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NPD has a new study. They’re actually taking an assessment of the online space and starting to aggregate. DFC (Intelligence, a video game market research firm) has done a bunch of work there. As you look at the DFC numbers for 2007, the PC is ahead of any other platform, with $8.2 billion in worldwide game sales, with about $5 billion of that online. So in terms of raw numbers, we think the PC is still by far the leading platform when you look at the entire picture.

Kevin Unangst, Microsoft Senior Global Director, Games for Windows

Yet the numbers on Valve’s PC Hardware Survey (which catalogs system information from users of its Steam PC game download and community software) indicate that of the 1.7 million systems it sampled, 80 percent still use Windows XP, and 90 percent do not have Direct X10-capable hardware.

Q&A Kevin Unangst, Microsoft’s Senior Director of Global Gaming, hit the interview rounds starting in April, with the goal of working to dispel the myth that PC gaming is in trouble.

In some ways, over time, there will be competition there as we both continue to deliver on feature sets that we think developers and consumers are going to want. That said I think what Valve is doing for the PC is a great service. They’re delivering great games, they’re delivering an interesting set of digital content to millions of people. They’ve done great things for the Windows gaming ecosystem and we hope that they continue to do that.

You mentioned the installed base for Direct X 10 hardware earlier, and in your interview with Kotaku you said that there are 60 million DirectX 10 parts in the marketplace right now. Is that discrete graphics cards?

Has there been any progress towards more balanced reporting of PC gaming’s financial landscape?

That is discrete as I understand it. And potentially laptop chips, as well.

What do you make of the fact that 2007 was the same year Microsoft’s Games for Windows retail branding program was in full swing?

I’d be interested to see what the decline might have been had we and our partners not invested. I think there is a natural shift to online that we’re seeing in the PC space, and I think we still feel like with a billion-dollar opportunity sitting at retail we needed to continue to invest in building out dedicated, branded shelf space. I can’t peek into what could have been, I certainly think that our investment has kept publishers and retailers devoting shelf space to the PC that they may not have otherwise, or at least attention on the PC that they might not have otherwise.

Over the course of Unangst’s interviews, he made some interesting points about the perception of PC gaming, the adoption of DirectX 10 hardware, and Microsoft’s plans for its Games for Windows Live program. We followed up with Unangst earlier this week.

That like all the others is just one more stat to look at when you’re measuring adoption. You have to take into account that Steam and its installed base has been very focused on Half Life and other games that are Valve’s first-party IP, and we believe those survey results skew heavily towards those customers. I don’t believe that any of their titles take advantage of Direct X 10 at this point, so it doesn’t surprise me that they haven’t seen a strong adoption rate among their core consumers. I think the (hardware) sales numbers speak for themselves as well as the numbers of titles that are shipping and the investment that the publishers continue to make.

The perception is really what’s being written about in the press since the console battle began anew with the
Xbox 360, the
PS3, and the
Wii. When the PC’s written about it’s “oh, wow, the PC’s not selling as many copies at retail so it must be dying.” That’s the story that’s been written about for so long and that’s where the root of this perception issue comes from. And it does get a bit frustrating for folks like Valve and Microsoft, and Intel and Nvidia and others who are investing time and money and seeing new gamers and seeing PC sales increasing and seeing Direct X card sales increasing and seeing these huge revenues in online. We’ve seen a growth in casual games. MSN Games and PopCap are doing incredibly well on the PC, but you’re not seeing a lot of coverage about that. So that’s where I think the history of the perception point comes from and it’s not true.

I don’t recall the document that you’re referring to, but I can speak in general that things like automatic updates are available in Games for Windows Live offered today. Those features are all part of the infrastructure that we built and it’s something that we’re going to build on over time. It’s really been our focus to bring over as much of the platform as we can. And then build on top of that the unique experience we think Windows gamers and Windows developers are going to want. So you’re going to see even more significant investment from us on Games for Windows Live. Digital distribution and things like that are certainly areas that we have talked about, that we’re looking at how we build on the infrastructure and support. But today the focus is on having an identity, having a common friends list, and being able to offer in-game updates. We also have things that other services don’t offer like cross-platform support with Xbox 360.

When you spoke to the game blog Kotaku, you mentioned perception as one of PC gaming’s biggest problems right now. Valve Software’s Doug Lombardi said the same thing in an interview with Shack News. Can you elaborate?

Speaking with the game developer trade site Gamasutra, you said that Microsoft would be working to compete with Valve’s Steam software by way of Games for Windows Live. You also pointed to a public development document on MSDN.com outlining the requirements for Games for Windows Live. We didn’t find that, but we did find a PowerPoint presentation from this year’s Game Developers Conference called Games for Windows Live: Just the Facts. That document outlines features like digital downloads, automatic game patching, and remotely storing saved games, all of which are currently available in Steam. What kind of time table does Microsoft have for adding those features to Games for Windows Live?

(Credit:
Microsoft)

That idea came about in the beginning of the year following a report from NPD research showing that U.S. retail sales of PC games trailed those of games for the various consoles. As Unangst and others have pointed out since the NPD report, those figures do not take into account subscription-based PC gaming, like the World of Warcraft juggernaut, nor do they factor digital distribution from services like GameTap and Valve Software’s Steam.