So, why Microsoft?
I had five fantastic years at Nintendo and really loved the consoles I worked on. From there I saw a great opportunity to move into mobile gaming and ran I-Play for four years, but I really wanted to come back into consoles for some really specific reasons.
One is that I'm a great believer in the industry. I think this industry is going to see continued, consistent growth over the next five to ten years. I think it's destined for fantastic things.
I also think that industry history won't dictate the future. In the past, it's been about consoles and packaged goods, it's been about a niche gamer, not a mass market gamer, and I think this market is being re-defined and will continue to re-define itself.
Microsoft has the installed base and there are incredible levels of R&D going on in this business and in this company. Looking at how the future is going to be different from the past, I really believe that Xbox is potentially uniquely positioned to win in the console space.
We've heard a lot from Microsoft about broadening 360's appeal – what do you think needs to happen to achieve that aim?
What we're going to do is continue to appeal to the core gamer – that's very important and is a pillar on which this business has been built. But what we're also going to do is broaden and become increasingly appealing to a new generation of gamers.
Nintendo has done fantastically well with Wii, but I think we will be supremely positioned to offer something to this new generation of gamers that will soon look to graduate from that entry point.
You'll hear a lot of things from us in the coming months about games that have that broadening message. We'll create a compelling opportunity for that new generation of gamers.
Has the price drop helped? Are you happy with how the 360 Arcade SKU is performing?
If you're going to appeal to a broader market then price is critical. We know that. You also need the right gameplay experiences. You need innovation and the right content. But what's very important to us is that we will continue to bring broader games and we have fantastic studios that will do that.
The other element that is really critical here is Live. It gives us an opportunity to really build a social network in the living room. We have the opportunity to go to end users and say: Xbox is more than games.
What we have is an opportunity to claim the digital entertainment high ground by continuing to excel in games, across core and broad sectors, and bring an entertainment living room experience that is really driving from a digital downloads perspective rather than a packaged goods perspective.
Do you think Live is too complex for the casual user to sign up to? Are you looking to address that?
What we have to do is make it very, very easy. That's the focus of the business today, to put the end user at the centre of everything we do. That is fundamental to everything we intend to do and you'll hear lots from us in the coming months about how we intend to do that.
Weekly ChartTrack figures suggest that PS3 has been outselling 360 for a while now – how do you plan to keep ahead?
We are going to invest to win in Europe. There is no question about that. We understand the challenge in the region. We understand what we need to do to continue to drive the growth of the business. What we need to do is not just pay lip service to this but really invest.
And when I talk about investment I'm talking about people, the resource in the market, dedicated focus and launch-level marketing spends across media, retail and all areas – that's where we're going to make the difference, by driving awareness of the brand and our broadening proposition across all of the regions in Europe.
How do you respond to analysts who have said Xbox 360 sales have ‘hit a wall'?
If we look at the momentum in the business in the last few months, the trajectory has changed significantly. My only message to the analysts is to check their numbers.
We have some very aggressive plans in terms of investing in this market to be successful. We are in Europe to win. We're not here to come second or third.
Anyone trying to call a winner this Christmas is calling too early. We are incredibly well positioned. Some numbers can be mis-interpreted. Our installed base in Europe is well over five million and contrary to what's been reported we are at least, if not more, three quarters of a million ahead of PS3. We will talk about installed bases – if someone else wants to talk about shipments, that's fine. Shipping a console doesn't mean a sale.
Can you give us a taste of what Microsoft has planned at E3?
It would be churlish of me to ruin the fantastic surprises awaiting everybody at E3. Clearly we'll use that to make a number of announcements.
We place a huge amount of importance on R&D and innovation. We're always working on new things. And you'll continue to hear lots of things from us that we believe will be game-changing. But you'll just have to wait for those to be officially announced by us.
Microsoft has told us previously it is looking into ‘peripheral-based gaming' – what are your plans in this space?
We know it is all about simplicity in the mass market. We can do that with a controller – we can do that with today's controller – for me, casual gaming is really a mindset rather than a genre. It's got to be easy to play and difficult to master.
If someone wants a quick race on a racing game, they should be able to do that, but if they want to spend three hours on it they should be able to do that too. Games studios can design games that are appealing for everyone without getting to the lowest common denominator.
Do you think casual gaming can satisfy consumers in the long term? Is there a danger in focusing too much on gimmicky peripherals?
I think the guys at Nintendo with Wii have done a truly amazing job and they've grown the market, which is fantastic news for everyone.
It's clear that if you innovate, you create new gaming experiences. I know from Iwata-san and Miyamoto-san, having worked with them, that innovation is what drives them and they're hugely successful at it.
For many people that's the first step on the gaming ladder. People will want to gradate to a basic entry point into a console that will deliver a more rounded gaming experience. That's the opportunity for Xbox.
We've heard a lot from Sony about PS3's ten year lifecycle – do you think 360 can last as long?
This is going to be the longest product lifecycle we've seen. In the past there has tended to be a quicker-than-needed move from one generation to another.
We're in this to entertain our users but we're also in this to make money, and the latter years of a console's life is when you make a lot of money from software.
It would be wrong for me to say where a console generation ends or begins, but with the next generation I think the challenge the industry has is to look at what it does today and continue to innovate.
When you can deliver an experience that is truly, truly step-changing, that's when you deliver the next console.