Transcript of Remarks by:

Robbie Bach, Senior Vice President and Chief Xbox Officer, Home and Entertainment Division, Microsoft Corporation J Allard, Corporate Vice President and Chief XNA Architect, Microsoft Corporation Peter Moore, Corporate Vice President, Worldwide Marketing and Publishing, Xbox, Microsoft Corporation Electronic Entertainment Expo (E3) 2005 Los Angeles, California May 16, 2005 KIM: Hello. My name is Kim. I'm here to start you on a journey into the future of entertainment. It's a future where I am always at the center of a world of experiences that includes my games and my friends. It's a future where my games are always personalized to match my desires; a future where those games connect me to the people and experiences I care about most. That future starts right here, right now. (Cheers, applause.) This is my Xbox 360. It's here and it's on. (Cheers, applause.) (Video segment.) ANNOUNCER: Please welcome Robbie Bach., J Allard and Peter Moore. (Applause.) ROBBIE BACH: Welcome to the future of gaming. We're here tonight to offer new ways to experience games and entertainment, to redefine what it means to have fun. J ALLARD: Tonight I'm here to tell you about a new product that's inspired by the creative power of the individual and driven by the passion of a worldwide community. With Xbox 360 we've created technology that will enable people of every age and from every corner of the planet to gather together in new ways. It's a product that will bridge vast distances through shared stories and shared experiences, a product with games at its core, surrounded by limitless, connected digital entertainment. PETER MOORE: And tonight I'm going to show you a world of games that are fueled by high-definition graphics and sound, a world powered by a new generation of video games inspired by human creativity and driven by human energy. It is a world where our partners will create unbelievable game experiences that will transform the very idea of entertainment. ROBBIE BACH: Tonight, we stand on a watershed moment in the history of entertainment. We are here to celebrate the launch of the world's most powerful game platform, Xbox 360. Xbox 360 is an entertainment experience that revolves around you and will take us all into the next generation. In the next generation, Xbox 360 will transform the way people play games and have fun. In the next generation, video games will become an essential component of global pop culture. In the next generation, this industry will reach an audience many times larger than we've ever dreamed of. Now, we've traveled a long way since we stood on stage four years ago at E3 to tell you about our plans for a new console called Xbox. Since then, we've gone from zero customers to more than 20 million, from never having created a console game to unleashing Halo 2, which enjoyed the single largest day in entertainment history. (Cheers, applause.) Not just gaming history, entertainment history: $125 million in one single day. (Applause.) Four years ago, Microsoft had never sold a game console at retail. Last Christmas holiday season, Xbox was the No. 1-selling console in North America. Three years ago, we announced our plans to expand game play through the power of online gaming. Today, I'm delighted to announce that at the end of next month, 2 million subscribers will be online with Xbox Live. (Cheers, applause.) Great games, an unbelievable ecosystem of partners, the industry's leading online game service, expanding market share. Together we've built a global multi-billion dollar business. It includes the world's leading developers, publishers, retailers, technology companies, broadband providers and consumer brands. Now, ultimately our success is rooted in games and Xbox is setting new standards with powerhouse franchises like Splinter Cell, Dead or Alive, Project Gotham Racing, Fable, Knights of the Old Republic and Halo. In 2005, Xbox is the fastest-growing platform for game sales. Right now six of the ten top-selling games are Xbox titles and gamers can expect more than 200 new Xbox titles this year, with hundreds more in 2006 and beyond So let's take a look at some of the new titles coming to Xbox in 2005. (Cheers, applause.) (Video segment.) ROBBIE BACH: What a fantastic lineup of games that truly takes advantage of the power of today's Xbox. And it doesn't stop there. In 2006, we'll continue to market and sell Xbox consoles. By 2006, we'll have doubled the number of games on Xbox Live and together we'll continue to sell Xbox games by the millions. Now, many gamers have been asking us if they'll be able to play their favorite Xbox games on Xbox 360. Tonight, we are very pleased to announce that Xbox 360 will be backwards compatible with the top-selling Xbox games. (Cheers, applause.) Our team has worked with passion and commitment to build the most powerful game platform in history. And Xbox 360 will drive category growth for the entire video game industry. Growth that will create an increasingly profitable worldwide business for our partners. How will we get there? We'll start this Christmas holiday season when we launch Xbox 360 in North America, Europe, and Japan. (Cheers, applause.) That's right: Xbox 360 will hit the stores this year as we orchestrate the industry's first- three region console launch. We'll get there with the best launch line-up in history. We'll get there by making games more approachable for people who didn't grow up with a game controller. We'll get there by offering