Cover Story: Package Development at Microsoft

HOW XBOX BROKE OUT OF THE BOX

By Patrick Henry

Nothing offers more dazzling experiences of productivity, creativity, and entertainment than computer software and hardware for the consumer market.

The only trouble is, you'd never know it from the look of much of the packaging.

Microsoft Corporation's stake in the appearance of the packages for its consumer software and hardware products is obvious. Because the Redmond, WA, company sells more of these products in more places than anyone else, it has to cut through more shelf clutter at retail than any other publisher. Even a contender as mighty as Microsoft couldn't do that with the kinds of bland, boxy-looking packaging that consumers tend to associate with products for their home computing needs.

According to Patti Sullivan, a packaging project manager at the corporate headquarters, Microsoft came to this conclusion about 10 years ago after realizing that there was more to making packages than simply meeting shelf dates.

Since then, she says, the company has worked hard to mold a philosophy and a process of package development in the same spirit of innovation that characterizes all of its other operations.

Along the way, this has meant replacing an in-house package manufacturing and assembly division with regional operational centers. Aligned with product groups, the Package Engineering Management Team (PEM) to which Sullivan belongs translates product marketing objectives into package production specifications. It also superintends relationships with the outside providers that turn the specifications into packages for software, keyboards, mice, and gaming systems bearing the Microsoft brand.

Small in number only

The PEM team consists of fewer than 20 people—a tiny fraction of Microsoft's global workforce of almost 60,000. "The team is very lean," acknowledges Sullivan. But it's very good at multitasking: "All of us are package designers and project managers in one sense or another," she says, with each member handling about 15 product launches or other projects per year.

Working with the marketing division, product development, and other internal groups, this small but formidable band is the driving force behind the packaging for everything that Microsoft sells at retail. Next month, examples of the PEM's capabilities will be seen in four new products being launched in time for the holiday season: the Xbox 360 gaming console and its range of accessories; the Laser Mouse line; Perfect Dark Zero - Limited Collector's Edition gaming software for the Xbox 360; and Visual Studio 2005 - Team Edition authoring software.

The PEM team members prefer "partnership" to "outsourcing" as a word to describe their relationships with external sources: a closely held, global list of vendors that includes creative, structural, research, and production agencies; test and material suppliers; and providers of manufacturing and assembly services. Sometimes, notes packaging project manager Jeff Loth, the manufacturing partners also offer creative support "if they have that capability."

The team's alignment with product groups enables each group to enjoy a certain amount of design latitude within overall branding guidelines.

Head for the red

For example, according to hardware packaging manager Jane Tsilas, the hardware products group uses a signature color red to carry into new subcategories as the flagship color of mouse and keyboard products. By following a color-specific concept in designing packages for these ubiquitous peripherals, she says, the hardware group lets consumers know that shopping for Microsoft-branded input devices is as easy as "finding red boxes on retail shelves."

On the opposite side of the color wheel, consumer focus-group research has indicated that the response-triggering color for Xbox hardware is green—a color that's conspicuously used in the packaging new 360 version of the product.

Duane Colbert, packaging project manager for Microsoft Game Studios, explains that while the primary branding colors of green and silver-grey remain the same from Xbox to Xbox 360, the new version uses white instead of the original black as the accent color. The change reflects a shift from a focus on hard-core gamers in Xbox to an appeal to a much broader demographic in Xbox 360. "Xbox 360 game cases will use a lighter, more transparent green to differentiate from Xbox while retaining the same recognition at retail," Colbert says.

At Microsoft, package development for a new product begins as a conversation with the marketing team handling the launch. Jay Watts, senior manager for software package engineering, describes the subsequent five-phase process as follows: gathering and confirming the marketing requirements; designing the package concept; testing the concept for practicality; executing the plan by generating engineering specifications for manufacturing and shipping; and finalizing by following through to completion based upon input from package manufacturers.

Tsilas says that although the overriding objective of the process always is manufacturability, the design goals can be "very bipolar in nature" as the packaging teams work to reconcile what marketing wants with what the global manufacturing base actually can do—within budget and on schedule.

