Microsoft: "Perception," Not Us, is PC Gaming's Big Problem

Though it's currently trendy to declare the imminent and grisly demise of the PC gaming market, there are some legitimate concerns amid all of the sensationalism. Much-publicised NPD numbers showed retail PC sales slumping by $65 million between 2006 and 2007, while the console gaming market continues to burgeon year-over-year. While it's quite true that these numbers quantify only PC retail box sales and not subscription revenue - like how much WoW makes every month - there are issues at hand that are harder to quantify with raw data.

With steep hardware specifications, difficult and inconsistent installs, convoluted patching processes and unstable operating systems, the PC has developed a problematic barrier to entry for most consumers, who've voiced their difficulties in one crucial way — they've moved to consoles. So what will become of PC gaming?

Microsoft understands that the market has looked to it to save the PC gaming industry, says Kevin Unangst, senior global director for Windows Gaming. "There are more gamers on the PC platform than any other platform, and yet retail sales are going down," he adds. "It is a decline which makes us go, 'hmm... is there a problem here?' We saw an opportunity and an obligation. We are the platform leader; we own the platform. We need to make sure we do the right thing."

Unangst calls the last twelve months of Microsoft's Games For Windows effort "the first full year in the market." But the initiatives were announced just about two years ago, at E3 2006. Now, following a clumsy Vista rollout that sure hasn't appeared to be "the right thing" for gamers, and continuing issues confronting a broad adoption of PC as a gaming platform, what exactly is Microsoft doing?

According to Unangst, the PC market is actually growing; he says the struggle at retail basically comes down to the fact that PC gets second-class treatment in the public eye as a gaming platform. So, he says, most of the effort so far has largely come down to a branding campaign to address declining retail sales.

"We stepped up; we did a couple things," he says. "We looked at the packaging... PC games were in the back [at the store]and just looked like bookshelves rather than games. We addressed the retail issue by spending millions of dollars in retail in the U.S. and Europe to work with Target to move the PC gaming aisle out of the back and up next to the console games. And also at GameStop, where we worked in branding for not only the PC gaming section, but in over a thousand of their stores, Microsoft paid for and worked with them to install PC gaming kiosks. Those customers can be more engaged and try things out. No one had done that before for PC games."

Microsoft also created the Games For Windows branding program — pretty much, it's a logo on the box that lets publishers like Activision and EA sell their PC titles under the "Games For Windows" brand name without paying royalties.

Moving the shelves closer to the front of the retailer, offering kiosks and putting a stamp on the box might be marketing 101-type tactics to improve sales figures, but what has Microsoft accomplished since 2006 as far as improving the PC gaming experience? "It takes time," Unangst maintains. "When you look at things like retail and advertising and building up brand programs and impacting games in the process of shipping, it takes years of investment to start seeing that really show up."

And, he says, the Games For Windows branding initiative is more than just a logo on a package. "There's a set of 25 different tech requirements these games must meet," he explains. "The installation [process] , support for specific hardware, or if a game is running on Vista it needs to support Games Explorer... those types of things. It's all about raising the baseline experience, offering users an easier option... so you don't have to answer 17 quesstions to get the game to install."

But it sure has looked as if Vista and its Game Explorer are part of the problem, not the solution. Unangst doesn't agree, though. "We're very happy with the sales of Vista so far," he says.

So, when consumers are having widespread problems with gaming on their PC, the solution is a brand campaign aimed at raising sales numbers? And a large-scale public backlash against Vista is not a problem as long as the sales numbers are good?

"There is a curve," admits Unangst on the slow uphill climb towards broad and stable Vista adoption. He pointed to the operating system transitions of previous eras; Unangst has been with Microsoft nearly 18 years, and some of his first work was on the equally tricky Windows 95 launches. "When we moved to XP there were very similar concerns.... [about]expensive new hardware. Game developers and video card makers had to rewrite drivers for the operating system. We've now had Vista out for over a year; we've attacked this on a couple of fronts and it continues to get better."

What should frustrated users do, then? "We hope they will try Service Pack 1," he says.

