In March of 2014, Microsoft Studios chief Phil Spencer was tapped to lead Xbox.

Since then, he's been working with the folks at Xbox to shepherd the production of a new, much more powerful model of the Xbox One console: Project Scorpio.

Gamasutra recently visited Microsoft's headquarters in Washington to chat with some of the people who worked on the console, including Spencer himself.

We excerpted some of his comments in our in-depth feature on the Scorpio and its dev kit (which you should read if you want a deeper dive into Scorpio's specs) but since our conversation with Spencer wound up touching on a lot of topics that game developers care about, it made sense to also publish it as a straight Q&A.

Here then is a rundown (edited for clarity) of our conversation with Spencer about everything from Microsoft's VR plans to the future of the game console business, and how Project Scorpio represents an attempt at "learning from some of our PC heritage."

Let's start with an overview of your work on Scorpio. How involved were you in the design and development on this new console?

Fundamentally, my role as I see it is to enable the teams on Xbox to do their best work. So depending on what the teams are working on, the things I have to do are somewhat different. In the case of Scorpio and S, 'cuz we kind of built the plan for them simultaneously...well, it's almost been 3 years I've been in this job. Hardware is one of the longer lead time things. It just takes longer to build hardware than it does...well, games are similar, but in terms of platform or service things, we can do those more quickly. When I came in, I thought we could refresh the original Xbox One and I knew if we wanted to get that done in some timeframe that made sense, we were gonna have to start that quickly.

"I was thinking about console generations being able to take on some of the advantages that PCs have. Without becoming PCs themselves."

So my role in that case is setting context for what we want to do, and letting the smart teams go off and come up with the ideas about what's possible and then we come back and fundamentally, at some point, I have to make a decision about what we're going to do. In the case of Scorpio, the decision really was, we knew we were gonna go do S. There were some specific things we wanted to get done with the S console than were different than the original Xbox One. And then on Scorpio, the decision was, okay do we ship a higher-powered console?

We saw 4K TVs coming, and we made a prediction that 4K TVs were going to be a thing during this generation. As opposed to when you think about original Xbox to 360, the SD to HD transition for TVs kinda happened basically as the generation happened. So it was nice because we could just kind of ride that and say okay, 360 is an HD console. OG Xbox is an SD console. Even though there were actually some progressive mode games on the original Xbox. Still, we could use that as a kind of clean cut.

But we thought 4K TVs would get to scale in the middle of this generation. So we designed a console for 2016, and a console for 2017. We were kind of working on both plans simultaneously. And at some point, we got to -- let's just call it greenlight. For what we would do in 2016, and we sat around a table not too dissimlar from this and said, I think we need to do more than what the silicon is that's available in 2016 at a price point that a console customer would want to pay. So that's when we stopped that effort.

I actually don't remember what the codename was for that effort, but we stopped that effort and said okay, we're going to put all of our weight and execution capability of the hardware team behind delivering a higher-powered console in 2017 that's completely geared towards 4K. And then as we watched how we built it, we realized we could actually build some benefits for the -- I'll call them the 1K customers as well. The 1080p customer. Because the capabilities of the box don't dictate that somebody builds their game in 4K, or that you plug in a 4K TV. So if you're running one of our games in 1K, we wanted to do better there as well.

So my role was to set context, when the teams need decision-making to unlock progress, be the person that takes the tradeoffs and makes the decision, and fundamentally be accountable for what we go do.

Have you been working on this since you started in this role, roughly 3 years ago?

Yeah, it was pretty close after that that we started on what our hardware roadmap was gonna be.

And if you remember in the 360 generation, just to use that as an example, you know the original Xbox 360 did get a refresh to a new console. So it's not out of the ordinary that we would build it, even if it's just what we would call an industrial design -- or ID -- refresh. And sometimes it's a lowering, where we learn where we could save a little bit of money, we would do that also.

So pretty quickly we started on what our hardware roadmap would be. I remember when I came into this job, and I think about the role kind of in this way, there were service things that we wanted to go do with Xbox Live. Things around like, moving Netflix and things outside of Xbox Live Gold requirement, there were just some fundamental platform service decisions we wanted to make with Xbox Live. So we made some of those decisions quickly. On the platform side, back-compat was one of the things I was pretty passionate about. And we had a bunch of other work we wanted to go do on the platform side.

