In a surprise move, Microsoft today ditched many of the new policies for how Xbox One treats used games, always-on connectivity, and the role of physical discs.

You can read about that here. It's big news, and places Xbox One much closer to PlayStation 4 on a policy level.

After announcing the changes, Microsoft put me in touch with Xbox chief product officer Marc Whitten, and we had a whopping five minutes to talk with one another. We ended up talking for almost eight!

Here's our full conversation.

Giant Bomb: You guys spent last week talking a lot about the policies that were already in place. Clearly, these were things you had thought about for months, if not years, and were building for it. And just several days after E3, to reverse a lot of these big, bold choices about the machine...why does this come just days after E3 closed?

Marc Whitten: This was our first opportunity, frankly, if you look over the last month, from the Xbox One unveil to E3, to actually lay out what our program is, and to talk about it. We’ve been working on it for a very long time, and this is our first time to start getting feedback. By the end of E3, we’ve given a view across our entire program of how the system works, [from] the amazing line-up of games and how those games take unique advantage of Xbox One and the cloud and what they can do. We’ve gotten a lot of great feedback. It was the time where we heard from everybody and what they loved about our games, what they loved about our vision--but they also wanted more choice. They wanted the flexibility to use your console offline, and they wanted the flexibility to be able to use physical discs the way they've always used them. Frankly, we just listened. We wanted to take that feedback and make changes.

Giant Bomb: You characterize this as responding to feedback from customers, and this being your first chance to respond. But couldn't you have anticipated some of this backlash in the first place? Why do you think consumers were so upset and so vocal about the original policies put in place for the machine?

Whitten: We believe a lot in this digital future, and we think most people will be using Xbox One connected, and they're going to be taking advantage of the cloud with games like Titanfall or with Forza and how it uses drivatars. And, frankly, just to stream content online with video or to play multiplayer. So much of what we believe in that vision, frankly, I do think that people have responded in a really, really deep and rich way--that they love that vision, they love the experience. They love what they saw about how the NFL experience could be changed, for instance. But we clearly heard that there were times that they needed the box to work in an offline state, whether they just wanted to use it offline or were going on vacation or they were in a low connectivity area, and, frankly, that they loved the familiarity of physical discs and really wanted it. So, we just responded to that.

Giant Bomb: Right after this news broke, GameStop's stock went up 6%. Do you think that's related?

Whitten: [pause] [laughs] Uh, I don't know. I'm not a good person to ask about stock market prices.

Giant Bomb: Along with this, a lot of these were related to policy changes in regard to DRM and an always-on connection. Has there been any discussion about addressing any of the privacy concerns in terms of the Kinect, and that being on all the time and also being a requirement for turning on the box?

Whitten: We're really focused on how Kinect can change the experience, and the importance of having Kinect be a deep part of the architecture, so that game creators [and] experience creators can always take advantage of it. As a user, you can rely on it always being able to work. That said, we're also focused on making sure that you're in control, that you understand what Kinect's doing, and that you have great privacy controls around them. We've put some information there on how that's going to work on Xbox One. Of course, I'll also just say that you have the choice to have your console work offline. We're here to give you control over that experience.

Giant Bomb: The machine does require a connection at least once when a user purchases it. Why is that?

Whitten: It was always part of the plan for Xbox One. It's as simple as the difference between our manufacturing schedules and our software schedules. There was always going to be a day-one update when we launched it.

Giant Bomb: Regardless of these policy changes, you guys had built in that there was going to be a day-one update to the machine, even if when these policies were announced, everyone was honky dory?

Whitten: Oh, yeah. It's always been the plan.

Giant Bomb: You guys have mentioned that this essentially kills, at least for launch, some of the more progressive, interesting policies, such as the family sharing and lending policies. Are those killed permanently or are they things that can come back in future software updates for the operating system?

Whitten: Part of it's a mix because of the reality of how you're changing the experience. Let me give you an example. Before, one of the things that's exciting about a digital ecosystem, is if I go to any Xbox and I see all my games, they show up in my games library? Well, obviously, if you're gonna use physical discs, those games wouldn't show up because it's only showing the content that's in the cloud--that's in your online library. That wouldn't change. The difference is the choice you have of using physical discs or having purchased things online. That said, so much of how we built the program is really built on that digital infrastructure. You get a ton of the advantage of that at launch, and we're going to continue to invest in that. Examples are, obviously, things like day-and-date [digital purchases], and I can choose to buy either of them online or physical--it's my choice. Similarly, if I went to your house with my physical-based game, and we played and I left and took my disc with me, you could instantly purchase that game with no download because it's all built on that same functionality. You're going to see us continue to really invest in that. We believe a lot in that cloud powered future.

Giant Bomb: Does that mean, specifically, the family sharing and stuff like that is not off the table, or just something we're not talking about for launch?

Whitten: We're talking about where we are at launch, and we'll continue to invest and deliver interesting, cool, new scenarios. We'll see where we go.

Giant Bomb: Some of the games you mentioned--Titanfall is one, Foza is another--are games that are investing in the cloud infrastructure to enhance the gameplay experience. Obviously, third-parties have a little more leverage in terms of how they handle those policies, but Forza is a first-party game. What happens for the consumer that chooses to just be offline, and purchases a copy of Forza? Does that impact their singleplayer experience, or only start to cut them off from things that require the cloud, such as drivatar?

Whitten: It's really up to the game creators. Either in first-party or third-party, we don't have any specific policies around that. We want to give them access to a ton of capabilities in the cloud, we think most people will probably be playing connected to the live service and to our cloud servers. We think it can really change the experience in a whole bunch of ways, and, frankly, we hope we see game creators come up with amazing things that could only happen when you're connected to the cloud because they're using that power. If that's single player, multiplayer, whatever--that's their choice.

Giant Bomb: Last question, and I'll let you go. How do you think Sony feels today?

Whitten: [laughs] You know, I don't know. I focus on listening to our customers and our fans. I love the fact that they tell us what they love, and they tell us what they don't love. Frankly, that's what we've always been doing around here--to deliver what they love, and make changes when they don't like things. That's our focus.