Peter Moore to EA: As the Stomach Turns

Just when you thought the gaming landscape couldn't get any more surreal - Peter Moore, Head of the Xbox 360 Team at Microsoft, announces that he is leaving to become President of the EA Sports label. Congratulations, Pete! And as I was reading Engagdget's blurb on the goings-on, I couldn't help but be surprised by the tone of the announcement:

It's hard to call the Xbox 360 anything but a success, but having missed some sales numbers, ringing up an extra unexpected $1b on the corporate card because of warranty issues, and still generally failing to make a profit, it looks like Peter Moore, who we just sat down with a few days ago, has stepped down from his embattled position as the ringleader of Microsoft's Xbox group. Successor to his role is Don Mattrick, who is taking over not just Peter's position as VP of Microsoft's Interactive Entertainment Business, but leading the group (including Games for Windows) entirely. Moore's new job? Prez of EA Sports, down in the SF bay area. Take THAT, Microsoft.

Are they joking? Is this an attempt at sarcasm? "...anything but a success..." You've got to be kidding me. This is a guy who has demonstrated a painful case of foot-in-mouth disease, to the point where you just hope he doesn't say anything to dig himself and/or Microsoft an even deeper hole. Here is an extract from my "Failure-in-a-Box" post back in April:

Microsoft management has been talking about cultivating a more global, diversified user base for quite some time. Consider the words of Peter Moore, Microsoft Corporate VP, when speaking at the ELSPA International Games Summit way back in the middle of 2005:

Speaking at the ELSPA International Games Summit in London, Microsoft corporate VP Peter Moore has predicted that the company's first-mover advantage with Xbox 360 will allow the console to reach 10 million installed base "very quickly."

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He reiterated his colleague J Allard's comment, made at E3 last month in Los Angeles, that the next-generation could touch a "billion consumers" - but clarified slightly, saying that he was referring to the industry as a whole, including all three next-generation consoles, rather than simply to Xbox 360.

Speaking about the factors which will drive the growth of the next generation, Moore talked about the industry's need to broaden its audience, both geographically and demographically - and highlighted the growth of high definition television as a key factor which will drive next-gen consoles to new consumers.

It seems to me that there is a disconnect between stated objectives, strategy and execution. Microsoft's vision of the gaming console as the window into the living room is a big, big bet, and one that clearly hasn't paid off thus far. Mr. Moore talks about the need to broaden its audience across both geographies and demographics, yet the emphasis on HDTV as being a key factor driving broad-based console sales kind of misses the point. Is the Wii successful because of its zippy graphics and technological superiority? No. It is successful because it is fun. And because it appeals to a broad audience. And because it is comparatively cheap. The Microsoft strategy sounds more like a niche strategy for hard-core gamers, in which case it's investment in a console strategy should be smaller and more targeted. Would Lamborghini try to sell to everyone? Of course not; it would target those who the company knows value its features and are willing to pay for them. This is basic stuff.

Gee, Pete, kind of seems like your prognostications didn't come to pass. Not even close, pal. And what about your not-so-deft handling of the "three red lights" fiasco that caused your employer Microsoft to pony up over $1.1 billion for additional warranty costs? And now part of a piece I penned only a week ago on your performance in an interview with N'Gai Croal of BusinessWeek.com's LevelUp:

I think N'Gai mis-titled his post: it think it should be Confession is Good for Business.

...the recent announcement that the Xbox failure rate is significantly higher than the generally accepted 3-5 percent standard for consumer electronics products raises questions some important, as-yet unanswered questions. Did Microsoft's zeal to have the Xbox 360 both launch first and turn a profit--after the first Xbox launched second and lost billions of dollars--cause it to cut corners in a headlong rush to market, resulting in the current debacle? What, precisely, are the factors causing Xbox 360s to fail? What is the failure rate? How many devices have been returned thus far over the flashing three red lights? Was Microsoft aware of the magnitude of this problem before it launched the Xbox 360 Elite?