Spencer announcing Project Scorpio at E3 2016

But if I think about service, platform, hardware, first-party, and then I'll call it developer, that's kind of how I look at the job. And in every one of those areas, there was a real desire to go and rethink our plan. Not rethink and redo, sometimes you rethink and you say what we're doing is absolutely what we should be doing. And then in other areas you say okay we're going to wanna rethink the plan that's in place, and do something new. The ideas behind S were in flight slightly, because we knew we would do something in terms of a hardware refresh. But in terms of something more powerful, that kind of came in at that time.

Okay, let's zero in on that developer column. What was the goal there, in terms of strategy?

Yeah, this one helped me. Because my role prior to this job was head of first-party. So I was a developer on our platform. Like, I lived through shipping games like Ryse and Forza and other things. Using the tools and capability that were there on the platform.

And I'll say, we slid into the launch of Xbox One pretty warm. And the development platform itself was not as mature as I would have wanted it. Definitely not as I wanted it, as somebody who is trying to ship games day and date on the launch of the platform. There were just some things that we needed to go back and -- I'll just call them hygiene things. Some things that we could go improve on, and get to state of the art.

"My approach is to try and take a more open and inclusive approach to VR. The problem is the other people who are creating closed ecosystems are probably not going to like that. They're probably not going to want to play."

The other thing that you see, and you guys write well on this topic, you're seeing now, moreso than clearly any other console generation, but probably at a surprising clip, console games feel more like PC and almost mobile games, than they ever have. Not visually, in the case of mobile games, but in terms of games as a service. Which I know is kind of an over-used term. Today, if I look at the top ten games that people are playing on Xbox One (and I do that every day) a lot of those games are games that have been around for years. I can pick something, obviously I can pick something like Minecraft, but that's a little bit cliche at this point. But pick something like GTA V. GTA V is a game that's been out there forever, a massive success, and still incredibly powerful on our platform, in terms of what people are playing as they continue to play it.

So as we were looking at the development platform, we saw games that had a longevity in the market. Not just from people playing, but also frankly developers building new content and continuing to profit off of people playing those games. And we said okay, instead of I launch a game, somebody plays it for 30 days, and then that game kind of goes away out of the consciousness, other than just a memory, we're seeing these games actually continue to live. And people, developers and publishers, want to continue to service those games on our platform.

You know, Call of Duty is a great a example. Right now we've got a lot of people playing Infinite Warfare but we also have a lot of people playing Black Ops 3. And that's good for Activision. They can keep both of those ecosystems strong. And we want to help them do that.

So when we thought about our tools, I said okay, games are going to live longer than we're used to them living on our platform. Which means from the service capability and monetization standpoint, we've got to go build tools so that they can continue to give content and services and other things to the customers. Seeing games like Destiny get born this generation makes a ton of sense.

But also these games are going to probably start to span generations. You know if you think about like, Destiny 2 is coming this year -- I pick Destiny because I think I have 600 hours into the game. But you know, Destiny 2's gonna be one of these games that I expect five, six, seven years from now, people are still going to be playing that game. It's going to be a little bit like WoW. Which you know, whatever its been, 10 years later, 15 years later, millions of people play the game.

So from a development platform, we needed to think about our hardware as multi-generational. Because we said 'Okay, there's gonna be games that are going to live multiple generations. And our software platform really has to service a developer's need to service an ongoing set of users.' As much as it has to serve, you know, how do I get a disc done. And just kind of burned, and go on to go do my next thing. So these two things kind of working on conjunction, which is why you see us doing things like Beam. Because Beam's a great way, if you're a socially led game, to go and share your game to a ton of people who are maybe thinking about buying it, but haven't made a decision yet.

You see us doing things like Game Pass, and Game Pass is this idea of, even games that are more, I buy them, I play them, I finish, you still want to have a way for your customers to engage in those games. So we said okay, we look at obviously what Netflix has done in video, and say that's an interesting way of kind of keeping some of these games in the consciousness, when people do not necessarily go out and buy that full version of the game.

And as a development platform, making sure that the tools are there for developers to keep their game up to date. Make the money that they want to go make, and keep their customers happy.

How has your work as a game developer shaped your approach to leading Xbox? How did it inform your work on Scorpio?

This is about Scorpio, but, it'll ... I'll start with back compat. Because yeah back compat's a nice feature of the box, people can have this library of 360 games to play when they buy an Xbox One. It's a nice marketing feature for the platform.

