Sony officially announced its Project Morpheus virtual reality headset last night, and plenty of other companies have been following Oculus' lead into the VR and/or augmented reality spaces at GDC. In that light, many observers are now eagerly watching for any hints of similar plans from Microsoft beyond the already rumored head-mounted display. The company doesn't seem too worried about falling behind by the new VR gold rush, though, with Xbox Group Program Manager David Dennis telling Ars that "we'll see how the VR space evolves."

When asked about Sony's recent Morpheus announcement, Dennis said he "love[s] seeing innovation in the category, [and] it will be great to see how consumers and developers respond and what they're able to build for it." But when asked if Microsoft was missing its opportunity to catch that wave of innovation, Dennis' response indicated that he thinks it's still a bit early to assume that VR will be any bigger than the 3D TV "revolution" was a few years ago.

"At this point, everything you're seeing out there is just prototypes and development stuff," Dennis noted regarding projects like Rift and Morpheus. "I think for us, it will be interesting to see how consumers respond and what experiences developers are able to deliver."

What about the rumors that Microsoft is working on AR glasses of its own, driven in part by a patent application for augmented reality glasses that surfaced last year? Dennis urged us not to read too much in to those reports.

"There's always lots of rumors about lots of things," he told Ars. "We patent lots of things. As you know, Microsoft Research does a lot of stuff. You patent stuff to protect the IP in the event you ever want to work on stuff in the future, but it shouldn't be [a] telltale [sign] that anything specific is in development."

Sales reporting and Kinect bundling

When the Xbox One was first released, Microsoft was quick to offer public updates on how the system was selling worldwide. Those self-reported sales numbers have dried up in 2014 after the company revealed worldwide shipments of 3.9 million systems through the end of 2013. Sony, meanwhile, has continued to offer a slow drip of worldwide sales information throughout the new year, surpassing six million units sold at the beginning of March. This state of affairs has left the new console sales horse race a little one-sided from the public's point of view, though NPD has filled the gap somewhat with monthly reports on the US market.

Going forward, Dennis said Microsoft is going to stick to reporting Xbox One shipment numbers quarterly when it releases its overall earnings reports. That doesn't mean the company is hiding its performance or ashamed of how the Xbox One is performing in the market, though. "We feel great about the sales right now," he said. "Titanfall obviously was a big seller for the platform. Ahead of that, we saw record-breaking sales compared to the Xbox 360 last generation. At the same point in the generation, we have orders of magnitude more console sales than the 360, so we feel great about the state of the business."

Why is Sony being more forthcoming with frequent sales reports? "If that's what they want to do, that's what they're welcome to do," Dennis said. "I think that they made a forecast that they'd get to five [million] by the end of the fiscal [year], and I think they had to circle back around and check the box and say 'we got where we wanted to go.'"

More than discrete sales numbers, Dennis said Microsoft was very happy with the engagement numbers it's seeing with online activity on Xbox Live. The software lineup the system is delivering in his eyes. "I think we've got the best pipeline of games out there. I think our launch portfolio was stronger than Sony's and I think the portfolio we're working with now is stronger, and I think that's what's driving the engagement online and all the activity you're seeing."

Sales performance notwithstanding, calls to release a lower-cost version of the Xbox One without an included Kinect sensor have remained relatively persistent in many corners of the Internet. Microsoft has said many times that it has no plans to sell the Kinect separately from the core hardware that powers it, and Dennis said that's for a good reason.

"[Kinect] is really something that we feel, once you take out, lots of people will go, 'Gosh, I really liked that, I got used to it, and I'm going to miss it,'" he said." I think the more consumers get exposed to it, the more they use it, they'll realize what a great, amazing experience it is."