He mentions the company's investment in DirectX 10 — but the support doesn't really seem to be quite there yet, does it? "The hardware install base is huge now," Unangst disagrees. "There are now some 60 million people that can run it. Would I have liked to have had it closer to the launch of Vista? Absolutely."

So, Unangst admits it would have been better to have the support closer to Vista's launch, but he's still pleased with the way Microsoft's PC gaming initiatives have been going. "We went to publishers, we've got the majority of top publishers signed up who've been delivering games... they've delivered some really high-quality AAA titles. These are big games that came out, like Crysis and BioShock and World in Conflict. These were some of the big award winners.

Crysis is hardly an example of a title that anyone with a PC can pick up and play, though. "Well, they've sold quite a bit of units," Unangst declares. "Crytek wants to push the envelope - and that's what's great about the PC. The common problems that people are seeing, we address. We're trying to solve actively... the requirements of getting it on your system. The other side of it that is just as important, is providing guidance to both developers and customers that say... there is a consistency that the game you buy will run on a particular piece of hardware. In Vista, we invested in the Windows Experience Index that is a simple way of communicating... especially when compared to the expectations consumers have for consoles."

The Experience Index, explains Unangst, assigns a certain number to your computer based on certain requirement capacities. But if you know your PC's number, can you then look at a box in the store and find out if the number, and therefore your requirements, match? Not yet. "It's on the way," Unangst explains. "The system is built into Vista... every Games For Windows-branded title is required to compute those numbers and make a recommendation, but we haven't seen broad adoption of this on packaging at retail."

So as of yet, unless you know hardware and software very well, there's no way of telling at a glance in the store whether you have the ability to run a given game. And while PC loyalists are savvy about their tech, what about a new and broader audience which might not even know how to find out which version of a Web browser they use? "Publishers have to put this on the box," Unangst admits. "Developers come to us and want to make a game that will ship in Holiday 2010 — and that's a year and a half out. One of the other efforts that Microsoft has been involved with is the PC Gaming Alliance, to try and address some of these broad industry problems... to forecast that [hardware]guidance so that developers can make an informed decision when they want to make a game that runs on the broadest choice of hardware, or make a scaleable experience."

That scalability, Unangst says, is the real strength of PC as a platform — but why does it seem that only cutting-edge PCs are appropriate for gaming? "We can do a better job of giving guidance to developers," Unangst concedes.

But according to Unangst, everything's going just fine for PC gaming. The widely publicised NPD numbers that raised the flag of alarm on the health of the PC gaming industry are actually a source of confidence to him: "When you look back to some of the [NPD]numbers for this year, just in 2007... more people in the US bought Windows games at retai l than they did for the Wii," he says. "It's 36 million units for PC games, versus 31 million units for wii. When you look at the numbers from DFC Intelligence, people spent more money on PC games, including online distribution, than they did on PS3 games in the U.S. in 2007. When I try to do an apples-to-apples comparison, surprising figures come out.

But when pressed, Unangst did identify the areas of concern on which he says Microsoft is currently hard at work. "It's the product issues we're working on... the installation needs to be easier. We need a consistent way... to have user IDs without different clients. People are unable to play with friends. These are the services we need to build and we're continuing to invest in. We've made great progress, but there's still more to be done - when you walk into a store it'd a carnival for the consoles. There's... all the demos and the lights and the great retail. Microsoft has had to get quite a bit of money to... treat the PC as a first-class citizen there. We have to do a better job of communicating the value of PC and giving it more credit."

Unangst is right when he says that the most widely publicised picture of the PC game space isn't the whole picture — it doesn't capture the growth of web-based casual games, WoW's millions of monthly subscribers, Valve's healthy Steam sales and other digital distribution, or the microtransactions revenue of PC products like Gaia Online or Nexon's MapleStory, both of which also have hefty userbases. And, continues Unangst, these PC-only game opportunities are part of the platform's strength."There is a reason you don't see WoW on the console; the gameplay is fantastic on the PC," he points out.

So, everything's just great in PC-land? Does Unangst see any barriers that prevent or limit some users from gaming on PCs? "The biggest barrier to PC gaming is the perception that there is a barrier," he says. "I mean that very seriously."

So if you're having issues gaming on your PC, it seems you should blame your "perception," not Microsoft.


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