Peter Moore is a legend of the game industry. He told us in a fireside chat at our GamesBeat Next 2024 event that he had humble roots as a soccer coach and a shoe salesman. He rose through the ranks at Reebok as a marketer, and then Bernie Stolar asked Moore if he wanted to market video games.
At the time in the 1990s, Moore didn’t know a thing about video games.
But he was flexible. He gave it a try and fell in love. Working for Stolar, Moore helped launch the Sega Dreamcast, which sold more than eight million consoles in the U.S. He went on to take leadership positions at Microsoft Xbox, where he presided over the perilous launch of the Xbox 360 game console (remember the Red Rings of Death?). I was there to cover all of that.
In an interview with my then-colleague Mike Antonucci, Moore unfortunately said, “Ya know, things break.” It went far and wide among gamers as a kind of Marie Antoinette quote about “let them eat cake.” I enjoyed those days because Moore was part of a group of executives who verbally insulted each other on a regular basis. To them, it was good marketing.
Moore helped convince Microsoft CEO Steve Ballmer that they had to replace (600,000) failed game consoles at a cost of $1.15 billion or lose face with gamers. Along the way, he had the Halo 2 November 9 launch date tattooed on his bicep (it wasn’t permanent), as well as the Grand Theft Auto IV launch date on his other bicep.
Moore went on to take the No. 2 job at Electronic Arts, where he oversaw businesses such as EA Sports, and he also had a successful run as the general manager of the pro soccer team in his hometown, Liverpool FC. He also did a stint at Unity on sports broadcasts before moving into semi-retirement.
Moore also said he finished his autobiography. I’d be up for reading that. But I’m even more glad he is still around to tell his own story.
A short time ago, Moore found himself a little lightheaded. His Apple Watch pinged him there was something irregular about his heartbeat: low heart rate, low blood pressure. He figured it was no big deal and he felt like he needed a jolt of coffee at Starbucks. He asked his wife about the watch alert and she told him to stay where he was and she was coming to get him to take him to the hospital. It turns out his heart’s electrical system was failing. That day, doctors operated on him and gave him a pacemaker.
Here’s an edited transcript of our fireside chat.
GamesBeat: Peter Moore was at Sega. He was also a long-time exec at Microsoft and Xbox, Electronic Arts, and Unity. He was kind enough to write me and say that he was in charge of Liverpool FC and not Manchester like I’d written. He was quiet about that, too. It’s nice to have you here, thanks to your Apple Watch. Can you fill our audience in on that particular story?
Peter Moore: Right now? While I’m still here on this stage live? Let’s start with that? Great to see everybody. So many familiar faces. As Dean said, I’ve been around the block a few times. I was just talking outside about when I entered this industry. I had absolutely no clue about video games. I was a shoe guy. I worked at Reebok in Boston since the late ‘90s. I was involved in the sneaker wars. “How would you like to join the console wars?”
I knew absolutely nothing about video games, but within six months of arriving here in the city–those of you here may remember that Sega in those days was where Zynga still is now, 650 Townsend. That was the Sega headquarters. We were getting ready to launch the Sega Dreamcast. This is in the days of dial-up. We were trying to figure out how to get games to run at 30FPS on a 56K baud modem. PlayStation was already dominant. We were a feisty upstart still recovering from the Sega Saturn, somewhat of a debacle. I immediately fell in love with the industry.
I talk a lot about this–I just finished my autobiography. There are plenty of chapters on this. But I did have that imposter syndrome for those first few months. All down in south of Market, trying to convince people with Bernie Stolar and Chris Kilworth and all of my colleagues that we had a chance with the Dreamcast. We were ready to go. We knew we were leading the way, and we knew the PS2 was coming.
I’ll jump to Dean’s question, which is a lesson for all of us here. That was the time when technology was emerging. Just recently, without any exaggeration, technology saved my life. Only a few months ago in July, I was picking my daughter up. She’s right here. Tara works for EA now. I’m very proud that I have three kids that work in the video game industry at very high levels. I woke up that morning feeling just a little dizzy and light-headed. I live in Santa Barbara now. Like guys do, I thought I’d just have a nonfat latte and I’d feel great. Drove to Santa Barbara airport. My Apple Watch kept pinging me. It said, “Low heart rate. Low blood pressure.” Only then did I start to react. Otherwise I would have just ignored it.