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In our interview with Microsoft corporate vice president Peter Moore, he pointedly declined to offer specifics about what was causing the problems on the grounds that he is not a technical person, nor would he answer whether the flaws should be attributed to design or manufacturing.

This is just inexcusable, a PR gaffe of the highest order. If you're not a technical person, Peter, then either get someone to comment who is or get someone with technical credibility to do the interview, like, say, J. Allard? This side-stepping of a fundamental question is no way to engender confidence or support from either your customer base or the media. All those hard-core gamers that have paid premium prices for your consoles and games - don't they deserve better? I'd say so.

And then, as if you've got anything to brag about, you recently took several pot shots at Sony and its problems with the PS3 in Japan. As reported in GameDaily BIZ 07/16/2007:

There's no question that the Xbox business has struggled from the get go in Japan. According to the Famitsu Marketing Data Service, the Xbox 360 has only sold 122,565 units through the first half of the year in Japan. With this data in mind, therefore, it's a bit ironic that Peter Moore, Microsoft's Corporate VP of Interactive Entertainment, should comment on Sony's recent success or lack thereof in the land of the rising sun.

But comment he did.  In an interview conducted at E3 last week, GameDaily BIZ asked Moore about the state of Xbox in Japan and he decided to turn the question on its side, taking aim at his competition. When asked specifically about the importance of Japan to the global console battle, he fired back, "That's probably a better question for Sony who's getting outsold by what, 6-to-1? You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling."

He added, "I built a business plan [for Japan], but I don't think my expectations in Japan were anything close to what Sony's expectations are. They are failing. They're missing their plan by much more than I'm missing my plan."

"They're missing their plan by much more than I'm missing my plan?" Hey, let's give this man a bonus! No, how about a bright, shiny, high-paying job at EA Sports? From 1UP 07/17/2007:

The folks at NeoGAF dug up the SEC filing related to today's announcement that Microsoft executive Peter Moore is leaving the Xbox camp to become the head of the EA Sports division at Electronic Arts. How much did EA fork over for Moore? According to the SEC, $1.5 million, with a guaranteed annual salary of $550,000. Not bad. The filing also reveals Moore will start at EA Sports on September 4, giving him time to sort out his affairs -- including relocation, for which EA will fork over at least $330,000 to cover.

Nice job, Peter. You clearly have some finely-honed negotiating skills. Hopefully they are better than your communication skills, and that they will be largely what you need to succeed at EA. Hey, you were CEO of Sega America and have some pretty impressive stuff on your resume. But if I can give you a little feedback, I'd recommend that you:

• Work on communicating with your customers in a way that builds trust and credibility, exactly the opposite of what you did while at Microsoft;

• Shut up about your competition and focus on your firm, unlike what you did at Microsoft;

• Downplay unfounded enthusiasm and focus on execution and delivering against realistic expectations, something that you could have done better at Microsoft.

It's not as if you were dealt a great hand, but you certainly could have played it better. Clearly John Riccitiello, CEO of EA, has immense faith in you to be giving you such an important role. Let's hope that you've  learned from some of your mistakes at Microsoft and are ready to move on. I also think Microsoft benefits by shaking things up a bit, which was kind of necessary at your Xbox 360 unit. This could end up being a win-win. But the one winner we know for sure is you, Mr. Moore.

 

Comments

[Yaser Anwar]

I hope sooner or later MSFT learns that simply throwing money at problems is not the solution. You'd think they'd understand from Xbox, Search, then Zune, and now Xbox 360.

They need some innovation, some might be an understatement, and should hire talent that can bring that. Promoting people from within IMO is not the solution as their thought process has become jaded by non-innovative thinking.

[Mitch]

His finely tuned negotiating skills probably stem from his crazy English accent.

But seriously, Microsoft has shown repeated failures in business strategy, almost as if they don't really have one. It's great to go with the 'shoot for the moon' attitude and sometimes you need it to survive, but obviously their strategy was not focused enough. Seems like Business 101 failures to me, and the guy is getting rewarded for it. Good for him, I guess.

Great post.