Why is something that's effectively a software update being treated as so important by Microsoft?
My feeling is that this is our most important day since we launched the Xbox 360. It truly does reinvent the machine. It's our goal to turn it from a pure games machine to a multimedia device, allowing more entertainment to come to your TV than any other device out there.
This new update makes it easier to find things on your box on our service. It's more accessible for navigation, and frankly, much prettier. Then, of course, there's a lot of great new content. Also, we've fixed a few complaints people had – making things much easier to find. In the US, we've teamed up with Netflix, allowing people to watch movies on demand for free. This is the best broadband device for your television.
You're helping fans without the requisite memory upgrade to cope with the software update. Can you promise this process will be completely hassle free?
We're trying to make it as hassle-free as possible. Part of the new experience is that we require offline storage for catalogue information to help the great experience.
120MB is not a lot to ask of people, but we also recognise that there are some people out there that don't have that storage.
We've launched a website, where we've targeted the users who are online who might not have enough storage – or have enough and have their system filled up.
Those core members that have a smaller memory unit can get a free 512MB unit. The bigger win for both sets of users is the hard drive option – which is phenomenal. We wanted to make that option as attractive as possible, so we've cut the price and we are seeing a great response.
What might you to say to a Core owner who feels a bit left behind – the hard drive still costs a substantial amount for some consumers?
Well, so long as you have some memory, which everyone can have, you can still have a great Live experience. It's going to be working to a smaller memory specification, but that's not something that's new to Arcade owners. The majority of our bigger content exceeds that limit already.
The Arcade system is a great entry-level system, but to truly enjoy all that Live has to offer, I'd heartily recommend a hard drive.
One of the major themes of your Tokyo Games Show announcements this month was that the update would make this a full entertainment package for your TV. Are you battling against the likes of Virgin Media and Sky?
I don't know if it's as much as a battle as our goal. The consumers who own our box are games savvy people who like playing video games. But a lot of us – myself included – are digital media consumers. We download video on demand, movies, we watch TV, we go to the movies.
What's great about Xbox 360 is the great online service – with 14 million members now – has afforded us new opportunities. We often refer to it as the largest social networking device in your living room.
Do you see a time when Xbox Live will become Microsoft's main form of delivery to the consumer?
It's certainly our goal for Xbox Live to be more than just an online gaming service and add new digital download opportunities. We're putting a lot of resources and money and time behind Xbox Live, continuing to grow that service. It's a huge part of our future and is very important to Microsoft as well. We get a new member every five seconds, so we're certainly not shying away from that and see it as a great advantage we have. The reality is, we want to go even further.
The digital download sector is currently dominated by retro or niche games. Are you looking forward to more ‘adult' releases, such as Warner Bros. Watchmen – for which the publisher is cutting out retail from its release?
That's exactly what Xbox Live enables. There are games coming that would not get the space at retail, and that's a big part of why we're refreshing the system.
We want to widen the content to make it more accessible for different users. It's pretty hard to get retail distribution these days, and shelf space continues to be a challenge and people are opting for that – Penny Arcade is a great example of that. Look at Geometry Wars 2, Castle Crasher and Braid. They're seeing tremendous success. That's exactly what we want on our service – when retail gets pressured, you can go online.
So would you expect the number of downloadable ‘triple-A'-type titles to increase on Xbox Live going forward?
We're going to continue to see a great mix. At retail, you can find casual games, RPGs, action games. We are like an online retailer in essence with our Arcade, and you are seeing those titles.
When will Xbox Live reach the magic number of 20 million members?
We certainly have our eye on that number and I think we'll achieve it. We announced at this year's TGS we now have 14 million members. We've exceeded our goals by a large margin. The new Xbox Experience will really push us towards that number.