My wife, fortunately, used to work for Fitbit. I took a screenshot of the watch and said, “Should I be concerned?” She said, “Don’t move. I’ll be right there. We’re going to Santa Barbara College Hospital.” What had happened is that the electrical system of my heart had failed. It’s only because my Apple Watch was telling me that I had a problem with my heart. I arrived at the hospital and within minutes I’m in an emergency room. Defibrillator, IV, EKG. I was telling Dean that an ER doctor who needs to work on his bedside manner, he runs in with a piece of paper saying, “This is not good! This is not good!” It was pretty much a flat line with the occasional beat. My BPM had gone down to 27.
Lesson learned. If all of us have this technology, literally on our wrists–we all think we’re immortal. Plus we’re guys. We’ll just figure out a way past it. But we have the technology we need. We have this ability to be informed and to break through our stubbornness to do something about this. Not the way I wanted to start this, but from a perspective–it’s a lesson. Many of you have that on your wrists right now. Pay attention to it. I’m in good shape. I’m a few months from 70 years of age. I still work out every day. In fact, the day before I’d been on the treadmill, lifted, did everything I normally do. But the electrical system failed, and Apple told me to go to the hospital. My wife as well, but Apple told me first.
There we go. Wear your watch. Look at the data. Learn about yourself. Pay attention.
GamesBeat: This session is all about remembering times long ago and lessons that align. That’s definitely a good one. But tell us about the decision decades ago where you decided to move into games.
Moore: I had come to America and needed a real job pretty quickly. A job other than coaching and playing soccer. I became a shoe guy. As an immigrant, you take stock of yourself. In my particular instance, we’re talking about the early ‘80s. I have the gift of gab. I grew up in a pub, so I’m used to integrating with adults. I’m a physical education teacher. That’s all I’m qualified to be. I’m used to convincing people to do things that they really don’t want to do. Going out to play rugby in the snow.
I remember looking in the mirror and thinking, “What am I going to do?” You take stock of your own abilities. It worked out well for me. I was able to leverage what I had then along with an English accent. I learned pretty quickly that Americans, when they hear an English accent, naturally think we’re more intelligent, more elegant, more refined. Look, I’m from Liverpool. Nothing could be further from the truth. But once I realized that, my English accent came on thick as I was selling shoes. That worked out well for me.
I went to Reebok in Boston and ended up as head of global sports marketing. But I got a call, as many of us in this room do, from an executive recruiter in late 1998. “What do you know about video games?” Really nothing. This was still very much the infancy of the industry. It was perceived as boys in their bedrooms. It was very much seen as a phase people went through. I don’t know what the global revenues were for games in those days, but I’m sure it was the single billions of dollars, if even that.
But what piqued my interest was when the recruiter, a guy called Rick Edwards who I’ll never forget, said, “This thing is going to be online.” I’m at Reebok using Lotus Notes and trying to figure out how to type. But this idea of gaming going online was intriguing to me. I had the opportunity–the president of Sega of America, Bernie Stolar, believed in me. The theory being, during that period, that if you could sell shoes to teenage boys, your skill set transferred seamlessly over to selling video games. I believed that. I’m not sure it was true, but I believed it at the time, and I moved the family from Boston to San Francisco.
We started working on launching the Dreamcast. We started working on rebuilding the Sega brand from somewhat of a debacle with the Sega Saturn. Getting back to the old days of the Sega Genesis ways. For the first few months, absolutely, the imposter syndrome was heavy and hard for me. I had to get the vernacular right. Who the heck is Activision? Who’s Acclaim? Who’s Namco? Who’s Bandai? Who’s Capcom? I’m on a plane every two weeks from SFO to Narita to meet with Japanese executives. Pretty soon into my tenure, Bernie left, and within six months I became president of Sega of America.
GamesBeat: Bernie was fired shortly before the Dreamcast launch, right?
