"We will blow past any first-day opening movie that's ever been recorded," said Peter Moore, global marketing chief of Microsoft's Xbox, predicting big things as Halo 2 was released.

He was right.

Halo hit some $125 million in sales on its first day, according to Peter's own post-opening estimates. That made Halo 2 bigger than the opening weekend of Pixar's Incredibles, which at $70.7 million was Disney's biggest three-day opening ever.

"A game like Halo 2 really symbolizes the power of videogames to drive consumer passion, and, quite frankly, a call-to-action to retail unlike anything else," says Peter.

In fact, Halo 2's opening day was even bigger than that of Spider-Man 2, at $116 million the record-holder for the biggest first-day box-office.

Even bigger than The Beatles?  Well, yeah. Yeah, yeah.  As it happens, Peter was born in Liverpool just about 50 years ago.  He first arrived in the United States as a soccer player in the mid-70s, playing in Cleveland and the Midwest in the old American Soccer League. He moved to America permanently in 1981, taking a job with Patrick Patrickson, a French soccer shoe company, starting off as a salesman and eventually becoming president of the company.
 
Then he was recruited by Reebok, initially to get them into global soccer, and then morphing into a bigger role running global product marketing, as well as global sports marketing, as senior vice president of sports and product marketing. So, Peter was going head-to-head against Nike, signing the likes of Venus Williams and Alan Iverson to endorsement deals.  
 
With a yen to return to the West Coast, Peter's next stop was Sega, where he started out as senior vice president, but within about seven months was president of Sega of America, launching the Dreamcast.   Along the way, he developed a certain rapport with the team at Microsoft: "I had a great regard for the work that they were doing on Xbox development in particular," says Peter, "because of their online development which dovetailed into what I had always dreamt would be the next step that the Dreamcast platform would take."
 
Peter joined Microsoft as corporate vice president of worldwide marketing and publishing for Xbox in January of 2003, and has been there ever since.




Are there any lessons from your time at Reebok that you are now applying at Microsoft?
 
Very much so.  One of the bigger challenges we face right now is that we're dealing with a consumer who plays hide-and-seek with brands, and who is very difficult to get to.  That’s the 14 to, let's say, the 28-year-old male -- very much a similar demographic to what we had at Reebok.  We were looking for ways to be relevant, pertinent, to be, quite frankly, "cool" to that consumer.
 
At times we were successful and at times we were a little less successful. The ability of this consumer to embrace what your brand stands for is a very fleeting opportunity that needs to be grasped. There are companies that are able to do that and sustain and maintain their "coolness" for years on end.  Then there are other companies that have it in their hands for a few moments, but then do something to disenfranchise themselves with the consumer, and are no longer cool anymore.
 
Certainly, you can count the former on one hand and you can count the latter in the hundreds of brands that, I think, are like meteors -- they just streak across the sky and burn brightly for awhile, but then they just end up in the New Mexico desert somewhere.
 
You've said that your vision of the future of gaming is online.
 
Yes. We truly believe that gaming is no longer a solitary experience.  Microsoft certainly is in the vanguard of that idea.  Multi-player gaming from the console into the living room with two or more players playing, connected to each other, has been a development that we have all enjoyed in the industry in the last three or four years. But more recently, in the last two-and-a-half years or so, you've seen the growth of online gaming as a real -- I wouldn't say a mainstream -- activity amongst gamers, but bordering on something that people start to expect in their gaming experience.  They start to enjoy reaching out to play with anybody anytime.
 
So, we've now built up the Xbox Live service to include 24 countries, and have more than one million paying subscribers at this point, with growth plans to increase that by another 50 percent this fiscal year. We really truly, honestly believe that this is the future of gaming. There will be a situation, in a couple of years from now, where an off-line game experience will seem awfully hollow. That is something that we are marching towards very aggressively, as you can see with the way people are embracing Xbox Live.
 
How does your marketing strategy support that vision?
 
