GamesBeat

Microsoft making $1B bet on Xbox One games, says bigwig Phil Harrison

phil harrison

Phil Harrison was once head of worldwide development for Sony’s PlayStation brand, leading that platform for years. But now he is a corporate vice president at Microsoft’s Interactive Entertainment Business (IEB) and took a prominent role in this week’s Xbox One video game console announcement — including being part of the company’s confusing messaging about used games.

On Tuesday, he sat down with us to talk about the Xbox One, the company’s first new video game console since 2005. This time, Harrison is one of the executives touting Microsoft’s expansion into non-game entertainment and future investment of more than $1 billion in the next generation of games.

That includes eight new creative works and 15 internally developed games in the coming year. That’s a pretty ambitious plan, and it’s more than Microsoft has spent on a console launch before. In the meantime, Harrison has to try to stamp out fears that Microsoft will be anti-consumer in its policies for dealing with used games, backward compatibility, and always-on Internet connection requirements.

He also argues that Microsoft will preserve an element of “curation” in allowing games onto its platform. In short, Harrison says that the company isn’t headed in the wrong direction.

Here’s an edited transcript of our conversation.

kinect frownPhil Harrison: It gives me great pleasure to say, “Welcome to Microsoft.” Isn’t that a strange thing for me to be able to say to you?

GamesBeat: What’s it like being on the inside of the empire that you used to fight against?

Harrison: Did we have a fight? I don’t know. I enjoy it. I love the team. You know these guys well from your various inside perspectives on the Microsoft team. I think it’s a very smart team. Not just inside the Xbox group, too, but the broader Microsoft family. They have impressive people and capability and technology. It’s great.

So what resonated with you? What sort of things were you surprised or impressed by?

GamesBeat: Kinect has a very large design space. You could do a whole lot more with it. They measured our heartbeats and so on. It’s a very big room, a wider angle, covering six people.

Harrison: Kinect for 360 was very innovative. It delivered some incredible experiences. But the degree of movement was quite exaggerated. Now, as you’ve seen with Kinect for Xbox One, it’s millimeters and nanoseconds now. That level of precision can actually equal subtlety. I think subtlety is one of those things that game designers are going to enjoy.

console shotGamesBeat: Based on what’s in the works for Kinect, will games go in a direction that they haven’t gone before?

Harrison: The fundamental, most impactful thing is that there’s a Kinect in every box now. There’s the ubiquity of the platform having Kinect whereas before it was always a subset. That made it difficult for developers to invest against 20 percent of the installed base or whatever it was.

Having it as 100 percent — that’s a game-changer. There are games that are not using motion but using voice in a very subtle way. The conversational understanding in Kinect for Xbox One is super sensitive and smart. It allows us to do some subtle things with voice that we couldn’t do on 360. You’ll see that at E3 [Electronic Entertainment Expo]. I’ll point them out to you.

We have a couple of cool examples of that where — even though your game is a fundamentally controller-based experience — the voice becomes this augmented menu system. Previously, you’d have to go down N number of menu trees to get to a particular feature. Now you can just say it. That’s pretty cool.

And then movement can be subtle. While you’re playing the game, it could be just doing some very gentle movements that [Kinect] can pick up and then amplify in the world.

GamesBeat: On strategy this time around, what is some of the thinking? How much of a walled garden are you going to build? How closed or open should it be? We’re in this different world with iOS and Android now. There are other kinds of devices you want to connect to. What’s the thinking for design in that space?

Harrison: We like an element of curation in the content landscape and the content experience, but that is definitely getting more broadly curated than it has been in the past. I’m not sure I would describe it as closed versus open because that implies a more binary shift. I don’t think you can be partly closed or partly open. It’s more about curating content — the developer tools for building games or building snap-to applications — particularly the snap-to applications. That’s much closer to Windows 8 development. The developer ecosystem that we can tap into has gotten orders of magnitude bigger, which is great.

In the past, as you know, Xbox had retail games, it had Xbox Live Arcade games, and it had the indie channel. These were three very discrete clubs that we didn’t really cross-pollinate. Now they’re just games. The discovery tools that we’ve built into the system, the recommendation engine we’ve built into the system, and also something we didn’t talk about today, which is game DVR — that’s the ability for your game moments to become video, which you can then share socially — that becomes a great discovery tools for developers. It solves one of the massive discovery problems that you have in games irrespective of platform.

We will make more announcements at E3. We’ve done some very smart platform architecture work that unlocks it at a platform level. Then we can build various features and functionalities on top of that. We’re doing something that will show more of it at E3.

msft aboveGamesBeat: There’s been a lot of chatter on particular controversial subjects leading up to this. People want to know about used games, about backward compatibility, and about the constant connection. What are some of the facts on those? Can you play used games on the Xbox One? Do you have to pay a fee?

Harrison: Just like today, if you have a game disc that you buy from the store, you can play that game. The game is now installed to the hard drive. Any user who is associated with that Xbox One can play that game. I can give that game disc to my son and he can go and take it to another machine inside the house and play it on that machine. Just like today, only one of us can play it at any one time.

The difference, though — the benefit of Xbox One is that that data can roam with me. I can go to my friend’s house. I can log in as myself into his machine. I can then play that game on his machine, and while I’m logged in, he can play it as well.

GamesBeat: Do you bring your disc with you, or could you use his disc?