That's why, notes Sullivan, a flair for "sales and negotiations" is one of the teams most called-upon skills: "We do this day in and day out." According to Tsilas, this collaborative give-and-take is what keeps things moving forward.

"Over the last few years, we've become very good at staying on the critical path," she says. "We are really crisp on how we interplay with the other teams, and we know each other's drop-dead dates." This makes it possible to streamline workflows and eliminate, where feasible, steps and milestones that may not be needed as the job progresses.

How was the "out-of-box experience"?

Loth says that "substantial worldwide research" provided by the marketing groups looms large in decisions not only about how a package should look, but also about how it should perform.

Focus-group feedback about Xbox, for example, has helped the packaging team to better understand the all-important out-of-box experience: how consumers react as they open the package, extract the contents, and set up the product for use. According to Loth, too many computer product packagers miss the point of the out-of-box experience by prioritizing manufacturing concerns instead of customer satisfaction.

That's a miscalculation that the Microsoft packaging team works strenuously to avoid. Until recently, says Sullivan, "the whole industry has been in a similar square box"—a design mindset that Microsoft believes it has cast off with packaging innovations like those that will showcase its year-end launches.

Sullivan says, "Our design challenge is to find ways to not just be a box, and still represent our products appropriately." She adds that even though consumers may be getting used to the idea of obtaining software, video, and other information and entertainment resources in purely digital form, "you can't say that customers don't ever care about the packaging."

From Redmond to retailer

Microsoft believes this is so because, come what may in the road ahead, retail shopping will remain an important channel for product consumption—software and hardware products included. Because shopping, says Sullivan, "is our social thing to do," and we are still conditioned to respond emotionally to the packaging that we see.

Although software licensing generates more revenue for Microsoft than physical sales, the company continues to rely on packaging as an indispensable link to the consumer marketplace. According to Colbert, it could scarcely be otherwise: in most cases, consumers acquire software for the first time in a box, downloading updates later.

That's why the Microsoft team will concentrate on blending the right mix of innovation and appeal on store shelves, one well-designed package at a time. "Packaging is our face at retail," says Watts, "and we don't see retail going away."

XBOX 360 PRODUCTS AND ACCESSORIES

A major packaging design goal was to use structure not only to enhance brand communication and drive shelf impact at retail, but also to build an exceptional "out-of-box" consumer experience. The resulting packaging for Xbox 360 is a major leap forward over the original Xbox in terms of meeting marketing and supply chain objectives.

Package Design Goals:

• Communicate key aspects of the brand imagery: "catalytic," "inviting," "bold," "exhilarating"
• Create a merchandising system and a single structural solution for all global markets

Key Design Challenges and Accomplishments:

• Out-of-box experience: using packaging to add to consumer satisfaction, create immediate "wow" factor, and aid in system setup
• Supply chain optimization: maximizing for logistics by designing to dimensions that optimize shipping efficiency
• Single package structure for both the "core" and "pro" SKUs
• For accessories, leverage package shape to communicate brand and product industrial design and create synergy across an array of disparate products
• Create a retail merchandising system through modularity and common package dimensions

LASER MOUSE PRODUCT LINE

The angular form factor and selective holographic print treatments for Microsoft's first line of laser mouse products create a high-end "wow" factor that is eye-catching yet sophisticated. The uniqueness of the package adds a sense of flair that engages the consumer to pick up the package, explore the product, and transact the sale.

Package Design Goals:

• Differentiate the laser product line from other Microsoft products and competitive items
• Successful form factor introduction across numerous worldwide retail channel partners
• Partnering with marketing to add "pizzazz" to the package
• Consistent with hardware product packaging as well as Microsoft corporate brand
• Continuity of red around the mouse to provide strong tie to rest of Microsoft hardwareproduct lineup
• Black with red precision "laser" graphics to communicate sophisticated technology

Key Design Challenges and Accomplishments:

• Shipping/transportation of a form factor that is basically a cube; potential for getting fewer on a pallet or in a container. Yet, the creative product orientation within the shipping carton resulted in even more product on a pallet and in a container; comparable to more traditional, less unique packaging
• Getting across the message that the new line offers the latest and greatest in technology
• Creating a sophisticated package that ultimately offers interesting positioning on shelf and is noticeable and striking in the mouse aisle, thus creating opportunities for exciting and creative displays in retail

PERFECT DARK ZERO LIMITED COLLECTORS EDITION

To celebrate the launch of this prequel to the multimillon-selling "Perfect Dark," Microsoft revisited the award-winning packaging form of "Halo 2" by offering a collector's edition metal DVD case with bonus items.

