GI.biz: Microsoft - The Moore Years

When we profiled former Sony Computer Entertainment boss Ken Kutaragi back in April, little did we know that he would only be the first console figurehead to step down this year. But Peter Moore's resignation from Microsoft this week could not be more different to Kutaragi's exit.

Kutaragi, a life-long Sony employee, suffered a lengthy fall from grace and was offered up as a sacrifice to appease unhappy shareholders. No such fate for Moore, whose four year tenure at Microsoft is generally considered to have been a success despite many tough challenges - and who jumps from the firm into one of the most coveted positions in the industry, as head of franchise juggernaut EA Sports.

The former SEGA of America executive, who had presided over the ill-fated launch of the Dreamcast in North America, was reportedly courted personally by Microsoft's CEO Steve Ballmer for the Xbox job in 2003.

His experience was in stark contrast with the executives running the Xbox business up to that point - executives like J Allard and Robbie Bach, whose enthusiasm for the platform was unquestionable but whose experience of the games industry was minimal.

Moore quickly established himself as a key figurehead for Xbox - but in publicity terms, this was far from a smooth road. Console figureheads are expected to be showmen and entertainers as much as shrewd businessmen, and their appearances at events like E3 define their firms' approach and strategy.

On this front, both Microsoft and Moore faced a significant learning curve. The much-derided "Three Amigos" performance at E3 2005, which saw Moore, Bach and Allard sharing the stage and seemingly desperate to outdo one another in the trying-too-hard stakes, was a low point for the image of Xbox.

An ill-advised (if laudably honest) decision to show work-in-progress game footage of 360 titles, rather than target renders, also left the company's new hardware looking anaemic next to Sony's newly announced PS3.

However, just as the Xbox brand has often been lauded for listening to its consumers and being willing to learn and change, Moore (and, presumably, an extensive PR and marketing team) also learned very quickly from such public mistakes.

Within a year, the format for Microsoft's E3 showcases was radically overhauled. 2006's one-man show, with Moore as host, was a slick, intelligent, conservative and almost humble affair which won over critics and gamers alike.

In interviews, too, Moore transitioned from the kind of aggressive, arrogant attitude which Xbox executives like Allard had previously exemplified to a much quieter, more confident approach. Asked about his main competitors' problems, he would praise Sony as a "great company" and express his confidence that they would "work it out".

On Nintendo, Moore eventually became effusive in his praise - while being careful to emphasise that the Wii was not a direct competitor to the Xbox 360. He even went so far as to suggest that consumers should buy a Wii and an Xbox 360, rather than a comparably priced PS3.

This canny handling of the press, both specialist and mainstream, has been a major factor in keeping the Xbox 360 in the news and in the public eye over the last two years. Unexpectedly, given his somewhat acerbic reputation at SEGA, Moore has turned out to be superb at public relations - a master at ruthlessly promoting his product and his company's vision while appearing at all times to be balanced, reasonable and even humble.

In political terms, if Moore joined Microsoft a mere politician, he leaves with the air of a statesman. In more practical business terms, Moore's tenure has seen the Xbox take important steps forward.

The signing of Japanese creators such as Hironobu Sakaguchi to work on the Xbox 360 is a vital move in expanding the appeal of the platform, as is the building of stronger relationships with key Japanese publishers.

The extension of Xbox Live to incorporate digital distribution sales for television series and films is key to building the Xbox into a home entertainment brand - and, of course, the launch of the Xbox 360 itself is an impressive achievement for any executive CV.

However, it would be disingenuous to suggest that all has been well at Microsoft's videogames business while Moore has been at the helm. Many reports in the last week have mentioned that his resignation comes only days after the firm finally admitted to systematic hardware faults in the Xbox 360 console, which will cost over USD 1 billion to remedy - an extra billion dollars on the already vast pile of money which Microsoft has lost on the Xbox venture.

I don't accept that there is a direct link between Moore's resignation and the Xbox 360 hardware faults. Moore himself has said that his new role at EA was agreed long before a decision was made on the hardware problems.

However, there are undeniably a number of other challenges facing the Xbox at the moment, and both Moore and his bosses at Microsoft may have felt that another executive is better equipped to tackle these challenges.

The greatest concern for the company is that, having launched the Xbox 360 and enjoyed a very solid first year, the console's second year in the market has been altogether less impressive. The Wii has certainly stolen some of its thunder, the PS2 continues to satisfy a vast area of the market, and several territories and entire demographics have been left wide open for the PS3.

Sales of the Xbox 360 appear to have hit a plateau, and questions are now being asked about the ability of the console to break out of the existing Xbox market - young male hardcore gamers in the USA and the UK - and start appealing to other age groups, to other territories such as continental Europe and Asia, to women, and to families.

Without expanding its appeal, the Xbox 360's sales are likely to top out at the same level as the Xbox - just over the 20 million mark, compared to 118 million and counting for the PS2.

This is the challenge which faces Moore's successor, Don Mattrick - and we don't think that it's any coincidence that Mattrick is resolutely a "software guy", having previously served as president of EA's worldwide studios.

The launch year of a console and the build-up to launch is all about hardware, and Peter Moore was the finest launch period executive Microsoft could have hoped for. However, 18 months in, the focus needs to be unrelentingly on software - and that, hopefully, is what Mattrick will bring to the mix.

Moore's tenure at Microsoft has seen the Xbox transition from being a plucky but frequently misguided newcomer in the console market to being a front-runner in the next generation race.

He leaves the business with enormous challenges still facing it. But the very fact that Microsoft is not only still in the console business, but is actually a strong contender in that business, is Moore's legacy.