Harrison: Doesn’t matter, yeah. If I bring my disc with me and I leave the bits on his hard drive, but he wants to play the game, he can buy the game — just like today. But in this instance, the bits were already on his hard drive, so it’s an instant switch-out. We will have a solution — and we’re not talking about the details today but just to take the angst out of this — that allows a user to trade that game back in and to give up the right to play that game.

GamesBeat: Backward compatibility is an interesting question because cloud technology has arrived. Technologically, it seems possible to do backward compatibility, but it sounds like physical backward compatibility is not possible because there are no similar chips in there.

Harrison: Backward compatibility is a non-trivial engineering task. We have made a very conscious decision to invest the system resources in building experiences for the future rather than supporting backward compatibility. The only thing that’s portable from 360 to Xbox One are your media purchases: Your music and your television shows and your movies that you purchased through the Marketplace.

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GamesBeat: But could Microsoft still choose to release a version of a 360 game that’s playable on this new box? You’d download it from the cloud and play it on your new machine.

Harrison: That is not our plan today.

GamesBeat: Is that another issue of resources, then? Or is it something else?

Harrison: My personal perspective is that backward compatibility is a relatively narrow moment in time. If you want to plug your Xbox 360 into HDMI in, you can.

GamesBeat: I like this whole cloud hardware idea, though.

Harrison: It’s a wonderful quote. Did you pick that up from Mark’s speech this morning? Day one of Xbox One, we will have over 300,000 servers dedicated to Xbox One in the cloud, which have an equivalent computing power greater than the world’s computing power in 1999.

GamesBeat: John Riccitiello wrote an interesting piece yesterday. He was addressing price, and you guys aren’t talking about that yet, but some of these issues seem to resonate. He thinks it’s in everyone’s interest to have the right price on this, to have plentiful supply, and to have the entertainment options there but not weighing down the box and making it complicated to find and discover your games. The games should be front and center. If you add too many options, at some point the interface becomes harder to use.

Harrison: The dash experience you saw today is dynamic. It’s personal. It’s customized to you. The last things you played or did on the platform are the things you see first when you switch the machine back on again. As you play games, games will be the things you see. The more games you play, the more games will be recommended to you. That will learn over time. It will get more perfect to your choices, to what your friends are playing, to what you like, [and] to what your region likes.

As a user, you are entirely in control of how your dash ends up being populated. Either explicitly by saying, “I want these things to go here,” or dynamically because of the choices you make.

GamesBeat: Is there a big increase in the staffing here? I think Phil mentioned that there are more games in the works than ever before — 15 big games coming and eight completely new ones. That sounds like a pretty big investment. I don’t know if it’s caused the organization to get bigger or if there were comparisons to 10 years ago.

Harrison: I don’t know the numbers off the top of my head, but I know that IEB has grown every year for the last few years. We’ve made a substantial investment in our hardware team and a substantial investment in our platform teams to allow the innovations that you saw today. From a studios perspective, we are investing, I believe, a billion dollars for content development just for games, which is more than we’ve ever spent in our history. We’re starting new studios. We’ve started studios in London [and] in Los Angeles. We’re growing our organization. This is a fantastic opportunity. It takes a lot of people.

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GamesBeat: Do you guys support something like Unity as well?

Harrison: We have a relationship with Unity on 360, but we have not made any announcements about Xbox One.

GamesBeat: I’m just wondering about how you would get to the broader number of games. Sony chose Unity to make it easier for people to port any cross-platform games over to the PlayStation 4. You do support apps, so there’s a larger possible number of developers. Do you expect thousands of games to come in through the wider funnel there?

Harrison: You know better than anybody that Microsoft has had a long-standing investment in excellent developer tools. It’s a core principle of the company. Whether it’s on the Xbox side or the Windows 8 side, there are excellent tools and support for developers. That will continue to be the case. I don’t think we’re deficient in that space in any way. I was always very envious of Microsoft’s investment and capability in this area when I wasn’t here.

GamesBeat: A part of the world that’s different is the mobile developers. How do you invite some of them in? Because of the curation, do you want them to be part of this as well?

Harrison: We want great experiences that are well-suited for our platform. Our platform supports many different types of experiences whether they’re controller-based, whether they’re SmartGlass-based, or whether they’re Kinect-based. We welcome one and all. The more developers, the better. The more content that we get for our platform, the better. That makes the ecosystem more vibrant. It makes the content possibilities and opportunities more local around the world, which means experiences that are culturally relevant to a broader set of countries. That’s a big part of what we’re trying to do.

GamesBeat: How do you make this an even bigger thing — an even bigger business than it was in the last generation?

Harrison: If we had just introduced a game console, I think our market overall would grow. But by having a game console combined with reinventing TV, making your TV really smart, [and] making the entertainment you love easily and readily accessible all in one device, I think we give permission to a whole new set of consumers to adopt our technology. By making it simple and instant and complete, it means we can get men, women, old, young to enjoy playing and interacting with the device. It’s not just about core gamers; although, they are incredibly important to our future. It’s also about finding entry points for all members of the household.

One of the things that I don’t think we truly understand the significance of yet is automatic identity through Kinect. If your wife or your daughter or your son or yourself starts interacting with the machine, it instantly switches to their choice of content, their profile, their personalization, their recommendation. That alone, that simplicity, is going to dramatically increase the number of people who want to interact with Xbox One. Whether they choose to play games or consume other forms of entertainment is up to them, but I think that giving them the permission, if you see what I mean, or reducing the barriers to entry is one of the smart things about the strategy that will grow the market.