games that deepen the social experience of playing with your friends. And we'll get there by integrating all of your digital entertainment devices and content into your gaming experience. Working together, we will transform thought leadership into market leadership. We built Xbox 360 based on a mission, a dream if you will. That dream is to inspire people to think about entertainment in new ways, to revolutionize the way people think about having fun. Now, at its core, Xbox 360 is a great game console and Itagaki-san and Tecmo have always been at the forefront of what the platform can deliver, and what great games can achieve. Ladies and gentlemen, Dead or Alive 4, exclusively on Xbox 360. (Cheers, applause.) (Video segment.) J ALLARD: Once again, Team Ninja has taken Dead or Alive and gaming to the next level. This is the kind of first day experience you can get when you partner with the best game creators in the world and arm then with great software, amazing hardware and a world class service. There's been a lot of discussion recently about when the next generation of video games begins. It begins right now, it begins this year and you just saw it with your very own eyes and there's plenty more where that came from. This year we'll have between 25 and 40 titles ready this calendar year for Xbox 360. (Cheers, applause.) We already have 160 titles in development and the arrival of Xbox 360 signals a shift as important as any we have ever seen in the industry to date. Thirty years ago we saw the birth of this industry with the arrival of the first 2D games, games that appealed to everyone. They found a very broad audience that numbered in the tens of millions. And we all remember those great ads from that era where entire families gathered surrounded the TV on the couch playing games together. Well, then we made the leap, the leap from 2D to 3D and we expanded and jumped our industry past the hundred million mark. But at that very same time we narrowed our scope to a much more limited demographic. Today, we're poised to make the leap again, this time from 3D to the HD era. Now, of course the HD era is about high-definition graphics and unbelievable sound but the implications of the HD era are even more profound than that. It's about the ability to connect with your communities and to personalize your experience, it's about unleashing the creative power of human energy. If we work together to create games and experiences that really deliver on the promise of the HD era, as an industry we'll take games places they've never been before. In the HD era, we are going to reach 1 billion people with our medium. (Cheers, applause.) This is a great industry, it's a great business. Our revenues keep growing faster than music, than movies, than television. We're at the cutting edge of technology and the leading edge of imagination. But we used to fill the living room with kids and adults, men and women but today we're relying mainly on one type of consumer. Now, don't get me wrong, we love that guy, the 18 to 34 year old male, he's the backbone of the industry. And with titles like Dead or Alive 4, he's guaranteed to get the incredible gaming experiences he craves. But 360 is also the product that's going to push gaming back into the mainstream, the product that will fill that couch up with people from every demographic and every market. How on earth are we going to do that? Well, take the product, a product with clear, compelling vision, a vision that living entertainment is powered by human energy and Xbox 360 is that product. We believe that when you unlock the power of human energy we're going to bring everybody back to the living room. At the same time we're going to unlock the potential not only of the medium but of the entire industry. Next generation, a billion people will play our games and it's not just because they've figured out the latest combo move or they've figured out how to get past level 14 but because we've unlocked the secret to creating games and entertainment experiences that they can call their own. Games that provide entertainment experiences that appeal to everyone; we've been working for years to fulfill this vision and the result is Xbox 360. It's the product I've always dreamed of creating, it's the product that will fill the living room back with people who can't wait to get their hands on the controller, to get into the game, to be part of the excitement and to join us in the community. They want to bring their own creativity to the experience and pay off the true promise of our medium. The essence of our vision is reflected in the name: Xbox 360. It's the product that delivers experiences where the player is always at center stage. You can see the essence of our vision in the console itself. When we designed Xbox 360, we wanted to create a physical presence that would be truly international. We collaborated with two of the best and most innovative design firms in the entire world: Hers Experimental Design Laboratory in Osaka, Japan and Astro Studios in San Francisco. What they created is a product that distilled our vision to the very essence. It's a simple and elegant design, a design that reflects our hopes for medium through its brightness and optimism. It's a product that will be worldwide in its sensibility, yet timeless in its appeal. When we started the console, but the unity of our vision extends to the entire family of products that will all look great in the living room no matter where you put