But as a developer, as somebody who plays a ton of games and has been in this industry for a long time, I kind of have this belief that there are just games people should play. And I grew up as a PC gamer, and the thing I love about the PC ecosystem is I can still go boot up Age of Empires 2 and I can go play that game. It's funny, I was looking at the World Video Game Hall of Fame, there's like Solitaire and Donkey Kong....but...console has this construct that actually makes it hard to go back and play some of those old console games. Because the format is so tied to the hardware itself.

This is Tempest 2000, and it may or may not be running on an actual Atari Jaguar

And there's some clear benefits of doing that. I can tailor my games specifically to the hardware platform that I'm building towards. But it means you end up with this kind of land-locked content that it's hard to go play. Tempest 2000 on Atari Jaguar is a hard game to actually go off and play right now. Because the number of Atari Jaguars that still work, I don't know how many that number is, but once a transistor blows in one of those things, now what do you do?

So, starting with this idea that there are games that I just think are seminal games that people should be able to play, and not getting those locked to a specific generation of the hardware, is a goal of ours. It's a difficult goal, but it's a goal. Ad it's a goal that you see play out on PC, where I can go back and play Doom, I can go back and play Quake. I can go do those things.

So then when we started thinking about our hardware generations, and I talked about this a little bit at one of our showcase events last year, where I talked about hardware -- and I'm thinking as much as I'm saying -- I was thinking about console generations being able to take on some of the advantages that PCs have. Without becoming PCs themselves.

Because there are unique things about being a PC gamer that's different from being a console gamer. But I think there are some things that we can leverage and learn from that happen on PC, when thinking about console.

So one of the things we did in[Xbox One] S, which was actually kind of a pre-warm for Scorpio, is did something like added HDR support in the middle of the console generation. So as a developer now, I have to think about an install base of consoles that don't have HDR, and an install base of consoles that do have HDR. And how are you gonna treat that.

And then start talking to developers about like, what is scalable resolution, and why are you putting that into your game. Why might that be interesting in the future, if new CPU or GPU capability came online and you were able to use that. Those conversations have to start well in advance of us delivering something like Scorpio. Because you want games to take advantage of those things.

Like Halo 5 was a great example, right. It has dynamic scaling of resolution so in more complex scenes, those games, obviously you throttle down a bit on the resolution to keep framerate constant and you think well if you've got more CPU, what's going to happen in that situation. Well, the thing is gonna max itself out, right, and it's gonna run better.

These are the kinds of thoughts, when we think about dev platform hardware evolution, that were coming together, and this idea that I should be able to continue to play the games that were great. That gave us confidence that we could do something like Scorpio. Learning from some of our PC heritage as Microsoft, and also just watching a lot of the movement that was going on in the market. And the fact that games are living longer than they ever have before.

And as I said, you know with games as an art form, I do think people should go back and experience Age of Empires 2. People should go back and play Ico. People should go back and play Donkey Kong Country. People should go back and do those things, just like people go back and listen to old music or read old books.

I think of gaming in a similar fashion. And console generations make that difficult to do. There are advantages to the console generations, but I wanted to try to evolve our capability to kind of have the best of both. Old games that work well, new games that are innovative, and hardware platforms that could scale.

Will you require Xbox devs to support Scorpio? Will you expect them to patch in some level of support?

I want to make sure I understand the word support. The games will run on Scorpio. Any hardware peripheral you have, any game, any app; it is part of the Xbox One family.

Even -- and I tease the hardware team about this, because I'm running takehome now, so I have Scorpio at home --- even when you set it on top of your One, it directly portmaps. Like, you literally plug power in, plug HDMI in, it's all exactly the same.

We want to make it as turnkey as possible, for an Xbox One customer. That person has bet on us. They bet on us this generation, and I want to make sure that we're delivering a product for them, in Scorpio, that kind of meets the expectations and the investment that they've made in us.

So the Xbox One games are going to run on Scorpio. And when you ship an Xbox One game two years from now, even if you don't look at Scorpio as something that you want to take advantage of, fine. That's up to you. We're not mandating that people go and do Scorpio-specific work.