Moore: Bernie left. I was focused on one thing. 9/9/99. Getting the VMAs right. Sorting out the best launch lineup for any console ever then, and ever will be, on 9/9/99. Actually getting all those games to work, which is a whole separate session as well. Getting all the units we needed into Toys R Us, our number one retailer. A bit of Best Buy, a bit of Wal-Mart, but Toys R Us was where we were going hard and heavy. 9/9/99 came along. We had the biggest 24 hours in entertainment retail history. We pushed hard. I figured out that Star Wars–The Phantom Menace was the biggest one they’d ever done, and we blew that out of the water. You’ll find a video of me online somewhere around here, within a few blocks, unveiling a banner with our Japanese execs that came over. We did $99 million that day in hardware and software.
GamesBeat: The interesting marketing problem back then was the government. They were not fans of video games. Games were bad for you. You had to deal with that.
Moore: Many of you probably remember those days. Tipper Gore–primarily her focus in those days was music. Parental lyrics. Hardcore rap was coming about, and the lyrics were getting a bit more hardcode. But in early 2000, Sam’s predecessor Doug Lowenstein rings me up and says, “Look, could you come to Washington D.C. to represent the video game industry?” I’d been in the industry a year. “Testify at the McCain-Lieberman hearing.” John McCain and Joe Lieberman were looking at explicit content and how they, the Senate and the government, could control content.
Myself, Strauss Zelnick – interestingly, representing the music industry at the time in his role at BMG Music – Jack Valenti, representing movies, and Greg Fischbach of Acclaim, a great old publisher. We testified to John McCain, who was very open-minded to what we were talking about. Look, we have the right to create content that appeals to the generation that is consuming it. We do not feel that it’s our job to censor that content. Now, what we will do, and this is where the ESRB ratings really started to kick in, is build a rating system through the ESRB, which you’re now all familiar with, that will give parents in particular some indication of what the game is all about. M-rated, in those days, was still seen as the death knell for sales. There weren’t enough people that wanted an M-rated game. But we built the rating system.
We had to take on the government, because these were the days when video games were getting the blame for everything. I remember particularly the despicable U.K. tabloids–headlines like “Call of Duty Killer.” Any time they could link–a tragic event involving a young person, they would try to link video games to it. Our job was to be able to disassociate, because research proved there was no linkage from Quake, DOOM–you remember Columbine as well, which I think was Quake and DOOM. We were trying very hard, and succeeded in the end, to say that the fact that someone plays a video game that involves a gun and shooting somebody virtually doesn’t mean they’re going to do it in real life. That was the conversation being had at the highest levels of government. There was this view, which we fought and won, that the government should come down and censor everything we were doing in games, music, TV, and movies.
GamesBeat: It was a fun time, because there were personalities in those days. Executives on different sides always sniping at each other. That doesn’t happen so much anymore. It was nice when the industry had a sense of humor.
Moore: I came from the sneaker wars. I’ve said this. I encouraged the console wars. I wanted gamers to think that myself and Jack Tretton and Reggie and even all the way up to Kaz Hirai and Ken Kutaragi were at loggerheads with each other, that we were constantly fighting. The reality couldn’t be further from the truth. But the facade we’d have, particularly at E3 when we’d go on stage, was to take shots, because I think that’s what the industry needed to have this sense of fun, and to distinguish itself from the stiffer media like TV and music and movies.
E3 was a great platform to have so much fun, to do stupid things like tattoos. For me and Jack Tretton to go at it and talk about rubber ducks and all the things that the other guys would do. Even at Sega, and I still have this hanging on my wall–I had a redheaded kid with his tongue out saying we’re sorry to hear about PlayStation’s shipping problems. In those days we could put that in the magazines like EGM and Next Gen and all of that, when print dominated our industry.
The other thing we were trying to do is get real respect and grow. E3 certainly allowed us that platform, to get us away from just being in gaming magazines and this very niche industry that was seen as a phase that teenage boys grow through, and onto the front pages. What were able to at E3–in my later years at Xbox, bringing Bill Gates on stage with me, bringing Steve Ballmer down and giving some credibility. This wasn’t just something that was fun to play and then put it away to do more serious things. This was a serious industry that was grasping the opportunity that online and the nascent social networks offered. We were building all the way from the legacy of Sega.net to when I was at Xbox, building Xbox Live. Then you go through the later years and the subscription services we’re now very familiar with.
GamesBeat: You had that wonderful time during the Xbox 360 with the Red Ring of Death.
