Microsoft's Shane Kim

It wouldn't be an international press event without an opportunity to grill a Microsoft executive on Xbox 360's performance, and the Spring Showcase contender was Game Studios corporate vice president Shane Kim, who believes the console is in for another "landmark year".

Speaking to Eurogamer at the event in San Francisco, Kim also talked about the battle with PlayStation 3 in Europe (in which Sony recently claimed victory), Microsoft's attitude towards Japan and handhelds, and how Gears of War 2 is likely to fare in end-of-year battles with PlayStation 3's expanding line-up.

Having established Cliff Bleszinski and Kudo Tsunoda's views, we also discussed the scale of badass and the role of badassitude within Microsoft. Important stuff, see. Read on.

Eurogamer: What's the message you're trying to communicate with today's Spring Showcase event?

Shane Kim: We're really trying to communicate that this will be another landmark year for Xbox 360 customers and Xbox Live. Mainly because we've really focused on a strategy of exclusive content, so titles like Gears of War 2, Fable 2, Banjo, etc. As well as the continuing leadership we have in the online space with Xbox Live. So we wanted to make sure that, even though we had a great 2007, 2008 is going to be an even better year for Xbox 360.

Eurogamer: Where do you think Xbox 360 is now in the console race? There appears to be some confusion about whether PS3 has outsold it in Europe...

Who's winning?! Is it this one?!

Shane Kim: I think it's a close race no matter what. I understand the Sony guys have declared leadership already. I think we'll let the data speak for itself. The main thing to emphasise is, it's a tight race in what has already been a Sony stronghold. So any progress we're making there is great progress, from our perspective.

I just look at the two data points I mentioned this morning. Since we reduced the price of Xbox 360 in Europe we've seen tremendous sell-through run-rate games as well as market share games, as a result of that. Then with the launch of Grand Theft Auto a couple of weeks ago, obviously this is the US, but the same thing is happening a lot of places in Europe - the biggest games retailer in the US announced today that 65 per cent of Grand Theft Auto units were sold on Xbox 360, versus 35 per cent on PlayStation 3. That's traditionally been on the PlayStation franchise. So we feel really good about the momentum we've been able to generate, especially recently with both the price reduction and the launch of Grand Theft Auto. Then you combine that with our online leadership and our great content line, and we feel very good about the prospects.

Eurogamer: One territory you appear to have lost the battle in is Japan. Do you accept Xbox 360 just hasn't taken off there?

Shane Kim: You don't think we're going to win in Japan?

Blue Dragon - part of a better approach in Japan, says Kim.

Eurogamer: I'm not optimistic, no...

Shane Kim: Look, we've acknowledged for a long time we wouldn't win in Japan and it was going to continue to be a tough market for us. We took some different steps in this generation. We produced two very well critically reviewed titles in Blue Dragon and Lost Odyssey. Unfortunately, it remains a difficult market for us.

Eurogamer: So are you saying the battle's not over?

Shane Kim: I'm not going to go out and say our hope is to win in Japan, because that's not realistic. Do I think we have room for progress and improvement? I absolutely do. So the battle's not over. Microsoft generally doesn't have 'Quit' in its vocabulary. So whether it's Europe or Japan or North America, there's still a lot of work ahead of us.

Eurogamer: When you look at the success of the DS and the PSP, don't you wish you'd gotten in on the handheld market?

Shane Kim: I'm very happy we didn't get into it, because launching a handheld platform is like launching another Xbox 360. You have to be fully committed, as an organisation, from a resource standpoint, to doing that. Frankly we've got a lot on our plate with Xbox 360 and Xbox Live. We don't have any experience in that space. Our content assets don't naturally lend themselves to driving success in that particular market. So we're happy to let Sony and Nintendo slog it out. I do think mobile is probably the more important platform in the future, and the number of Windows mobile devices and hardware that's capable of running Windows mobile in the future is really a compelling opportunity, and one where we don't have to worry about launching a new hardware platform too.

Eurogamer: What about the rumours you're going to do a Wii-style motion-sensing controller?

Shane Kim: Just rumours, just rumours. We don't...

Eurogamer: Comment on rumour and speculation.

Shane Kim: See, the standard answer. No, what I would say is that we have a tremendous amount of R&D efforts going across the programme - not only in hardware but in content and the online services too. I'm very proud, actually, of the success we've had in the hardware, accessories and peripherals area. It's been a commercial success for us, a great business.

We've also had a lot of critically received pieces of hardware. So I think it is fair to say we're always going to continue to push our innovation in the hardware space, just as we are in the software space. But what form that will take, what technology that will really emphasise... I do think that would be a mistake, if we just tried to come out and copy what Nintendo has done. What Nintendo has done has worked well for them, but we have to think about what our innovation aspect is going to be.

Scene It's innovation was wireless controllers, says Kim.

Eurogamer: But you have been accused of copying in the past - at looking at others' successes...

Shane Kim: Where?

Eurogamer: With Scene It!, for example. Scene It! was a very similar thing to Buzz!...

Shane Kim: Sure, sure. I do think it depends on the category too. While I do think there's room for improvement and innovation and trivia-based experience, I do think there are some fundamentals of that experience too that are going to look very similar. The fact we included four wireless controllers in the box, I do think hey, that's somewhat innovative in that space. Now you don't have to deal with the rats' nest of the wiring.

