Xbox co-creator resigns to start new venture

Ben Berkowitz

LOS ANGELES: The co-creator of Microsoft Corp.'s Xbox video game console has

resigned less than a week after the software giant conceded the unit was

struggling internationally and would miss its initial sales targets, Microsoft

said on Monday.

Seamus Blackley, a physicist by training who also worked in Hollywood before

joining Microsoft, said he plans to start a game development company. "It's

been extremely frustrating for me to not be making games," Blackley, a game

developer by trade, told Reuters in an interview.

News of Blackley's departure came just days after Microsoft said it would

miss its fiscal year-end sales target for the Xbox by as much as 40 percent, a

shortfall it blamed on weak international sales. Those weak sales led to price

cuts in Europe and Australia last week.

"It just happened to coincide with the other stuff ... it has nothing to

with Xbox," Blackley told Reuters. "Today I just really want everybody

to know Xbox is okay."

The Xbox has also struggled in Japan, selling just over 190,000 units in its

first six weeks there, according to Japanese game magazine publisher Enterbrain

Inc. By comparison, the console sold nearly 1.5 million units in its first six

weeks in the US last year.

Microsoft has also faced criticism for loading the Xbox with cutting-edge

features, such as built-in high-speed Internet connectivity and a large hard

drive, that were exciting to the industry but ahead of the marketplace.

"I think that the guy is responsible for the positioning of the product,

and I think Microsoft positioned the product wrong when they launched,"

said Michael Pachter, an analyst at Wedbush Morgan Securities. "It's an

over-engineered product."

'Everyone's going to have problems'



"You can talk about short-term problems now, but everyone's going to have
problems," Blackley said. "We built momentum with the developers (in

Japan) ... in a year-and-a-half that pays off."

Blackley worked at the video game arm of movie studio DreamWorks before

joining Microsoft as head of the company's Advanced Technology Group. Before his

stint at DreamWorks, he was also a noted designer of flight simulation games.

He has been one of the Xbox's public faces from the start, even going so far

as to propose to his fiance during the Xbox's launch on Nov. 15 in Times Square

in New York.

A book being released on Friday about the history of the Xbox project,

"Opening the Xbox," by journalist Dean Takahashi, features a forward

written by Blackley and centers in large part on the genesis of the project

through him.

"This guy was the soul of the Xbox," Takahashi told Reuters.

"You have to just wonder, why can't Microsoft hang on to a person like

this?" The book, and Blackley's resignation, come as the video game

industry is in the midst of gearing up for the Electronic Entertainment Expo, or

E3, which begins on May 21 in Los Angeles.

E3 is the video game industry's most important event of the year, with

hardware makers discussing forecasts for the year and game publishers showing

off their new titles. A good E3 showing is considered crucial to a company's

financial success.

Industry executives, analysts and observers generally believe Microsoft is

likely to cut the Xbox's price from $299 to $249 or even $199 at some point this

year, though they are divided as to whether such a cut will come at E3 or later

in the year, perhaps around September, a more traditional time for price cuts.

As for Blackley's future, he declined to rule out the possibility of

developing games for platforms other than the Xbox. "The other platforms

are interesting ... the PC in particular," he said.