Moore: That was a blast. Dean and I were talking about this. I was reminiscing about rolling into a meeting to ask Steve Ballmer for $1.15 billion.
GamesBeat: Is that one of the meetings where you came with a baseball bat?
Moore: Steve’s a character. I love Steve. The story is pretty simple. We had calculated that we needed $1.15 billion to fix the Red Ring of Death. I always remember this number. We needed $267 million for Fedex to ship boxes overnight, to return boxes overnight, to ship consoles back overnight. You had this first-class service that started to make people think we cared about them. There was a period when we couldn’t say anything.
Dean used to hang out with a guy called Mike Antonucci, who did an interview with me about this in the San Jose Mercury-News. This was a period where we at Microsoft, a publicly traded company, operating under a consent decree from the DOJ at the time as they were trying to break up Microsoft, had to be very careful about what we said about anything. I said something like, “You know, things break.” That became a Marie Antoinette, “Let them eat cake” moment that just went on forever. Things do break. But from that perspective–again, I look at the age gap here. I saw this as a Tylenol moment. I’ve always talked about it.
If you remember, many of you, there was a tragic night in Chicago in the mid-80s where somebody, who has never been found by the way, decided to inject cyanide into Tylenol bottles on the shelves of drugstores. The next morning, people who had taken Tylenol before they went to bed were dead. You can thank that moment and Johnson and Johnson–they took every piece of merchandise with a Tylenol brand off the shelves overnight. The safety cap that you’re very used to came out of that moment. This concept of not pretending that you don’t have a problem, but immediately acting, is still taught at Harvard Business School. It’s called a Tylenol moment. The Tylenol brand is bigger than ever. I like to think Xbox, the brand, is bigger than ever. But you have these moments where you need to sink or swim.
The thing I always recall from that meeting, I said, “Steve, we have a real problem. If the Xbox brand is to maintain any kind of presence within the Microsoft ecosystem, and certainly within games, we need to spend $1.15 billion right now.” He looked at me and said, “Do it.” That’s what it was. Do it. Microsoft stock didn’t move the next day, I’m glad to say.
GamesBeat: At EA you had to consider the move from retail to digital, direct to consumer. There’s a lot of that still going on today in different ways. What was fun about EA?
Moore: Well, my first ever meeting at EA I was still a Microsoft employee. Robbie Bach, my boss, had given me permission. John Riccitiello said, “Hey, we have a meeting in New York City that you need to attend. It’s one of those moments in gaming where I’m about to talk about stuff you need to be in the room for.” Robbie, a great friend of mine, incredibly kindly, said, “Get on the plane. Don’t worry about it. Sign an NDA, whatever you need to do.”
The meeting was called the Burning Platform Meeting. This was in early August of 2007 at the W Hotel at Lexington and 56th. I’ll never forget it. I reference this meeting to this day when I talk about leadership and taking risks ahead of time. First slide on the screen was an oil platform in the North Sea. Okay, that’s interesting. Second slide, it’s on fire and falling down. Well, that’s really interesting. It was the concept of the burning platform. Video games was a burning platform. The industry was a burning platform.
What does that mean? The movement toward digital was slow. We were still waiting for broadband to catch up, to be affordable. Hard drives stood to get bigger so we could move to a more digital future. The reliance on discs was still strong. But John said, “This can’t continue. We’re going to tell our retailers – GameStop, Best Buy, Wal-Mart, Target – that we’ll sell you discs, but we’re moving to take your customers.”
More important, in classic JR style, he said, “Many of you won’t be here next year.” I’ll always remember. That was his motion. It was the people who were writing orders for retailers. It was the people who were stocking boxes on shelves. It was the people who were managing supply chain operations for physical media. They were going to be replaced over a number of years with people running global billing systems, customer service, network operations, all of that. John gave everybody fair notice that the company was shifting.
It’s this concept many of you have heard about that Joseph Schumpeter coined, an economist in the aftermath of World War II, called creative destruction. Creative destruction is about recognizing that while your business is going great, you ultimately need to blow it up to be prepared for the future. That’s what creative destruction is all about. We were doing great. We were selling tens of millions of discs. But to John’s credit, he saw the future. If you look at the history of EA during that period–now we’re talking, as we get into the depths of this, we’re putting every penny we’re making into rebuilding the company as a digital company. Delivering content directly to gamers’ hard drives, their phones, their PCs, their consoles.