The big triple-A studios, that hasn't been the issue. Most of them, with their PC targets, already have...they've already built the assets. And we've thought about this. This comes from our PC heritage. That we should build the dev tools we deliver, through Direct X and now Pix, and working with our middleware providers, so if you've got a 4K version of your game on PC, we want to make moving that, those assets and that capability over to Scorpio seamless for you. That hasn't been a problem, when we're going and talking with the third-party developers that have done this work.

It's helped us that about a year ago, we started shipping games on PC. So, we did Forza at 4K on PC. We did Gears at 4K on PC. We did some other games, without announcing everything.

We've been in this motion of shipping games at a higher resolution than the current-gen consoles were capable of for a while, and we've used those learnings in our first-party, mixing with our platform and our hardware teams, to say okay, what is it going to mean if big third-party publisher X is already doing the same thing? How will they move over? And frankly, that's what we're finding. That when we go talk to them about it, it hasn't been 'how do we get you to support it?' It's been 'of course we're going to do this, because we want our game to show well.'

And there's even been this dynamic of -- you remember when Red Dead hit 360 back compat, it sold. It really started to sell well. Because a game like that -- well, Red Dead is definitely one of those games everybody should play. And when developers see that they say okay, there can be a new beat for my game, when it comes out and it's running at a native 4K on Scorpio, it's going to bring a new set of interest in my game, that people want to go see it.

And they're not often having to go rebuild the assets, because like I said in most cases they already have the assets. It's just setting the you know, the one guy for two days -- and to be clear, it's not 'one guy for two days' with every project -- that kind of scenario. And we're seeing the games get up and running well on the platform very quickly. And I think it's nice, because even if the game has been out for a while, a higher-res version of the game will cause people to take interest again. Those who maybe passed on it the first time, or were just too busy at the time.

Sounds like a PC game sales tail.

That's right.

What if a developer wants to take advantage of Scorpio hardware, at the expense of performance on original Xbox One?

We are set that Scorpio is part of the Xbox One family of devices. You're probably gonna get tired of our PR like, answers on that. But it's true. Like, we have millions of customers that have made a commitment to the Xbox One generation and I want to make sure if you bought the original Xbox One -- and frankly, developers want to support the largest install base of consoles that are out there, so from a financial standpoint they totally see it.

But I do get the question, more from game players than game developers, on why won't you just let developers target only Scorpio. And aren't you holding them back. Like, that's usually the social question I get: aren't you holding the developer back by requiring they support Xbox One when they support Scorpio?

The Project Scorpio dev kit, in front of earlier Xbox dev kits

Which is what we're going to require: you've got to support Xbox One, S, and Scorpio when you launch your game on Xbox One. But the truth is, the only developers that target one platform are first-party. Any other developer out there is building for the PS4, the PS4 Pro, the Xbox One, Scorpio, PC, probably Switch now, with the great start that they've had. And developers have learned how to craft their tools and their pipeline to support multiple capabilities as they go build those games.

Even if you just focused on PC, any PC game that you pick up has a recommended config, a minimum config...and like, the engines that are out there, the asset library handlers that are out there, understand how to have multiple LODs [levels of detail]. They understand how to deal with multiple asset bases and multiple rendering targets. So we're not holding anybody back.

But for developers, I want them to support the full Xbox One family. I think what they're going to see in Scorpio is the best version of the game that they've seen on console. And that's a little bit of ego speaking, but I'll say, as we designed the console we picked a certain GPU, we picked a certain CPU frequency we wanted to hit, an amount of RAM we wanted, an amount of memory bandwidth we wanted, and I kind of talked about it more as a balanced system.

It's easier to stand on stage with a 6 teraflop t-shirt, and people kind of focus on one thing, but the platform is obviously much more complex than a single number. I think it's fair to say we've been, um, surprised by the performance gains that Scorpio is giving us. Beyond our expectation when we designed the hardware. The engines that we've been bringing through and porting over, one, they've ported over fairly quickly, as third-parties have been coming in. And our own first-parties. The porting has been fast.

And this comes from, so many of these games have PC equivalents that if you say hey, can you set a 4K render target for your engine, you can often just say like sure, I just change this .ini setting right here. Boom! The engine knows how to go do this.

And then when we've looked at our first-party engines, as the third-party engines have been coming up, the balance of the system is playing out. The amount of RAM we're giving to developers, the bandwidth, memory bandwidth, so the GPU is always fed, you don't see stuttering that's happening on the GPU due to lack of assets hitting the GPU. Which is a big issue. You can push as many teraflops onto the GPU as you want, but if you can't feed it with assets, the thing's gonna stall. Because it's run out of stuff to actually go render. CPUs so that we can hit the framerates that people want to see.

