Following the unveiling of Xbox One at Microsoft's base in Redmond earlier today, I sat down with Microsoft's corporate-vice-president-of-something-to-do-with-games Phil Harrison to talk Xbox One.

We started off by discussing second-hand games. This has probably been the most confusing issue online today, and after the interview but before we were able to publish the transcript below, Harrison's people invited me back so he could have another go at clarifying exactly how game ownership, second-hand sales and internet requirements worked. In the interests of clarity, I have replaced our original exchanges at the start of the interview with those updated, more accurate comments. However, if you wish to read what Harrison originally said, for the sake of transparency and completion we have preserved them in one of the updates to our original report. Got that? Good.

Without further faffing around, then, here is the full interview with Phil Harrison.

Eurogamer: The big thing that everything is concerned about is the Xbox One's attitude to second-hand gaming. I really want to try to get to the bottom of this issue before we talk about anything else.

Phil Harrison: So, think about how you use a disc that you own of an Xbox 360 game. If I buy the disc from a store, I use that disc in my machine, I can give that disc to my son and he can play it on his 360 in his room. We both can't play at the same time, but the disc is the key to playing. I can go round to your house and give you that disc and you can play on that game as well.

What we're doing with the digital permissions that we have for Xbox One is no different to that. If I am playing on that disc, which is installed to the hard drive on my Xbox One, everybody in my household who has permission to use my Xbox One can use that piece of content. [So] I can give that piece of content to my son and he can play it on the same system.

Phil Harrison.

I can come to your house and I can put the disc into your machine and I can sign in as me and we can play the game. The bits are on your hard drive. At the end of the play session, when I take my disc home - or even if I leave it with you - if you want to continue to play that game [on your profile] then you have to pay for it. The bits are already on your hard drive, so it's just a question of going to our store and buying the game, and then it's instantly available to play.

The bits that are on the disc, I can give to anybody else, but if we both want to play it at the same time, we both have to own it. That's no different to how discs operate today.

We will have a system where you can take that digital content and trade a previously played game at a retail store. We're not announcing the details of that today, but we will have announced in due course.

Our goal is to make it really customer-centric, really simple and really understandable and we will announce those details in due course.

[Editor's note: Read our separate report on these clarified comments to get the full context of Harrison's explanation. Harrison also explained the internet requirement when we spoke to him a second time. "Xbox One requires an internet connection, but it does not need to be connected all the time," he said. Anyway, from here on out, it's all the original transcript.]

Eurogamer: Why can't you talk about [how second-hand works] today?

Phil Harrison: Today is about introducing the platform and it's about introducing the big themes of what Xbox One is about as a new entertainment device that brings together games, TV and entertainment into one place. I think it's inappropriate for us to go into every avenue of tiny little detail today, but we will in due course, so...

Eurogamer: Okay. I mean, it's just funny having come from a panel where the amount of detail they were going into on the silicon and power-switching on that, to come in here and be told you can't talk about something that it sounds like you already know the answer to and would clear up a lot of people's suspicions and concerns.

"We will have a solution that we will talk about in very short order about how previously played games can be traded between players."

Phil Harrison: Well, let me say it again: we will have a solution that we will talk about in very short order about how previously played games can be traded between players.

Eurogamer: On Kinect, do developers have to include Kinect functionality in every game? Is it required?

Phil Harrison: We hope they do. The fact that it's in every single box, that it comes with the console, the fact that every single home will have the console and the Kinect, allows game developers and game designers to really maximise the creative and technical possibilities.

Eurogamer: But it's not like a thing where you mandate that they do it?

Phil Harrison: No, but as I say we hope that they do, and whether it's something as simple as a voice command or whether it's a more sophisticated gesture, is up to the designers to how they want to unlock that.

Eurogamer: Amongst our audience, there has been a lot of historical concern about Kinect. A lot of people felt that it was going to take IP they were used to - Fable: The Journey is an example - and take it away from the sort of experience they're used to having and want to have, and put it into this motion-control world they're not used to or not comfortable with and don't like as much, and weaken the games overall. They feel their fears have been realised - because the first version of Kinect was laggy and unreliable. I can't even use it in my house because my lounge is too small--

This content is hosted on an external platform, which will only display it if you accept targeting cookies. Please enable cookies to view. Manage cookie settings

Phil Harrison: So with Xbox One, what we did with the Xbox One Kinect sensor is totally redesign it, so it's wider field of view, it has new technology to detect motion in the room, it has a more sophisticated sound and voice recognition system, which dramatically improves the fidelity, precision and accuracy of Kinect compared to Kinect for 360.

