

So, from heading up EA’s global studios to a company that makes hardware and software both. Did you have any ramping up to do, looking at hardware for the first time?

That’s a good question … obviously having 23 years of industry experience helps a lot.  At my tenure at EA, we had an opportunity to work intimately with the people inside of Microsoft, Sony and Nintendo. The people inside of Microsoft, we had a very high opinion of, and I had a high opinion of in terms of their commitment to growth and excellence in the long term.

But software was your comfort zone. Is that fair to say?

Software was a core competency but again, during my tenure inside of EA, we went from 300 people to 8,200. So at different points in my career I had to do just about everything, including take the garbage out and clean up the facility. So it was a good base for any business, and to be honest, being in a leadership role is a natural place that I enjoy.

Of course, you came to Microsoft in a permanent role just as the company was coming clean about the Xbox 360 hardware failures and announcing that it would take a $1 billion hit against quarterly earnings to pay for extended warranties … that was definitely a rocky period.

It’s always challenging when you try to innovate and create a new product and it doesn’t go exactly as planned. What I found impressive was the straightforward way that Microsoft dealt with it. They acknowledged the challenge, they came up with a warranty program [that] is superior inside of the industry and drove that through retail … in a very thoughtful and direct way. It showed commitment, it showed responsibility and it showed dedication to the category.

Some would say Microsoft waited a bit too long to acknowledge it publicly, however.

Again, when you acknowledge something, I think what people are looking for a complete answer. I think it’s easy to speculate on well, gee didn’t they know? The challenges weren’t just a single thing that you could easily put your finger on, there were a few things that were interdependent … All those pieces needed to be together before you could have a complete communication with people.

Do you feel that the company has recovered from that and the hit against earnings?

Absolutely.  I think the team’s done a fabulous job.

Microsoft saw a jump in hardware sales in September and October … largely due to “Halo 3.” Was the increase about what you expected?

Yes, we’re tracking against our plans. “Halo” is an important component. I think there were other factors that drove the success. I think we’re getting to the point of critical mass in terms of the number of hits. I think we have the highest rated content ever to exist on a gaming system.

Such as?

If you look at our quality ratings, there [are] more 85-plus rated games on Xbox 360, by a long shot, when you compare it with PlayStation 3 and Wii.

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