And I think that when teams want to show the absolute best version of their game, assuming marketing deals and other things don't keep them from doing that, when they show a console version I think Scorpio is going to be the version that looks better than any other version.

When you say you expect devs to support Xbox One if they ship on Scorpio, what, specifically, do you mean by that?

The requirements themselves don't change, other than there's a new spec and we're saying hey, you've got to support the vertical nature of Xbox One, all the way through Scorpio. When we designed the Scorpio spec, we specifically said games running at 1080p 30 on an Xbox One -- what do we need to put in the box for that thing to run at 4K 30

And that was our design goal, from the beginning. To say: same framerate, increased resolution. Let's make sure that we can go hit that, as a minmum bar.

Now, software's complex and different things can happen, but one of the things that kept us from shipping in 2016 was we didn't think we could make that promise to developers in 2016. That the game that you're running at framerate and resolution on an Xbox One, that you'd be able to take to the same framerate and increased resolution on Scorpio. We didn't think we could get there last year, with the silicon that was in the market.

What changed?

It's a combination of price and capability from our hardware partner, that we worked with as we described a certain spec that we wanted to hit.

Sometimes I get in trouble when I talk about Sony too much, but, the choice they made on PS4 Pro, I totally get that choice, from their perspective and what they wanted to go do. I've said it publicly and I've said it privately, I think they've built a good 2016 PS4 Pro. With the silicon that was available, they picked the parts that made sense to go and put together a console in 2016.

But the point on not wanting framerate to drop when you go to the higher box, right, if the developers want to push resolution, to say to the player 'here you bought this higher-end console, let me show you higher-end resolution,' you don't want the framerate to drop. And that was something we didn't think we could deliver with the silicon that was available in 2016.

So some of it was time, as certain things come down in price -- some of them not as quickly as we would like. And some of it was hardware capability from our silicon partners, that allowed us to go do that in 2017.

And frankly we had to make that bet two, two and a half years ago, right. You're kind of throwing a dart a long way out, because the timelines in hardware are kind of like that. In the case of this, our hardware partner is the same [as Sony] -- we're both AMD partners. So we don't know what each other is doing, but we definitely know the roadmap, because we're working with the same partner. And we chose to pick something that said, if you're runnning -- 1080p 30 on an Xbox One, what does it mean to run that at 4K 30 on Scorpio. And make sure we could do that. And we're seeing results that make us feel really good about the choices we've made.

And some developers will come back and say, maybe I don't want a 4K native frame buffer. And we know some developers that are targeting other platforms are doing checkerboarding and other things. And we said okay, we want to make it easier for the developer to do what's natural for them. So we want to give them the tools to target their rendering techniques, that they want to use.

I believe, regardless of the technique you use, you are going to end up with a better performing game on [Scorpio], just because of the pure specs and hardware capability of the box. And we're starting to get questions like, if I plug my Scorpio into my 1K TV, because that's what I have right now, will I see something that's better than on the Xbox One? And we wanted to go tackle that scenario as well, so if developers wanted to make use of it, they could.

Giving developers tools to do the right thing at different resolutions is part of the dev plat[form] that we want to build.

Do you foresee a future where the Xbox doesn't exist, as a console? Where it instead exists as a PC-based platform?

So...I'm a strong believer in console. And what that appliance means in my family room, under my TV. Like I think...I log in with a controller, it kind of has power options and auto-update options that just feel a lot more like my cable box than it does my laptop.

I'm not saying one is better than the other, but that space of a console, you just turn it on and it's always ready and it's really purpose-built to go do one thing first, which is play games. Yes, people can do other things on it, but it's purpose-built for that. I'm a believer in that.

And I've said, and this is actually true, the planning for what happens after Scorpio in the console space is already underway. You have to think about it that way. Like, what is the next thing? We -- I -- remain committed to the console space. We think it's critically important.

But you're also hitting on something that I think is another change this generation. This will get a little philosophical, but -- gaming, over the decades I've been involved, has been about the device first. And then, almost, gamer second. Like I'm a console gamer, I'm a PC gamer. And still, like, I mainly play on console.