So that does allow game designers to make games that really use fine movements, measured in millimetres and nanoseconds, whereas Kinect on 360 was bigger movements, with a wider and more exaggerated form.

Kinect for Xbox One is micro precision, and that allows that accuracy in what we call in one of our games, 'mastery', where you can actually be a true master of the game because of the quality of the detection.

Eurogamer: I think there's two warning lights going off in my head.

The first is that a lot of these claims sound very similar in terms of the rhetoric and the phrasing to what was originally said about Kinect, only for gamers to discover that it didn't really live up to the claims.

And the second thing is that Microsoft as a company has some serious issues with execution. The Xbox 360 launched with a terrible failure rate, Kinect wasn't reliable, Surface was very heavily criticised in the RT version in particular.

"You have to look at the quality of hardware innovation that Microsoft has put together. The team they have assembled is world-class."

Why should my readers trust that what you're saying about Kinect this time is going to hold true?

Phil Harrison: I think you have to look at the quality of hardware innovation that Microsoft has put together. The team they have assembled is world-class. They have designed a modern piece of hardware, which has the capabilities of the chips in the box, plus the power of Kinect, plus the power of the cloud, working in...

Eurogamer: Harmony?

Phil Harrison: Harmony, thank you. It's been a long day! Game designers don't have to use the motion-sensing capability of Kinect to add magic to a game. It could be just as simple as a voice command, or it could be just as simple as knowing there's more than one person in the room at the same time, and being able to automatically populate options and user interface - knowing there are two people playing or three people playing. Things that can be really subtle but really joyful to the player. It doesn't have to be jumping up off the couch and running around your living room - it can be quite subtle.

And, ultimately, some games and some players don't have to use Kinect at all. They could just use the voice to switch on - to be able to walk into the living room and say 'Xbox on' and have it turn on your entertainment system, your TV and your Xbox all by itself is pretty magical. And for it to recognise that it's you and to tailor your experience and your favourites and your recommendations around you and your personality is a pretty magical step forward.

Eurogamer: Yep, the stuff on the magic of algorithm and data collection and so on - how are you dealing with people's privacy concerns about that? I mean, presumably you're using anonymous data to improve Kinect over time?

"We aren't using Kinect to snoop on anybody at all."

Phil Harrison: Yep. Microsoft has very, very good policies around privacy. We're a leader in the world of privacy, I think you'll find. We take it very seriously. We aren't using Kinect to snoop on anybody at all. We listen for the word 'Xbox on' and then switch on the machine, but we don't transmit personal data in any way, shape or form that could be personally identifiable to you, unless you explicitly opt into that.

This content is hosted on an external platform, which will only display it if you accept targeting cookies. Please enable cookies to view. Manage cookie settings

Eurogamer: To stick with the point about execution, what have you done as a company to learn from the failure rate you had when you launched Xbox 360?

Phil Harrison: I think the company is very aware that it had challenges at the beginning of Xbox 360 and has learned from those challenges. Certainly those situations won't be repeated. The company had a root-and-branch redesign of its entire supply chain and manufacturing and hardware design, and I'm very impressed with the people that we have on the team - they are world-class inside the company, working with world-class suppliers outside the company - and I'm confident that that won't be repeated.

Eurogamer: Some of the reporting that's delved into how it happened has suggested it was last-minute revisions to the internals of the machine. Are you messing around with the internals of the machine still? Can you make people more confident about the reliability issue?

"I don't have any concerns about reliability whatsoever."

Phil Harrison: I don't have any concerns about reliability whatsoever, so I don't know why this is a concern other than--

Eurogamer: Well, historically it's a concern - that's why. But fair enough, you've been very direct about it.

On the fabric of the games themselves, why is 'slightly better graphics' going to make games more creative this time?

Phil Harrison: I think graphics are always important to help tell the story, to help create believable characters, to help put them in amazing situations - that's what gaming is all about, that fundamental wish-fulfilment, whether you're playing Lionel Messi, Jenson Button or a crack member of the Call of Duty or Halo squadron.

But what I think Xbox One does is take the power inside the living room and support it by the power connected by the cloud, so we can do computational CPU work in the cloud to enhance the experience. That's one thing.