them. That family includes a wireless controller that finally un-tethers the gamer from the console. Even with batteries, it will be lighter, smaller, and more comfortable than today's Xbox controllers. (Cheers, applause.) Let's sit down and take a stroll with Kameo. Now, the great thing about Xbox 360 is the experience. Right here you hit the Xbox Guide Button and you launch the user interface for the HD era. It's an interface that's clean, consistent and customizable. Another click and you have instant access to your games, your friends and all of your entertainment. Here's my Gamer Card. Today, everybody in Xbox Live has a Friends List and a Game Tag but this time we're going to take it to the next level with new features like the Gamer Cards. Think of your gamer card kind of like your online trading card. It includes your reputation, your Gamer Score, the zone you like to play in and your motto. With zones, you're going to be able to match up with players whose style of play matches up with yours. So whether you're in the family zone or in the pro zone, you're guaranteed to match up with the right people all the time. We've also a new concept called Achievements. Now, these are sort of a record of everything you've accomplished across your library of games. Let's say you haven't figured out that final achievement in PGR 3? Just ask a friend online. In the HD Era, community and connection is critical. With Live, even if I'm offline, my friends can still find me and leave me messages in the integrated message center either with text, voice or video. And all of this connectivity is available whether you're playing a game, watching a movie, listening to music; at any point in time your friends are just a click away. Let's say you played online with somebody that you'd like to reconnect with but you forgot their Gamer Tag? Well, in the Xbox 360 universe you can easily connect with any one of the last several hundred people you played with because we'll track that list for you. With Xbox 360, Live is going to offer something for everybody. We're going to make it easier and more accessible than ever before to join the community. Because on Xbox 360, Xbox Live will offer a free level of service directly out of the box. (Cheers, applause.) You heard it right: everything I've just shown you will be absolutely free as part of our Silver service. And if you want to supercharge your experience, you can upgrade to Gold so you can take advantage of additional services we'll be rolling out. With features and services like this we're going to extend our online leadership and connect to over half of the Xbox 360 consoles to Xbox Live. A billion people this generation; well, that's a big number but I know we can do it. To do our part, we thought very differently about our approach when in designing the product. We knew we had to tap into a lot more markets, we knew we had to tit into a broader range of lifestyles. So what we did is we created a number of scenarios, scenarios that informed our decisions and shaped our direction every step of the way. Out of the gate we knew we had to create an amazing product that would blow the roof off gaming for our core audience; people like this guy: Striker. He's our hard core gamer, the lifeblood of the industry today, the guy that stands in line for 24 hours to get his hands on the next hot release first. He's a fast-twitch gamer who'll play for hours to master every level and every move before he mixes it up online with the best of the best. Well, last generation we opened a whole new set of experiences and a universe for gamers like Striker. Xbox Live is going to expand the boundaries even further by making it easier for folks like Striker to find other competitive players with to battle online. And hardcore gamers are going to love seeing the new features like Spectator Mode and Tournaments really coming to life in Xbox 360. There's no doubt in my mind Xbox 360 is going to thrill the hard core gamers that live and breathe video games. But that's not going to get us to a billion. Not every one is driven by the need to crush their opponent on the field of battle. So we've also built in experiences for the casual gamers and the non-gamers of our world. Let's talk about VelocityGirl. We all know someone like her. She might pick up a controller every once in a while over at a friend's house but really gaming is not a central part of her existence. It's an important question that we've struggled with in this industry for the last 20 years; how do we get the VelocityGirls of the world reconnected to our industry and back into the games. With Xbox 360 we have an answer. She's going to rejoin us because we're delivering a fresh set of services designed to nurture community and to broaden game play. To expand the market, we're going to deliver more casual game experiences on-demand through the Xbox Live Arcade. Whether retro, puzzle or just plain-old time killing games like solitaire, we're going to have an amazing assortment of games available. So whether you want to stare down your brother on a Texas Hold 'em match or gang up with 3 buddies from college and play a little Gauntlet, Live Arcade is just going to be a press away. We've got something else in mind. We call it the Xbox Live Marketplace. The Marketplace is going to introduce gamers to the entertainment through trailers and demos that are going to drive them to the store to pick up the latest titles. It's going to deepen the gamer engagement with