-------------------------------------------------------
For 2009, Microsoft is playing coy, perhaps a bit more than usual. The company has confirmed very few exclusive Xbox 360 games for 2009, presumably holding tight for high-profile game events such as E3 or this week’s GDC for big game reveals.
Sony, on the other hand, has been touting its 2009 first-party lineup from its large stable of internal studios for a few months. Microsoft has only announced exclusives like Halo 3: ODST and the mainstream online game 1 vs. 100. Alan Wake is still under development at external developer Remedy, and the first-party Forza Motorsport 3 is all but official—Microsoft still files the racer in the “rumor and speculation” category.
But keep in mind that the biggest Xbox 360-only game of 2008 was November’s Gears of War 2, which was officially announced only months prior to release at February 2008’s Game Developers Conference. Something more is cooking at Microsoft for 2009.
“For me, I want to know the game I’m talking about when I’m talking to customers. I’m not going to announce a game with a billboard and say, ‘Here’s a game.’ I don’t like doing that,” says Phil Spencer, general manager at Microsoft Game Studios. “I want to understand what we’re shooting for. … I think people will begin to see a very strong lineup across platform and content for us.”
Microsoft’s exclusive lineup for 2009 started with what would be the swan song for former internal developer Ensemble Studios: Halo Wars. Microsoft announced last year that the studio, which created the Age of Empires series, would shutter. Subsequently, the real-time strategy console game went on to break 1 million units sold in less than a month, a fitting finale for the respected developer.
While not a full game, Microsoft claims to have hit an Xbox Live download record with the release of Rockstar Games’ $20 Grand Theft Auto IV add-on The Lost and Damned, the first of two exclusive expansions that come from a special partnership between Microsoft and the developer. Microsoft reportedly paid a $50 million advance to Rockstar to seal the exclusive deal.
It’s those kind of big exclusive partnerships with external developers that Microsoft has been increasingly reliant upon. With the axing of Ensemble, Shadowrun developer FASA and the spin-off of Halo house Bungie into an independent, Microsoft is left with relatively few internal studios to create exclusive games. But the studios that remain are full of talent, and capable of developing hit franchises. There’s U.K.-based Lionhead, which released the critical and commercial hit Fable II last year; Rare, which is behind the Perfect Dark series and recently released Banjo Kazooie: Nuts and Bolts; Forza Motorsport house Turn 10; Wingnut Interactive, which is actually a partnership between Lord of the Rings film director Peter Jackson and Microsoft; and Xbox Live Productions, which specializes in games for Microsoft’s online service.
Spencer claims that dropping internal studios ensures that Microsoft is placing dollars in areas of growth and innovation. “It’s not like we’re not doing this to somehow build … franchises more cheaply, it is about making sure that we have the right resources in the right places to bring on innovation that we think defines our future.”
Sony, on the other hand, has about three times as many internal studios developing games exclusively for PlayStation platforms. But by brokering exclusive publishing deals with external developers, Microsoft (which ironically is a company founded on software development) has been able to effectively compensate for its relative lack of internal game studios. The company still has very close ties with Bungie and Gears of War developer Epic Games, as well as iNiS, the respected Japanese music studio behind the karaoke game Lips, which headlined Xbox 360’s mass market push.
But don’t call those external developers “third-“ or “second-party.”
“I know it’s kind of industry terminology, but we view all of the games that MGS publishes as first-party games, regardless of whether it’s Epic, Ensemble, Turn 10 or Bungie,” says Spencer. “If a game comes out with our logo on the box, it’s a game that we feel like we’re completely committed to.”
For Spencer, the business has less to do with who has the most internally-developed games. Having an exclusive deal with an external developer brings about the same results. “It’s about working with the best talent in the industry, and not necessarily the structure of how you work together. Our work with Epic, as an example, feels no different to us than our work with Turn 10, which is a studio that we own, doing some game—some racing game.
“It is about us finding the best talent in the industry, building a working relationship that we think delivers the best content, and that strategy has been successful for us. There’s no preordained number of studios that we have to own or not own at any time. It’s about the portfolio that we have.
“There’s no formula running in Excel that says how many people we have to have who are badged ‘employees’ versus ‘partners.’”
By any means, Microsoft knows that exclusives are important pieces of the puzzle in today’s console business. “If we ever said we have enough exclusive franchises on our platform, we would just be naïve.”