Xbox Live has been a leader in online multiplayer gaming and social connectivity of gaming for many years, and that has been amped massively for the launch of Xbox One. I loved Marc Whitten's quote that day one of Xbox One we will be putting the equivalent computing power of every computer on the planet in 1999 just to support Xbox One. That's amazing - that's an incredible proof point of the kind of unique capabilities that Microsoft has, particularly in Azure and cloud computing, which we've been doing for many years.

I think that's a really incredible combination - game design and game developers have just got this untapped lightning bolt in their fingertips that they can express in their games.

This content is hosted on an external platform, which will only display it if you accept targeting cookies. Please enable cookies to view. Manage cookie settings

Eurogamer: See, this is what I want to hear more about. On the panel just now, they were talking about how it's a threefold improvement: the cloud computation potential, natural interfaces, and obviously having multiple devices. As someone who is inside the game development ecosystem at Microsoft, can you talk about any examples of how developers are taking that and behaving creatively with it?

Phil Harrison: So you will see at E3 some very high-powered examples of exactly that. Things that show both Kinect and Smartglass in a very supporting way to the main game experience, where the main game is played using a controller, you don't have to take your hands off the controller at any time, but you will see that Kinect and Smartglass add to the experience in a very clever way.

One of our main products that we're going to be introducing at E3 will show that off very well.

"Day one of Xbox One we will be putting the equivalent computing power of every computer on the planet in 1999."

Eurogamer: Can you talk about any gameplay hypotheticals at all?

Phil Harrison: I think what we started with Smartglass on Xbox 360... The architecture of Xbox 360 was never designed with Smartglass in mind. The architecture of Xbox One has been designed with Smartglass completely from the beginning, so it's totally integrated at a system level. It allows a much richer and deeper interchange of data between the console in the living room, the companion device you might have next to you on the couch or in your hand, and the cloud itself.

And that allows us to do some really clever things - contextual understanding of where you are in the game showing up on your smart device and showing you things that might be helpful to your game, or expanding or deepening the experience while you're playing the game, being able to use voice or gesture to get additional features unlocked...

And then one of the big things we didn't talk about much today - the game DVR capability, being able to capture your magical moments in the game, save them in the cloud and share them with your friends. That is going to be a big part of the Xbox One Live experience.

Eurogamer: Do you think that Xbox One will redeem Kinect in the eyes of core gamers?

Phil Harrison: Yeah, I do, absolutely. I think that if you are at the leading edge of technology in the home then you will want the power of Skype working with your TV and with your game experience seamlessly, and being able to switch smoothly between them - you saw in the presentation the speed at which we can move between applications is incredible, and that is this multi operating system running at once, which is kind of a core value and ability of Microsoft.

Just being able to have the game snap to the screen and have a Skype call on the side doesn't have to impact the game at all, but adds a degree of socialisation and social features to games that were never there before, so I think that's going to be very credible and I hope very compelling to your readers.

Eurogamer: Were those all live demos?

Phil Harrison: Yeah. Well, there was obviously some stuff that was video [trailers], but you saw the main walkthrough of the system.

Eurogamer: With PS4 Sony focused on having quite an open platform, with low barriers to PS Mobile, and they seemed much more engaged with independent developers. Do you think that's the case? And is this now the battle lines of this generation: Sony as grassroots, you as the big blockbuster thing? Or do you think the indie credentials of Xbox One have been undersold so far?

Phil Harrison: Well, I think today you saw very powerful partnership examples with Electronic Arts and Activision on stage with us, but I wouldn't read into that that we're only favouring triple-A blockbuster-type products.

This content is hosted on an external platform, which will only display it if you accept targeting cookies. Please enable cookies to view. Manage cookie settings

Eurogamer: I think if people were reading that in then they would probably look at the way that the Xbox Indie Games channel has diminished--

"We don't make a distinction between whether a game is a 50-hour RPG epic or whether it is a puzzle game or whether it is something that fits halfway between the two."

Phil Harrison: Right, so let me take that, because I think there's a very important point to make here. In the past we had retail games which came on disc, we had Xbox Live Arcade and we had Indie Games, and they had their own discrete channels or discrete silos. With Xbox One and the new marketplace, they're games. We don't make a distinction between whether a game is a 50-hour RPG epic or whether it is a puzzle game or whether it is something that fits halfway between the two--

Eurogamer: So no Xbox Live Arcade, no Xbox Live Indie Games - just games?

