Gates Interview Part Three: Xbox 2 and Xbox Live
gates3.jpg imageHere's Part 3 of our discussion with Microsoft Chairman Bill Gates, where we talk about the Xbox 2, its role as the hub of the next generation's living room (hint: maybe not the center, but it's sounding awful hard-drivey. Also, "base thing?"), as well as Microsoft's plans for the future of Xbox Live. If you want to catch up, start with Part 1, then head over to Part 2.
Gizmodo: To sort of get back to the Digital Homewhich is obviously the direction Microsoft wants to go in the short term, if not the long termhave you seen that the middle [sales] penetration of the Xbox in the first generation, definitely better than Nintendo's offering, not up there where Sony is, but definitely a strong #2... Do you feel like in the next generation all the home integration pieces of the Xbox 2 is going to be what it's going to take to move you to #1 as the most adopted console?
Gates: There's no doubt Sony will do a great next generation box and we'll do a great next generation box and that competition will be very healthy. People will have a choice. Some of the really hardcore people will end up with both. The next generation is just going to be another dramatic improvement. What we want to do is grow the business as a whole by making the games far more approachable.
Today, if you're not an aficionado, if you sit down, if within five minutes you don't know what the heck is going on... We need a lot of new genres of games. Now Xbox Live has been one of our great triumphs. They are bringing into the game experiencetalking to your friends, being able to meet people, do contests, have spectatorsand that we think is a super-important feature going forward. You're going to see brilliant software creativity around Live.
Gizmodo: What do you think the chances are that you guys might offer Live without a subscription fee in the next generation? Just assume that everyone that has an Xbox will have the capability to use it?
Gates: There will always be some elements of Live that we'll offer for free, but there will be significant portions of Live that we'll offer for subscription. And the subscriptionwhat is it, $39.95 a year?I mean, hey!
Gizmodo: It's not that it's expensive so much as it is that with... If everybody had it, there might be more opportunity for develops to come up with games that utilize it.
Gates: We expect the penetration of Live in the next generation to be over 80%. We'll put enough value into it to make that very, very attractive for people. So anyway, we're investing a lot in having Live just be dramatically more. Obviously, we'll connect Xbox Love up to what we do with Messenger, so the idea that you can share music, talk to your friends, video chat with friends, voice chat, text chatall those things between the Xbox world and the PC worldas the Xbox evolves, we'll get that going. So there's some nice connections that can take place there.
Gizmodo: Now I know you've said that you're not interestedat least for the momentin mobile gaming. It's just not a direction you're looking to take the Xbox platform. But there has been some talk that the next generation of Xbox will be integrated, or that there will be a lot more integration, [like] using it as a hub for personal media devices: video players, flash memory drives, things like that. Have you guysis there anything that you're moving in that direction for that platform yet? Specifically, where it comes down to using the hard drive of the Xbox to store MP3s or store Windows Audio and then copy it to a flash drive; things like that.
Gates: Well, the PC is our superset device in terms of media integration. You'll see a ton of that stuff you see on the PC, like the ability to listen to your tunes... we did some of this on Xbox 1, where you could move music over and have tracksit wasn't a required feature for the games. We did build in the music mixer-type stuff, but we'll build a lot of that stuff into the base thing. We're evolving the photo and music stuff that's in Windows and Xbox will get some of that extra capability. So you'll see more synergy between Windows and Xbox. And we think these portable media devices, whether they are music only or with video, will take off. So we'll make sure that we connect up as much as we can.
The portable space... It's not like we're saying that's a boring space or anything. There just happens to be one or two things that Microsoft isn't doing. And we probably benefit that Sony is fighting Nintendo and has a real challenge on their hands with PSP versus DS, while our group is totally focussed on the next generation video console.
In terms of #1 and #2, we did in November and December, just slightly outsell Sony in the US. The only place where we actually didn't do well with Xboxif you took all the expectations we had going into itour sales in Japan is the only place we didn't achieve much. Not at all. Wherein Europe and the US, we did super-well. With Xbox Live we did very well. Our relationship with the game publishers we did well. And so we certainly are empowered to, as they say, 'play again.'
Gizmodo: And I don't think anybody is going to miss you in the portable space at this point, because you have these two titans butting heads.
Gates: There's also, in the long run, there's this question of the phone device, as it gets more gaming capability. More people believe portable PCs, as you see [the] Tablet form-factor and what we call 'ultra-mobile' PCs that are really quite small, there's going to be quite a bit of stuff there.
There's no way portable gaming can come anywhere near the high-definition gaming that we'll offer in the console-based product. The amount of power and heat that we get to budget for that [console] is two orders of magnitude more than you can do with a portable device. Just to get, you knowwe have to have fans, we have to have multiple fans. I mean, we're turning out hundreds of watts in that thing because the processor and the graphics are just total state-of-the-art incredible devices.
Gizmodo: And a lot of the XNA stuff, if I'm not mistaken, is sort of setting up the infrastructure for that in the future. That you could go ahead and develop one thing, and it'll work on a phone, but when the next phone that comes out and has more power, it'll still work on that [new] phone. Just sort of like PCs are now, where you can move up within capabilities within the same software.
Gates: XNA actually takes it at [the] sweet spot. There's a lot of stuff that works on any platform, but it takes the sweet spot between Xbox and PC, and making itthe amount of work, if you want to target Xbox and PCthe marginal work is like 10 percent, as opposed to 50 percent. And that's whereby making all the Direct 3D stuff the same, and the production environment and the tools environment the samethat's where we want it to be really obvious that you can do both.
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