Well, it's really with the content.  It's with the experience of the games. It's no good having the service and building out all the data centers and the incredible investment we're making in time and people and dollar resources, if we don't deliver the experience that people actually want to have online. We have certainly been able to prove that out with games such as, for example, in our Microsoft Game Studios, with Project Gotham Racing, and with our partners -- Ubisoft being one that jumps to mind, and also in the early going, with games like Ghost Recon, which were very, very successful. 
 
As we go forward here you're going to see almost all games have some kind of an online element -- whether it's the ability simply to look at scores, or as huge as massive, multiplayer games, where thousands of people could be playing at the same time.  That is the continuum that we see online, but all games going forward will have some ability to go up to a server and either bring down information or send up information. It'll seem weird if a game is completely off-line in the future.
 
Is your strategy different in Europe than it is in North America?
 
Only in terms of the content that actually pulls people together. One of the things we most recently announced, and that we're very proud of, is our relationship with FIFA, which is the world's governing body of soccer. There are very, very few things that span countries, borders, and continents like soccer. In fact, there is probably nothing else that does it from the point of view of passion for competition that is in a single language that everybody understands, even in the United States.
 
So, we've partnered with FIFA and Electronic Arts, which makes the FIFA official game, to have the FIFA Interactive World Cup, which commences actually this month. It starts out in South Africa, and then we're having a number of tournaments all around the world that will culminate in December at the FIFA World Player of the Year Gala in Zurich.  At the same time that they crown the world player of the year -- the best soccer player in the world -- they'll also crown the best online player in the world. This is just one event that culminates all the way through these competitions to the 2006 World Cup finals in Germany, of which Xbox is the official console.
 
We are trying now to globalize our marketing message, something that has never been done in our industry before.  Typically, the marketing message has been regional, if not local. Now we have this incredible vehicle called Xbox Live, which gives us the opportunity to speak with one voice to a consumer, whether in Beijing, Bangkok, or Barcelona.
 
Nice alliteration there.
 
Today it's a "b"... some days I come up with a "c" ...  "b" just seemed most relevant today!  Certainly soccer was one area we felt required no translation, no real localization and no explanation of the rules.  It crosses all boundaries, all continents, and the ability for someone to play a game against somebody else 5,000 miles away -- the identical game and they both totally understand what's going on -- it's an incredible experience. Having already done it myself -- it blows me away.
 
So, that and some other media deals that we haven't announced yet are great examples of the things that we're trying to do to globalize our message so that when you get off a plane anywhere in the world you feel that Xbox has the same positioning, the same statement to the consumer, and stands for the same things. Typical to our industry, it's been very, very regionalizing. You can even see different taglines depending on which continent you're on.
 
You've hit a little rough patch in Japan. Why is that?
 
Well, we've issued mea culpas weekly. I was just there two weeks ago giving my latest mea culpa. We made some fundamental errors -- which we're very cognizant of, and don't hide behind -- on some industrial design and some content strategy.  As a result, we got off to a very rough start, and the Japanese market is somewhat unforgiving. They are very, very quality-focused consumers -- perhaps the most quality-focused in the world -- particularly in regard to consumer electronics. 
 
Our launch was less than stellar in the areas I've just mentioned, and it's difficult to recover. However, we've been doing a tremendous amount of work to make sure that when the next generation arrives, that Japan is a very, very important part of the next generation for us. I can guarantee we won't make the same mistakes the second time around. We're a company that's pretty good at getting it right, if not the first time, certainly the second time.
 
You've said the launch of Halo 2 would be as big or bigger than that of any movie. How will that play out?
 
Right now, our latest count at midnight November 8th, we're looking at 6,800 stores in America that will open up at midnight to allow "Halo Nation" to get their hands on the first copies of Halo 2. Our pre-sales have been absolutely phenomenal. There are ostensibly hundreds of thousands, if not millions, of people who will want to have their hands on that game to go to school or work the next morning, to say -- look I've got it! … Or not to go to work … or not go to school … There is also the theory that it could be one of the bigger flu days of the year as well!
 
