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Takahashi Interview with Microsoft's Bach Part2: RRoD, Xbox720, ...
>> From venturebeat.com:
[QUOTE]
* Q: If you go back in hindsight to November of 2005, and your yield was not so good, you could have predicted a big return rate because the yield was so lousy. Did you ask yourself whether you should delay the launch? Wait for the yield to get up? Or just keep going?
* A: This is the hard part. The technical nature of the challenge wasn't related to yield. It wasn't related to things we were seeing in testing or some judgment call we had to make about whether the product was ready. We were confident the product was ready. We did a lot of testing. The problem that shows up with the three red lights on the console is a complex interaction with some very complex parts. It's easy for me to go back and say, if I knew what would transpire over the next two years, would I go back and do something different, I think that's an obvious answer. But the fact is, based on the data we had at the time and all the hard work we put into it, there was no way to see what actually happened. As you know, it didn't start to show up in the data from our customers for almost a year. This wasn't like we had a yield problem and three weeks later people were having problems with their consoles. It's one of those things that nobody is proud of. On the other hand, we are in a complex technology space. You learn from it. You do the right things to make sure it doesn't happen again. The best thing you can do is tell your customers you want them to keep enjoying the product and here is what we will do on replacing it for free.
* Q: What is your expectation for the timing of the next console introduction?
* A: The last cycle for the original Xbox was a little shorter than typical (at four years). We started way late. Sony launched in Japan in 1999. We launched in the U.S. in 2001. They are still selling PlayStation 2s. You see cycles are lengthening and the ability to have overlapping consoles in the market is growing. For a long time, after Sony shipped PS 3, PS 2 was outselling it. It helps when you have a portfolio business.
* Q: Do you want to be first with the next one, too?
* A: Too early to tell. Our view is we will be selling Xbox 360 for a long time. We are always working on new technologies. We have people working on those. People ask me how many people I have working on the next generation. On the one hand, it's everybody. On the other, it's nobody. People are continuously working on new technology.
* Q: Hitting profits was important here. Do you have a target for profitability over the life of the cycle? What is looking better and what is looking worse about the business model for the Xbox 360?
* A: There isn't a specific dollar number. Partly because we don't know where the cycle will end this time. Being profitable in the first few years is certainly a milestone target for us. Another is being profitable for the rest of the cycle. Xbox Live has been financially more successful for us. Having written off a billion dollars in hardware costs, that part of the model is worse than we expected.
* Q: How do you size the number of internal game developers inside Microsoft? Sony has been shedding a lot of people. You lost a lot of studios.
* A: They went on an acquisition spree for a while. Then they decided they over-turned the dial. We bought Lionhead more than a year ago. Those things go in waves. With Bizarre, it wasn't ours to keep. Someone decided to buy them. Prices got too high for the developer acquisitions. Economics plays a role. If you look at the transactions of the last 12 months, those multiples didn't make sense to us. We sat on the sidelines a little bit. Then you have a transaction like Activision-Blizzard-Vivendi. I'm not even sure I can calculate the multiple on that. That's a very big transaction and an exception.
[/QUOTE]
Full Story: venturebeat.com
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