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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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September 17, 2008 9:57 AM

U.K. press reports: Google buying Valve; former Xbox boss Peter Moore speaks

Posted by Benjamin J. Romano

A few buzzworthy video games items out of the U.K. press this morning.

As my colleague Brier Dudley has noted, the Inquirer is reporting that Google is going to buy Kirkland-based Valve "any second now." Valve is a video game company with an industry leading distribution platform called Steam. (Update, 12:53 p.m.: Turns out that it ain't happening, according to MTV Multiplayer, which quoted a Valve spokesman saying, "complete fabrication." Oh, and Valve is now in Bellevue, not Kirkland.)

The U.K. Guardian Games blog has an interesting interview with former Microsoft Xbox boss Peter Moore, who left the company last summer to head EA Sports. Moore, who started at the Redmond company in January 2003, provides some candid assessments of life inside the Microsoft games business. Here are the bits I found most interesting.

Asked how the Xbox business was perceived inside of Microsoft, Moore said "the great majority of people loved it. ... [I]t was the first physical thing you could really get behind at Microsoft other than a mouse or a keyboard, and it was entertainment." What's more, seeing games with the Microsoft logo "was very important to morale at a time when the Microsoft stock hadn't moved." On the other hand, Moore acknowledged "a vocal minority that disagreed with videogames as a cultural phenomenon ... and then the drain on the company's stock price, because we were a multi-billion dollar investment group and it had an impact on the stock price."

Speaking of the multi-billion dollar investment, the Guardian asked whether the Xbox business was "more about getting a presence in the living room than turning a profit."

Moore said Microsoft "couldn't afford not to be -- we believed that broadband connections were going to move out of the bedroom into the living room, which they have done, or that wireless networks were simply going to take over and your broadband connection would be ubiquitous around the house."

But there were cost considerations, too, particularly around the decision to "prematurely" shift from the original Xbox to the Xbox 360, Moore said.

"The hard drive in every Xbox killed us; we we're still selling it at $199 and the hard drive was like $70. ... the more we were selling – there was still great demand – it was killing us, and there was no way to bring the price down. So in the end we determined at around the 25 million unit mark that we just needed to slow this thing down and just not sell any more, and move to the 360 as quickly as we possibly could. And to this day people still believe we left the Xbox too early but it was purely for financial purposes."

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