Retailers hated us for a while. Many of you might remember EA being dubbed the worst company in America two years in a row. A lot of it was to do with this move toward digital. Gamers don’t like change. But hard lessons on that. Stock went down to $10. John left in 2013. But the stock’s at $145 today. Why? Eventually you come out of that trough and all your investment in what you’ve built over years comes out to where all of a sudden you’re hitting 81% gross margins on things like FIFA Ultimate Team. You don’t have to worry about warehouse and supply chain operations and manufacturing. You’re working toward delivering digital subscription models that allow sustainable and consistent and predictable revenue.
GamesBeat: Riccitiello in those days said he didn’t want to pay 30% to physical retailers. It’s interesting that now Tim Sweeney today is saying the same thing to iOS and Android.
Moore: Nobody wants to pay 30% to anybody. But the idea of going digital–our margins improved enormously. I always remember these numbers. The operating expenses stayed flat and we put $2 billion on the top line.
GamesBeat: We’re in this period of pain now. What lessons from history can help us through this? Back in the day the consoles were on this five-year boom and bust cycle. Today we don’t know what’s happening.
Moore: We went through these periods. If you look at the history of the industry, all the way back to the Commodore 64 and the Apple II, you have these booms and busts. When you don’t have the installed base big enough yet to get the numbers you need, those are the tough years. But all of a sudden installed base and attach rate catch up. Then you’re in those golden years. It may only be two or three years, and then you have to start taking discounts, because your installed base becomes less active. Your attach rate goes down. There’s anticipation for the next PlayStation, the next Xbox or GameCube or Wii or whatever’s coming along.
That’s been flattened out in the most recent decades by things like mobile gaming and the ability to change the business model away from simply getting as many discs sold for $50 as you possibly can before moving on to the next game. You have the free-to-play element that games like Fortnite helped pioneer. You have games like EA Sports FC making multiple billions of dollars a year, the great majority of which is digital. You have this smoothing-out that we always looked for. But it was tough times during that period. As a result, going back to the example I used of JR and this movement away from being a manufacturer of discs where the customer was Wal-Mart or Best Buy–we moved to the customer being Dean Takahashi.
A lot of people got let go from EA and moved on. I like to think all of them have done well. I see so many of them in different roles. The creative destruction had to happen at that moment if EA was going to stay in business.
Question: You mentioned your daughters going into the industry. I’m second generation in the industry as well. My dad was at Atari back in the day. How do you feel about how the culture has changed as your daughters have gone into the industry?
Moore: The industry is more diverse, more welcoming, more open. The types of roles–when I joined, it was sales and marketing. You shipped discs and off you go. Developers, I’m not sure there were many women in those development studios. I was working for a Japanese company that had nine studios, and not a woman to be seen if I recall. But the industry has evolved.
It’s funny. I was talking outside about where we at EA used to recruit from. The industry started to change when people like John Riccitiello came in from things like Clorox and Wilson Sporting Goods. My wife Debbie, who worked at EA in trade marketing, came from Heinz. All of a sudden we started to see people taking the industry seriously. At EA, I always recall, as we started to move toward digital, we started to go on campuses. I would do this. MIT, Carnegie Mellon, Stanford, Cal. We’d recruit data analysts, scientists. That never existed in the earlier years.
A serious industry that’s career-driven, where you can see yourself going all the way through the industry to retirement, that’s held in high regard by everyone. Everybody understands the power that video games have in this world today. It’s seen as a legitimate career where technology and entertainment collide at the most amazing level. That’s what I’ve seen over the decades I’ve been involved. I’m proud of my kids being involved. They’re all doing incredibly well.
In Tara’s case she came late to the industry, cutting her teeth in VR. She works in brand, which we badly need. Fully qualified, professional, experienced brand people managing the community, which is always a challenge to say the least. Doing outbound communications about the status of games, managing problems. They’re in crisis management all the time. In the old days I used to wake up and read Kotaku to see what I was going to do that day.
GamesBeat: I remember being on a panel with a young woman in her 20s. I said I grew up at a time when games were considered for nerds, for maladjusted young folks like myself. She said, “Well, ever since I’ve been born, video games have been cool.” That was a big difference.