Phil Harrison: Just games, right. Search, recommendation, what your friends are playing, game DVR - these all go to helping you discover the games you want to play, so I think we solve fantastically some of the challenges that independent developers face, particularly around discovery and connecting their game to an audience, by some of the platform features we have in the machine itself.

Eurogamer: It does sound more elegant, but I think one of the functions of Xbox Live Arcade and the Indie Games channel was to give undue prominence to those things within the 360 ecosystem; for a game like Geometry Wars to be front and centre when actually, most of your install base would be more interested in Call of Duty day to day - isn't that something you're losing?

Phil Harrison: No, no, not at all. We don't give that up - we don't give up the ability to put a spotlight on the products that we think are going to be exciting to our user base, but in addition to that, what your friends are playing, what other people think is hot in your area, your country, your continent, will propagate up the most interesting and exciting games.

Eurogamer: Is it curated or a pure meritocracy or blended?

Phil Harrison: Both.

[Editor's note: When I spoke to Harrison a second time, he confirmed there would be no 'Arcade' or 'Indie' sections in the Xbox One dashboard - just a Games tab that has recommendations, trends and stuff like that, along with catalogue and search functions.]

Eurogamer: What is Steve Spielberg's level of involvement in that Halo TV series?

Phil Harrison: He is credited as executive producer and more details will come out in due course, but he is intimately involved in the process.

Eurogamer: The Call of Duty DLC exclusivity is obviously a big deal for you guys. Is it on the same terms as 360, so 30 days of exclusivity?

Phil Harrison: I don't think the details have been announced - I haven't seen that on the press release - but it's a meaningful and very significant partnership that we enjoy with Activision.

Eurogamer: Will you continue aggressively pursuing exclusives?

"We're investing over a billion dollars in new games for Xbox One."

Phil Harrison: I think it depends on the market, it depends on the game, it depends on the opportunity. But in addition to our relationships we've announced, within studios we have more exclusive games in development than at any time in our history. There are 15 products in development for launch within the first year of Xbox One, eight of which will be brand-new IP. We're investing over a billion dollars in new games for Xbox One.

We're going to invest that money in building games ourselves using our own studio capability, and we're investing heavily in that in the US and in Europe as well.

This content is hosted on an external platform, which will only display it if you accept targeting cookies. Please enable cookies to view. Manage cookie settings

Eurogamer: Is that the way you've come in and affected the equation, because obviously that was something you favoured when you were at Sony?

Phil Harrison: Well it's one of the many things that the company has asked me to do! So I'm doing my best to really invest in European game development talent, which I'm passionate about as you know, but also to make sure that the Xbox One entertainment and content and service offerings are great for people in the UK and Europe.

Eurogamer: You've got the ESPN and NFL partnerships over here [in the US], so you'll need similar things in other territories.

Phil Harrison: Totally, and I completely understand why looking at today's presentation you might feel it gave an unfair impression that it's very US-centric. We have to use examples from somewhere and anchor it--

Eurogamer: Oh sure, I think people understand that. They'll want to have local examples soon, so I guess the question is when people will be able to see those local examples?

Phil Harrison: So, between now and launch we have a number of very high-profile venues around the UK and in Europe where we can address that head on...

Eurogamer: You must feel things like Premier League football can be a killer application...

Phil Harrison: [Smiles] There are lots of ideas.

Eurogamer: I'm playing Chrono Trigger at the moment - a whole game that I have for my DS which I can play for years in the future. With computation being offloaded to the cloud, doesn't that erode the permanence of these new games?

Phil Harrison: Funnily enough, with the more computation that is done in the cloud, the easier it is to continue to support the product on multiple devices, on multiple screens, ad infinitum.

Eurogamer: Yes, but there aren't good examples of companies doing that. Even Games for Windows Live is now a bit creaky and awful to use. I was playing BioShock 2 the other day and that is not a fun process to do - you can't even save your game unless you go through all these hoops and download patches and it crashes all the time. That's a concern, surely?

Phil Harrison: I would point to other, more positive examples than that within the Microsoft ecosystem. Not perhaps an obvious one to your readers, but our investment in things like Office 365 - major corporations are empowering their users at the desktop with productivity tools like Powerpoint, Word etc entirely, 100 per cent from the cloud. So companies have made many hundreds of millions of dollars of investment in future infrastructure built on top of Microsoft platforms, so I am totally confident--

Eurogamer: That we'll be able to play Quantum Break still in 25 years?

Phil Harrison: I'm pretty confident that will be the case.