games that they already play and already love with episodic content. They'll see new maps, new levels, new weapons, new cars and much, much more. But maybe most exciting, the Marketplace is going to be a way to get VelocityGirl reengaged with our market and reengaged with games. Because on the Marketplace, she's going to be an active member of the community, the community of people that play games like Tony Hawk. Now, she might never pick up a controller, never take a run in the halfpipe but she'll be able to design and sell stickers, shirts, boards, sound tracks and even design her own skate park for those hardcore gamers like Striker. We're also going to provide VelocityGirl with great experiences around the games, experiences that extend the very idea of entertainment, like the ability to watch favorite bands perform on Xbox Live or premiere a new song. We'll also transform the way that she communicates. Last generation, we led the way with voice chat over Xbox Live. This generation, we're going to break new ground again, this time with video chat that's going to let people see and hear each other at the same time, whether they're playing games, sharing music or watching photos. Velocity Girl is going to love Xbox 360. But we're not stopping there. We have somebody else in mind. Here's BeatBuilder. BeatBuilder is our technology trendsetter, the one that has all the latest devices, lets the rest of the world know where the world is headed. What BeatBuilder is telling us is that in the very near future entertainment is all digital and he wants to see it all on his high def TV. Xbox 360 is perfect for BeatBuilder because it works with everything. It's got games, it's got TV, it's got music, movies, digital photos, online music services. Xbox 360 is going to connect to a world of digital entertainment devices including hundreds of mobile music players and digital cameras, not just from our partners but also from some of our competitors. (Cheers, applause.) This is the ultimate digital entertainment amplifier for all of these experiences. Out of the box, it's a progressive scan DVD player that's going to make the movies in your library look more spectacular than ever before; and remember, it's going to keep you connected. It's also the projector that lets you show off on your big screen TV photos in your living room or share them across the world while you narrate. When he's not playing games, BeatBuilder is going to use this digital amplifier to open the door to incredible, new high definition experiences. He'll be able to sample and purchase content online, he'll be able to stream high-definition entertainment stored on his Media Center PC. He'll be able to bring his entire experience to life in his living room. (Video segment.) Well, you all saw the touchdown but you might have missed the invite. Only on Xbox 360 will your high definition entertainment experiences always be connected. That's right, we designed a single device that's going to let you purchase music, purchase movies online and stream high definition entertainment, whether it's movies or pro sports, all the while staying connected to your live community; connected to your community all the time in high def. Striker, VelocityGirl, BeatBuilder: We're checking off the list but these are just some of the people that we thought about on our journey to build the ultimate entertainment product with true mass appeal. It's really all about achieving the true potential of this medium by working together to reach a billion people and I promise you, we've thought about everyone and we've got them all covered. (Video segment.) (Cheers, applause.) J ALLARD: All right, that's an interesting demographic, too, billionaire software moguls attempting to be funny. (Laughter.) It's kind of a niche market but I think we've pretty much got it sewn up. Bill's right, of course; without amazing hardware and software, we've got unbelievable technology and it's unbelievable technology that's going to light up the imagination of creators and knock the socks off of customers. But Steve was right too, there's a lot more to it than pure computing power. With XNA we're going to satisfy the needs of game creators to make sure that they have the best in software and best in tools so that you get the best in games. We're also going to form new partnerships to really bring the true potential of the HD era home. And we're thinking about customers more broadly than ever before So together, Steve and Bill are both right because we've combined hardware, the software and a world class service to create the most powerful games platform ever created. It's a platform that delivers power and elegance in perfect balance, it's a platform we've been refining for years and it's a platform that no other company in this industry can even try to match. (Cheers, applause.) Next generation, this platform will enable us to turn the entire world into gamers and that's how we're going to reach a billion. Now, of course we've built the Xbox 360 to capture some of the energy and some of the key consumer trends that are shaping our culture. One of those trends is the urge to personalize, it's everywhere. And next generation, you'll be able to personalize just about everything in your Xbox 360 experience. You can change the look of the interface to match your personality or add a favorite photo as wallpaper. And with Faceplates, you're going to be able to match the look of your console to your interests, your living room d