But what you're finding now, if you put the gamer at the center and you say okay, what do I want? I want to be connected to my gaming experience wherever I might go. And like, Twitch is a great example of that. Twitch lets me watch people play Destiny, wherever I go. And if a new raid drops and I happen to be on the road somewhere and I don't have my console with me and I want to see what a new raid looks like, I can get online and watch people go throgh it. That's cool. The experience becomes about me as a gamer, and where do I want to consume the content around the games that I love.

What we started looking at, then, is that we happen to be Microsoft, and we have this foothold on PC. Can we make Xbox an experience that expands, not only from console, but console to PC, and frankly mobile as well. We have millions of customers that come in from iOS and Android today. I think Xbox Live, as a service that connects a customer, a gamer, to their friends and their content and their Achievements and their feeds -- can exist on every platform.

Now some platforms might not allow that, like certain people might look at any encroachment of Xbox Live on their platform as a bad thing. But one of the things that happened when we acquired Minecraft, is we realized, very very quickly, the power of the community around driving the success of the game. Same thing happens with games like GTA V and Ark and Astroneer. You see these games that are almost more about the community than the original creators. When I go to MineCon, the line of kids is not for the team -- it's for the YouTubers! That's awesome.

So put the gamer in the middle, build a service capability around them, and whatever device they sit down with, we've got the capability, let's bring them the experience we can bring them there. If the games can run natively on a PC, and they're on a PC, let's go let 'em play those games.

Obviously on console, same thing. If they're on a mobile device, what can we do? In the case of like Minecraft and Solitaire and some other things, we can give 'em a game. In other cases we're going to bring 'em things like Beam, and their activity feed on Xbox Live, and the ability to chat with their friends on a service and device, wherever they are.

So I definitely think about Xbox Live as something that's more pervasive than just sitting on the console. The console itself, I think, is a foothold for us, a strength for us, and something we definitely have longterm belief in.

What's your general philosophy concerning the future of Xbox, then? Devs wonder about the future of game consoles. Is Scorpio an example of how Xbox evolves from here on out?

Well, let me say that the amount of times we've designed, roughly designed, an Xbox handheld, or a cheap Xbox kind of stick that you could plug in and stream from an Xbox in the home, or play low-powered games....we are always thinking and brainstorming on different scenarios of where the console could go. Or the gaming experience, I guess, more specifically, could go.

In terms of where console will go, I still believe in the power of a television in the home. Now some people don't, right. I happen to have two daughters, they're younger, they don't watch TV -- they watch things on their laptop, right. This big screen on the wall that's a communal viewing service is something of my age demographic, and not theirs.

That said, she'll come down and play games with me. So I believe in that television experience, which I really believe console is docked to, in my mind. Console let's four of us grab controllers and try to go play Overcooked and yell and swear at each other when Jason [glancing meaningfully across the table at Xbox ATG chief Jason Ronald] forgets to slice the tomatoes, or something. I think that experience is magical.

And I think it's something that -- I know it's something that we're committed to, in the long run.

In terms of where the console space goes, there's some things about how the console business runs, in terms of you don't make any money on the hardware, it's making money on the games, making money on the service. So if you're in a situation where you're subsidizing the hardware, a faster refresh of the hardware really hurts you. Because obviously, any subsidy of the hardware is kind of played out over, somebody is going to buy games, they're going to subscribe to Live, they might go subscribe to Game Pass and other things. And that's how you kind of run a business around the console space.

So I don't think you'll see console move. Unless the prices of the consoles themselves change to where they're not a subsidized piece of hardware but rather something that's profitable, like other consumer electronic devices, I don't think you're going to see a constant iteration in the console space.

Going back to Scorpio, we saw 4K. And we said we're going to go make a bet that 4K adoption is going to happen faster than maybe some people thought, or that it's going to happen in the middle of this generation. Let's go do something. So in the console space, in terms of where it's going, I look at those gaming consumer trends and say what are the trends we want to be a part of?

It's possible console generations slow down. Because I don't want to falsely put out a console that doesn't have a real selling proposition relative to the thing that's already in the market. I've said this before, that with the launch of this generation, I thought we struggled a little bit. Because a late-gen 360 game looked pretty good. So when an early-gen game from this generation came out, if you weren't in the industry, and you looked at late-gen 360 game to early-gen Xbox One game -- and I'd say the same thing for the other platforms -- you couldn't make the same statement you made on original Xbox to 360, where the screen went from 4:3 interlaced to all of a sudden you're sitting there at 720p HD. Like, it was just obvious. And TV was moving that direciton, you had sporting events and other things being broadcast in HD, and it was just like okay that's a no-brainer, I'm going to go do that.

