Today, during a livestream on Mixer, Microsoft’s Xbox division head Phil Spencer talked about Project Scarlett, the company’s E3 show and preparations for the next, the games that weren’t showcased, Project Xcloud, the MOU with Sony, and more.

Spencer talked about the memorandum of understanding between Sony and Microsoft, mentioning that brands don’t need to exist at the exclusion of others.

Sony and Microsoft have a long history of working together, and while this is is just an MOU, and that’s basically the announcement of two CEOs shaking hands and smiling into a camera, “there is real intent there with Azure and Sony” and Spencer thinks it’s great. There are other initiatives like that like Xbox Live on Switch with more IP there, and Microsoft’s games coming Steam.

Opportunities for collaboration are something Spencer really cares about, and others in the industry do as well. He believes it’s great for the industry as a whole.

Speaking of the preparations for the next E3, Spencer explained that Microsoft starts to plan for the next week after this one finishes. They’ll begin compiling what worked and what didn’t. In December, the company really starts to get the show ready and begins deciding what kind of stories they want to tell and what themes they want to talk about.

In January he’ll likely have the first meetings with the teams and look at what games they might want to show and what they want to do with the hardware. There will then probably be two meetings a month in January, February, and March.

At the end of April or at the beginning of May, the team will be in a production studio in Redmond to start rehearsing the show and moving the games around. For instance this year they had two Star Wars games and two LEGO games, and they didn’t want them all next to each other. On the other hand, for the PC version of Game Pass, they wanted to have games on stage that made sense and felt “native” to PC even if there are many more games within the service.

The show for this year was locked three weeks ago. There were two rehearsals on Friday, two on Saturday, and then it was time to go.

Spencer explained that E3 is an expensive endeavor for Microsoft, and they spend tens of millions of dollars putting it together. Hundreds of people from the company come from all the studios around the world. The press conference was basically a full television production, and then the team took the stage and transformed it into the booth for the rest of the show.

With every E3, Spencer always wants to do a little better. That’s why next week the team will go through what could have gone better this year. He heard the feedback mentioning that people want more gameplay, and entered that into OneNote so that he’ll be able to see it in December when the meetings kick off.

Speaking about the reveal of Project Scarlett, Spencer mentioned that traditionally console manufacturers want to keep people buying the current hardware. The traditional view is that not talking about the next hardware too much means not depressing current sales. For Microsoft, that’s not the case, because the full backward compatibility means that if a customer buys an Xbox One X today, all the games and accessories they buy are still going to work in the future.

“It’s not quite as “before and after” as it was.”

The team started talking to third-party developers about the platform in the fall, about nine months ago. The words and codenames started to get out there, and the specs started to kind of getting out there as well, so Spencer had to sit at events pretending that he didn’t know what people were talking about.

With Scorpio (the code name of Xbox One X), Microsoft started talking officially about the console 18 months before, and Spencer thought it was good. They were transparent with the customers about what they were designing towards. That way customers could decide whether to purchase an Xbox One or just wait for Xbox One X.

With Scarlett, they have started talking about it early as well. There are a lot of elements that still haven’t been figured out, but Microsoft already knows what the silicon is going to look like, and what the design criteria are. A lot has been learned from Scorpio and applied to the Scarlett announcement.

At some point, they’ll show what the console looks like. Of course, from a marketing standpoint, Microsoft wants to have different beats of news. Spencer knows what the console is going to look like already.

“I know what it’s going to look like. I think it’s a cool looking “new” thing, which will be interesting, but we don’t have the final ID [Industrial Design] done, so it’s not like we’re going to put out a half-done ID and say “this is kind of what it’ll look like.” We’ll wait on that, because that’s not really what’s going to determine purchase decisions. Even the name. I hope somebody is not making their mind or decision on this product based on what it’s named.”

That being said, Spencer knows that the price point will be relevant.

“The price will be important. Clearly price is one of these things people want to know, and as we’re kind of watching the cost of the components that are coming in, things like tearups and other things, trying to figure out what that price is going to be next year… We have a design price in mind, and I think we’re going to hit that, but we want to make sure that everything comes in right, so that’s the price that we hit. So, we’ll get the price out as soon as we can, so that people can make those decisions.”

Speaking of Project xCloud, Spencer explained that people should think of it as a service for someone who wants to play games. If you already have an Xbox, “there will be a certain [pricing] model around that,” while if you don’t have an Xbox at all, there will be another model. Spencer sees it as a “convenience feature” for people who like to play on Xbox games, whether they play on console or PC, and they want to take that experience on the go.

“I never tried to position Project xCloud as a replacement for your console. I don’t think about it that way.”

xCloud and the console are parallel to each other. If one doesn’t care about taking the Xbox experience on the go, they might not need xCloud at all.

Spencer also mentioned the games that weren’t showcased at E3.

“The thing I loved were the games that we didn’t show: what’s Playground’s second team working on. What’s The Initiative doing. What’s Rare’s second game that’s coming. What’s Turn 10 doing. We haven’t really been before in a first-party situation in which we can have more first-party games that we’re ever had, and a lot of the questions I get are, “wait, I thought you were going to show this or that.” I think it’s a great place for us where we can actually get the right thing to show at the right time and not have to rush things on stage. It sounds like I’m trolling people, but I’m not trying to do that. I am honestly as excited about the things that we didn’t show. We opened with four first-party games which we’ve never done before, which I thought was an awesome line-up, it’s nice to have some things also still going that we’ll show at the right time and hopefully drive excitement.”

Lastly, he mentioned that he often sits at the table with the leadership team of Studio Heads: seeing them talk to each other about things they’re thinking about, and watching them build on each other’s ideas when they go visit each other “such a powerful capability” of the organization.