Package Design Goals:

• Encourage worldwide use of collectible tin box with branding and localization information on outer clear PET O-sleeve
• Support maximum content inside, including manual, comic book, and collectible card along with two game disks

Key Design Challenges and Accomplishments:

• Mold modification required to enable maximum content under clips inside case
• Partner with "user experience team" on design of collectible card with complex coating and double-sided holographic card stock
• Completed mold modifications to support lower profile disk well and appropriate tray placement to enable intended contents
• Emboss testing and integration of emboss die into metal box ensured precise artwork-to-emboss registration

Swerve Inc. Designs Boxes That Are a Pleasure to Open

When Microsoft was designing the new Xbox 360 game and all its peripherals, they turned to the expertise of Swerve Inc. to design a complete array of structural packaging for the launch. Swerve is a boutique design studio in New York City that specializes in packaging that builds brands, and provides corporations with proprietary designs that promote consumer excitement.

Founding partners Martin Short and Robert Croft appreciate the consumer's mindset when opening a new product, especially something fun like video games. Swerve aims to make the experience of opening any package as delightful as possible by ensuring that the packaging exhibits the core brand values, that the consumers' excitement is maintained, and that consumer expectations are met.

Swerve helped Microsoft design the structural packaging for Xbox 360, including the console boxes and the thermoformed blisters that protect the 16 peripherals (some shown on cover of this issue), keeping in mind a consumer's high level of anticipation during opening. "The package should be enjoyed as a piece of sculpture that compliments the product inside, and also provides functionality and maintains excitement as the consumer enjoys the reveal process," explains Croft.

The challenge of the Xbox 360 project was to "communicate a consistent form language," over a large array of components that were different sizes, shapes, and weights. The strategy was to devise a broad array of common denominators that could be applied to the product line—leading to a cohesive aesthetic effect at retail.

Swerve also designed the package for the Starck Optical Mouse shown here. This is a hybrid package that offers a high level of functionality and differentiation for this desirable "image product." It is reminiscent of a jewel case for a Fabergé egg, and attractive enough to hold onto for a while. Short and Croft realize that beyond exceptional presentation and ease of opening, innovative design can actually control the process a consumer goes through when opening a package. "Attention to detail at that level is really the future," says Croft.

VISUAL STUDIO 2005 TEAM EDITION

The packaging for this release breaks away from the traditional software mold by offering an interactive out of box experience combined with a high end media holder.

Package Design Goals:

• Use out-of-box experience research to create a consumer-friendly package with multiple levels of interactivity in a one-piece box
• Create a package that guides the user through the product components inside as an alternative to the traditional experience of "dump and sort"

Key Design Challenges and Accomplishments

• Gathering and tracking final contents across 15 different products to determine optimal packaging for each
• Finding balance between consumer usability, cost of packaging solutions, and design for manufacturability
• Chose LithoLam carton with white liners based on structural weight requirements, local and regional availability, ability to include printed panels inside the box, and higher-end feel compared to SBS with standard kraft corrugated insert
• After five rounds of design and testing, final box structure offers multiple layers of interactivity and reveal for the end-user:
• The outer sleeve enhances shelf appeal with the embossing of unique branding elements and provides outer level of product reveal
• Internal box mirrors outer sleeve graphics and opens from the front like a book rather than from the top like a traditional software retail carton
• Internal reveal flap has a flood of color, welcomes the user to the product, and provides a peek at the specialty media packaging inside
• Flap lifts up and away from user to reveal media case and third layer of box
• Once media case is removed from internal structural insert, flood of color is retained and graphics direct the user to pull insert out and to the right (as if turning a page) to gain access to final layer
• Thumb notch assists users in removing contents without having to dump product from box