This generation, I don't think, had that same call to action. Of here's what's happening around gaming, and you all have to be a part of that. We looked at 4K, we said we wanted this generation to incorporate 4K, and we thought we could do it in a way that wasn't disruptive, and was additive to this generation. And that's what we're trying to do.

"We needed to think about our hardware as multi-generational. Because we said 'Okay, there's gonna be games that are going to live multiple generations.'"

When you think about what's next, and what's going on, just like you guys write about it every day, we play games every day, and we watch what's happening in development and we think okay, well what are the trends? Trends are more socially-driven games. Trends are a more constant set of games that grow with, frankly, a very strong indie scene, such that the hit games don't come from the top three publishers. So we've reached down into the [email protected] program and done things like give them dev kits, let them turn their Xbox One into a dev kit so effectively anybody can become a developer. Now letting them submit their stuff directly to the store. This is all part of us saying how do we unlock the greater dev community so that they can actually create the next hits?

Because it's not as likely that you're just going to go bet on a hit that's going to come from one of your traditional names; it might come from somewhere else. And then well, what does the console have to be in order for that to make sense? From a platform standpoint, the platform's still got to be safe. As a parent, I want to know that my daughters can go on the platform and I know what they're able to play and I know who they're able to play with and the ratings of the content they have. We have to continue to do work on the service; we've built Clubs and we'll continue to work on our gaming for everyone accessibility features. And then the hardware capability itself, it's how do you hit a price point that somebody will like with a hardware capability that's easily understood?

The two easy ones to bet on are resolution and framerate. And I don't know if we're ready -- I saw Dell shipping their 8K monitor now, but it's like...five thousand dollars. I don't know if we're quite at a point where everybody is gonna refresh their televisions to 8K framerate. So you see us starting to look at the framerate area and saying okay what innovations can we bring, not only in maximizing the framerate, but even things that tailor the framerate of display to the capability of the engine. So that you get a very smooth feeling. So framerate is one of the things, as we go forward, that we're going to look at.

But I also think there's going to have to be some disruption. Nintendo, I thought, did a cool thing with picking mobile. They kind of said okay, Switch is going to be a console that you can take with you. That's an interesting idea. Nintendo always does cool things, right. They did the second screen with Wii U, they obviously did the Wii and motion gaming in the room. I love that innovation.

Having innovation that really brings third-parties along is critical to us, I think; Nintendo tends to have great success in their first-party on their platforms and then third-parties usually come in a little bit later, usually because Nintendo creates things that are less like other things. Which is, you know, kudos to them. I think it's a fantastic part of the industry. Us being Microsoft, we're going to think about the health of Windows. And of our Xbox console. And try to think about those together, and really continue to grow Xbox Live.

This is the year I think people are predicting that broadcast viewership of games will exceed playing hours of games? I don't know where people come up with those stats. And playing hours are going up. We know this. This industry's massive. It's over a hundred billion dollars, the game industry, globally. It's a massive business, and it's just finding more and more ways of reaching gamers every day, which is I think good for all of us.

I mean, there are many months on YouTube where Minecraft is the number one or two search term on all of YouTube. And obviously we have almost nothing to do with it, other than to continue to try and ship a game that works. Which is awesome.

I've been here a whole day and nobody has wanted to talk about VR. So what's up with VR, at Microsoft?

I've tried to be consistent on this, so I will stay in the swim lane I've been in, not because of any official answer, but because it's what I believe. I have a PSVR, I have an Oculus, I don't have a Gear VR, but I have an HTC Vive and I play a lot of this stuff. I still think we're very very early in the evolution of VR.

Really what I see today is a lot of what I call kind of planar 2D applications being ported to volumetric 3D, or volumetric VR. And I actually don't think that's where we're going to see the breakout hit, something that moved from yes I did this on my monitor and now I'm going to go do this in VR. There's a lot of cool things, there's a lot of learning going on, and I think that's the natural trajectory; I think we need to go learn.

But we don't yet know how to paint on the VR canvas. We're still learning that. And to me, the most innovative space to go, and the most open space to go and learn about what VR is, is Windows. Because anybody can go and take their Windows PC, and we're now coming with our Windows HMDs that are lower-priced and will support a broader spec of PCs, so that any developer if they really want to go learn about VR development, can go plug one of these things and go party on it. Because that's the kind of activation we need, to figure out what's really happening in VR.

