For as much flak as Peter Moore got while leading the Xbox 360 team, it’s hard to deny that his penchant for adorning his arms gave gamers a couple of very memorable moments. I mean, before Peter Moore’s E3 2005 stunt, had you ever seen another executive get a (fake) tattoo for a key franchise (Halo)? And then, not to be outdone, walk into a second E3 with another (fake) tattoo for another franchise (GTA IV)? Seriously, Moore was Microsoft’s biggest publicity whore, and he did a dang fine job of it.
But beneath all his excitement lay a few key lessons about Microsoft. For one, the company understood that without a killer exclusive like Halo, the Xbox brand simply wasn’t strong enough to justify its R&D expense. That understanding is a key reason that before Knights of the Old Republic came along, the Xbox was playfully known as “a Halo adaptor for your TV.” With Xbox 360, Microsoft needed to march onto its next achievement: stealing the “exclusiveness” of the Grand Theft Auto series from Sony. So when Moore strode on stage at E3 2006 with a GTA IV tattoo and announced that Rockstar’s game would release “day and date” with the PlayStation 3 version, he was basically bragging like Bush when he said “mission accomplished.”
But not so fast, Microsoft. Last week Rockstar delayed GTA IV until at least February 2008, a move that quite literally could have stolen every single ounce of leverage you hoped to have. In fact, that announcement could have single-handedly put your very-real competitors, Sony and the PlayStation 3, in the driver’s seat in the GTA IV race, for three reasons.
First off, Microsoft paid $50 million for exclusive downloadable episodes for GTA IV, an unprecedented amount for content that the company presumably hoped would release during the holidays and drive Xbox 360 sales. Well, now Microsoft has not only dropped $50 million for yet-to-be-determined content, but the company has lost all hope of that content boosting holiday sales, because GTA IV won’t even be in stores until late Q1 or early Q2 next year.
Secondly, with the delay of GTA IV until after the holidays, Sony has more time to boost its PS3 install base, which, depending on sales, could entice Rockstar to create exclusive downloadable content for that system as well. So, not only does the lack of holiday-released episodes mean Microsoft could fail to widen its install-base gap, but the company could actually see Sony close that gap once GTA IV comes out, because after the holidays Sony could have the critical mass to justify special episodes for the PS3.
Third (and most speculative), Sony could see a PS3 sales boost because Microsoft is shooting its first-party wad early. Rumors earlier this year said Microsoft strategically chose to release Halo 3 in September to appease Rockstar and not give GTA IV any direct competition on the Xbox 360’s sales charts. November has been Bungie’s sweet spot for Halo release dates, so September always seemed early; with this GTA IV rumor as context, the Halo 3 release date made much more sense. But with GTA IV now delayed, Halo 3 (if it doesn’t end up being delayed) will release two months before the holiday shopping season really kicks off, thereby enabling Sony to come out of the Turkey-Day gates with a stellar first-party lineup.
To say GTA IV drives console sales is akin to saying B.B. King can play the guitar. So with Microsoft banking so much on those exclusive episodes, not to mention GTA IV releasing at a time when the Xbox 360 holds an install-base lead over the PlayStation 3, Rockstar’s announcement couldn’t have been any worse. Does the delay favor Sony and its PlayStation 3? Not necessarily. But it surely doesn’t do anything but harm to Microsoft’s holiday-release strategy.
If Peter Moore were still at Microsoft, I have a sneaking suspicion he’d be seeking out a tattoo-removal specialist. Because today, that enthusiastic showing two E3s ago that his “mission” was “accomplished” now looks like a 20-something inking the name of a one-night-stand on his bicep.
— Jonas Allen