Particularly as it's, of course, Xbox Live, in which as many as 16 players can bang at each other in open warfare -- that is just the trademark of Halo. When we look at where our place as an industry lies within the other broad-based entertainment industries, a game like Halo really symbolizes the power our medium has to drive consumer passion, and, quite frankly, a call-to-action to retail unlike anything else.
 
We've started to compare ourselves to box office receipts day one, and our projections are realistic that we'll blow past any first-day opening movie that's ever been recorded. Obviously, we'll have to wait and see how they bear out.   And the music business, with the problems that it's been having, any first-day CD sales pale in comparison to a first-day major videogame of the magnitude of Halo 2. Videogames seem to be outstripping just about anything else that's out there right now.
 
But there's more to the launch than just making it available.
 
Yes, we've started to tease in print using Master Chief, who is the icon, the savior, as always. He'll be in some double-page printouts, primarily in gaming publications. There are also 60, 30-second network and cable-TV executions of commercials that will start exploding Halo 2 into the pop cultural phenomenon -- not just the video cultural phenomenon -- that it's building up to be. Then everything will culminate at 12:01 a.m., on November 9th.  I'll be in Times Square, where the entire Toys R Us store will be turned into a Halo store. We will be giving the first copies of Halo 2 out to consumers, and I have no doubt we will be clogging Times Square at that point.
 
What makes Halo 2 so special?
 
The combat, the storyline, is so deep. Fundamentally, at its core, it's a classic story of Earth (or humankind) being attacked by outsiders. In this case it's aliens. The way that the combat takes place -- the storyline behind what's going on here between Earth and the bad guys (known as the Covenant) -- is phenomenonally deep, to the extent that we've already sold novels that give the backdrop to the story and take the story into different places than the game goes.
 
If you've ever had your hand on the control and played Halo multiplayer at a Local Area Network (LAN) party, where you actually link as many as four Xboxes together on multiple TVs, you'll know what I mean.  Up to 16 guys can go at it by putting their controllers into ports, and off they go. These sessions can last up to 10 hours, nonstop, where you play games, try to capture levels and defeat the invading army. It's fascinating stuff, it really is.
 
Is there any product placement for the game?
 
No. This is a science fiction story told at an undetermined time in the future, and as such, we've determined that there is no product placement that would be relevant to the gaming experience. That's the important part. While there are games where we do either in-game advertising or in-game product placement, those are genres that call out for product placement that are relevant to the game experience -- billboards on streets, or TV adverts, if you will.   Primarily, when we look at those types of genres, it's racing games with billboards and products that you would expect to find in real life.
 
How has the development of games changed over the years since your days at Sega?
 
It certainly has gotten a lot more expensive! Gamers are expecting more and more.  They're expecting deeper, immersive, richer storylines, fuller character development, a game played at 20, 40, 60 hours of unique game play, and replay value (i.e., even if you finish the game you want to go back and do it all over again). Online gives further extensions, and developing games so they're playable online is another set of technical riddles that have to be overcome.
 
When you think of the quality of graphics in this latest generation (which is probably the third generation of games for the Xbox), and we look back to even the first generation -- certainly to the original Dreamcast, PlayStation and Nintendo 64 days -- the visual, graphical, change is huge. Treating games with high definition is going to be even more expensive.  But games must keep pace with the technological expectations of the consumer, particularly the gaming consumer, who tends to be a little bit savvier than the average consumer. And if that is what it's going to take, then that is what we're going to give them.
 
You have 1,500 people in your department. How do you keep them all on the same page and motivated?
 
We have a very creative vision for the product -- a very creative vision for what Xbox stands for versus the competition. There is a subculture that's developed within the Xbox group that's a little different than the Microsoft culture, which is, in itself, very strong. We have a different physical location. We're still in Redmond, Washington, but away from main campus. We're totally focused on creating great games and supporting them with great marketing and making sure that consumer satisfaction levels are at unprecedented highs.
 