And I think we're on like a decade-long journey with VR, and we're still right at the beginning. So I have hesitated to say let's lock on one piece of hardware on our console and say this is it, we've figured out what VR is, this is it. Because from a hardware standpoint I think you can kind of do that, though I stil think we're early, but from an experience standpoint I don't think we've seen the things that we need to really have VR break out.

So we will support VR on Scorpio. We said that onstage. We will support VR on Scorpio, we're going to do that, I think it's important, I think there's some great immersive VR experiences.

But I still feel like the motion of the creative community is more vibrant on PC. And that's the place where we're going to see a lot of those ideas. So our approach is going to be to try and embrace both of those thigns, as opposed to creating a vertical in the VR space to say okay this thing is completely disconnected from the other things. Because I think the Windows space is the place where most of the developer engagement is happening.

Yeah, VR devs are having to choose which platforms they want to be on.

I know! I don't like that.

Do you have any interest in doing your own VR work?

Well, we built Minecraft in VR to learn. It's on Oculus, it's on Gear, we kind of watch and we iterate and we kind of figure out what works and what makes people sick, what doesn't make people sick. Like a lot of creators, as an organization we mess around with VR all the time. And learn.

And the VR community itself is actually really open. The Sony guys have been great, they've had our teams down, we've had them up to look at HoloLens and stuff that's been going on. Obviously Valve's about a stone's throw from here. So the VR community itself is actually very collaborative because I think everybody realizes how early we are in the evolution of what this thing is about.

In terms of hardware, we will talk more about it. There is a plan. I'll say that. This is not a we don't know what we're doing; it's more that we aren't saying yet. I think it's an immersive experience. I do not like that people are having to say, which of these VR verticals do I go pick right now, as a developer? Because I don't think any of them are really big enough yet to support a single experience. So you can see what we've done on console where we've said hey, go unlock your console and become a developer and go build a console game. You don't need to sign any kind of exclusivity deal with us in order to go unlock our console and go party on it. And build games.

So we're going to...my approach is to try and take a more open and inclusive approach to VR. The problem is the other people who are creating closed ecosystems are probably not going to like that. They're probably not going to want to play.

But I'm going to try and be as open as we can, definitely across the platforms that we support. Because I think that right now if you're a developer, you're just looking for oxygen to go sell your game. And having to pick the winner in VR, this early, feels like a path to not having this space really take off, to me.

So we're also out there talking to people that are building VR games today who don't have some kind of exclusivity deal, and saying hey, I want to be able to support you with the Windows work that we're doing. So if you want to ship your stuff here, come over, it's not like if you ship your game somewhere else you can't ship here. We just want people to get users on the VR things that they've built right now. Windows is the easiest space for us to start, which is why you've heard, so far, our VR plan has been more Windows-focused.

So what advice would you give to game developers, in 2017?

We're trying to build the best hardware platform and service that we can.

I guess from my decade-plus in building first-party games, when you ask me to speak to developers, which I do a lot of, I kind of come to the soul of what it is to be a game developer. And I think today's world allows for an unprecedented level of connection between you and your creative capability, and the fans and customers of your game. Whether it's through Early Access or Game Preview, or different ways you can go build a game kind of hand-in-hand with the people who end up being the biggest fans and most devoted players of your games.

And I'd say to developers, go embrace that. Embrace the fact that there are so many people out there that love the craft of building games, as well as playing games. And build games where that community can be part of the experience.

A great little example is, you're seeing more and more developers now building games, understanding that things like Twitch and Beam exist. And the game itself kind of natively exists in this world of players and viewers. And I love that thing. It's what's unique about our art form, is that it's interactive. And I think the process of creating our art form can be as interactive as the end experience is when you're done. And that's something that's unique to being a game developer.

And us at Xbox, we're going to go build the best hardware we can, platform and service, to allow you to go do that. But embrace that interactivity with the community. Because I think it's....we see it in Minecraft: I say you don't own Minecraft; you're the curator of Minecraft. Because it kind of has its own life out there, and that's such a strength for it. So that would be my recommendation.

Continue to give us feedback on how we can do better. That's how we get better. I think it's gonna be a fun 2017.