In the future, I think online will be a more differentiating aspect for us. Each of the competitors has its own unique approach, and those approaches have strengths or weaknesses. Nintendo - physical play. Sony - emphasising Blu-ray. And for us obviously, it's online. I think online is going to be where you see most of our differentiation efforts emanating from, whether it's online experiences or continued distribution of digital content and soforth.

GTA IV. It seems to have done alright, but they don't like to shout about it.

Eurogamer: The Grand Theft Auto IV downloadable content is of course a big thing for Microsoft. But Sony boss David Reeves has said we'll see it on PS3 eventually...

Shane Kim: Really? Well, maybe he knows something we don't. Until I hear that from Take-Two I'm not going to believe anything that Sony says. We feel very confident in the exclusive content we're going to get for Grand Theft Auto IV. I think that's a big contributor to the inital success we're seeing on Xbox 360. The fact that almost two-to-one people are buying Grand Theft Auto on Xbox 360 versus PlayStation 3 speaks volumes. I think a large part of that is because they understand we're going to have additional content to complete the Xbox 360 later this year.

Eurogamer: You've also got a platform exclusive with Rock Band, at least for a limited time in Europe. There's been a big furore about the price - it's equivalent to USD 360 for us to get the whole kit. European gamers are saying, why are we being shafted here? Why do we always get things late and why are they so much more expensive? With Rock Band, there's a more than 100 per cent mark-up - how is that fair?

Shane Kim: Honestly, I can't answer that, it's not my product. It's distributed by Electronic Arts and best to ask them, because I don't know the answer.

Eurogamer: But you obviously had a say in the deal of making it exclusive to Xbox 360 in Europe...

Shane Kim: Yeah, I think we have a marketing partnership with them where that's a good thing for us. But we would not be involved in setting the price of the product, right? We've had exclusive content in on our platforms before, and there's been no differentiation in pricing. As far as simultaneous release of product... I can only speak for Microsoft Game Studios, but that's been a big priority for many years. I can't remember the last time we had a release that was not virtually simultaneous with Europe.

Eurogamer: But do you think it's a fair statement to say Europe generally gets things later and more expensive? The movie store, for example, took a lot longer...

Shane Kim: Yeah... On the one hand I'd say Microsoft feels bad about that. On the other hand it is fairly complex, actually, to secure rights in many different markets. I don't have enough appreciation for that because it's not my part of the business, but what the Xbox Live guys have to go through to get the rights and then to ingest all that content... I do understand. The reality is it's getting there later, but it's not as simple as localising the title. I'm glad I don't run this part of the business because securing the rights to that video content is a pretty heinous effort. It's pretty challenging. So that explains some of the timing delay.

Eurogamer: With regards to today's Spring Showcase, Gears of War 2 is obviously a Really Big Deal. This year it's going up against Killzone 2 and...

Shane Kim: Not this year.

Eurogamer: Sorry, yes. But when Gears 1 came out, there wasn't really a direct competitor on PlayStation 3. Now Killzone 2's coming, Resistance 2's coming...

Killzone 2 - running scared, if you ask Kim. Well, he didn't say that, but you could see it in his eyes.

Shane Kim: They launched with Resistance and we've sold nearly 5 million units of Gears of War 1. I think we won that battle. That's why I believe it's going to be the biggest title this holiday. Killzone's out of the holiday, despite some of the earlier statements that were made. We'll see what happens with Resistance 2, but we've gone head-to-head before. I still feel very confident in the quality. You're seeing it here - what Epic is doing with Gears of War 2 is taking a very good title and really extending it even farther, in my opinion. So I still think we're in very good shape to have the biggest hit of the year in the holiday.

Eurogamer: CliffyB has said it's bigger, better and more badass than Gears 1.

Shane Kim: Yep.

Eurogamer: As we've been touring the Spring Showcase today we've been trying to establish on a scale of one to ten, how badass is Gears of War 2?

Shane Kim: That's actually a better question for Cliff.

Eurogamer: He said 12.

Shane Kim: [Laughs] Well, that's Cliff's maths, so what can I say? It's better for the creators to talk about what they're feeling is on the topic. I will say this: I think we all challenge ourselves. Epic really took the challenge on. Look, we don't just want to churn out a sequel.

Gears of War 2 has a lot riding on it, but fortunately it's extremely badass.

Eurogamer: You want a more badass sequel.

Shane Kim: We want a more badass sequel, right, whether that's 12 or 11 or ten. We just want it to be more...

Eurogamer: Badass?

Shane Kim: I think if you look at most if not all the titles we've done, we've created franchises and then launched future sequels. We've always tried to take the approach that the sequel has to be better than the previous version. Whether that's Halo 2 or Halo 3, Forza 2 or Fable 2 and what Peter [Molyneux] is doing with that - and again what Epic's doing with Gears of War 2... I'm not sure you'd say Forza 2 was more badass than Forza 1, but that is our general philosophy when it comes to sequels. We're not trying just to churn those out and milk the franchises,

Eurogamer: Do you have a sign above your desk, 'Make things more badass'?

Shane Kim: No. I prefer to communicate that orally.