We see our consumers as partners in this enterprise, and we do nothing to let them down. The quality of what we do, and the quality of the support we provide if things go wrong, is really integral to the way we operate.  It's a little different than the regular Microsoft culture, but certainly driven by the same core elements of making a difference and that's certainly what we believe we do in the video game world.
 
The gaming culture clearly is very different than what one would think of, in terms of the Microsoft culture, which is somewhat corporate. From a branding context, how do you reconcile that?
 
Well, one of the things we have reconciled is that the Microsoft brand does have some very core attributes that gamers look for -- the ability to drive the difference with great software. We're in the software business here, and while the great majority of people think of Microsoft as productivity software, or information software, we're in the entertainment software business. But at its core, fundamental, basis, what we try to do is make a difference with our software, and really start to realize people's potential.  We look at ways to be able to drive a similar message with games.
 
Games like Halo and Project Gotham Racing are just the tip of the iceberg in terms of things we've done and that we're going to be doing. But we're also very cognizant that we need to have a brand that can stand on its own two feet.  The Xbox brand didn't exist three years ago, and many people now would argue that it's a core part of popular culture. You say, "Xbox," and a great majority of people know exactly what you're talking about. That's a fundamental achievement. To be able to do that with that very difficult, very cynical, male consumer has been no small achievement.  And to do it on a global basis on top of that, where our recognition scores around the world are incredibly high for the Xbox brand, I think is an incredible achievement and something we intend to build on as we go into the next generation battle.
 
Is Bill Gates a gamer?
 
Bill, interestingly, is. He is more of a racing gamer, so Project Gotham has always been the game that he enjoys. The first time I went to his house, I was stunned to find an arcade machine in his front lobby, a racing arcade machine. Bill keeps a very close eye on the business, and enjoys playing the games.  He would probably tell you that he's not a very accomplished gamer, but like most people, enjoys playing the games and certainly there are three or four of them he can hold his own at.
 
Did he know about the tattoo that you were wearing at E3?
 
Ah, after the fact! (laughs). Yes, that got a lot of coverage at E3, obviously, and we did share with him and Steve Ballmer the coverage we got.  Obviously, they're keeping a very close eye on what's going on. So yes, for better or worse, they're both very aware of what happened at E3.
 
Why did you wear the tattoo?
 
Halo 2 has been an incredibly, eagerly-anticipated game, and like a lot of games that are huge and eagerly anticipated, the studio wants to get it right. There were some delays from the anticipated launch date -- not that we announced the date and slipped it, but the anticipation was that it might come a little earlier in the year. So as a sign of commitment that it was going to ship on November 9th, we did this press conference where I said that since our sales guys don't believe it, the only way to prove it was to tattoo it on my arm!
 
Why did you pick that date -- November 9th -- any particular reason? And is there any magic to a Tuesday release?
 
We felt from a pure 'get it to the consumer before Thanksgiving' timing that an early November date was important.  Tuesday, for U.S. retail, is very important. The great majority of all music -- actually all entertainment media -- ships on a Tuesday. It's always been the ultimate day for retailers to get product into the stores and for the suppliers to replenish the stores, after the first or second day, once we get a real good feel for the velocity of sales.
 
Depending on the retailer, if we are as efficient as we usually are, we can actually replenish stock by the following weekend.  It also allows a certain amount of fair play to all retailers. If, for example, Friday were the day, some of the bigger retailers would have a great deal of difficulty in getting on the shelves in the stores because it's getting close to the weekend. So, this pre-dates the video game business. It dates back to the music industry when they shipped albums.
 
What do you see ahead for Xbox?
 
This is an exciting time for the industry. I realize a lot of the folks who read Reveries are marketers, and while they may have a certain fascination about videogames, they sometimes might feel like they're peering in through a foggy window and trying to figure out what's going on. This is very much a mainstream situation at Xbox with regard to what videogaming will be about in the future. And, of course, there's a bigger play here as well -- that is, what entertainment overall is going to look like in our living rooms over the next four or five years. We truly believe that videogames will be a core part of that entertainment experience.