Elan Lee, who recently rejoined Microsoft to work on an undisclosed project for the Xbox One, is considered by many to be a pioneer behind Alternate Reality Games (ARGs).

His credits include The Beast for A.I.: Artificial Intelligence, widely regarded as the first high-profile ARG, and I Love Bees, a viral marketing campaign for Bungie's Halo 2. Now he's working at L.A.-based Xbox Entertainment Studios under Microsoft's digital entertainment boss Nancy Tellem. Here, Lee discusses the tough balancing act of transmedia storytelling, and how his new work is taking him beyond ARGs.

Gamasutra: First of all, Elan, congratulations on the new position. It must be very exciting for you.

Elan Lee: It is very exciting, thank you.

Tell us a bit about your new work, what you're able to say about it. Can we expect an 'I Love Bees v2.0'?

EL: [laughs] We've certainly come a long way from those original alternate reality games.

The new job is pretty exciting, in the sense that it is a continuation of the work that I've been doing over the last decade. My career has always been about creative storytelling -- what's the future of entertainment? How do we move beyond the confines of traditional gaming and traditional narrative? -- and this new job is probably the world's most exciting opportunity to do so when you think about the promise that the Xbox [family of consoles] holds. It's got more than 80 million people with these boxes in their homes and they look to it to provide storytelling, to provide entertainment every single day. So to be in a position where I am not only encouraged but given the resources to build the future of entertainment, that's just exactly where I want to be in the world.

Going off of what we saw at the Xbox One reveal in May and the further announcements at E3 in June, the technology is very promising. Microsoft's vision for entertainment is a very optimistic one. And you obviously see your line of work as fitting in with that.

EL: I was a lead game designer on the original Xbox. I've had one forever. When you start looking at what it can do today, and especially what the new hardware will be able to do, it's such an inlet for pretty incredible things. When you take those 80 million connected boxes and you add on top of that the fact that they've got controllers in their hands, and on top of that there's the Kinect camera looking at them -- and the next one will have facial recognition -- and on top of that voice recognition, and SmartGlass, friends lists, windows for social networking, you add all these things together you realize this platform has put itself into a position to completely redefine the nature of entertainment. All it needs now is for a very smart group of people to flip that switch.

In the history of storytelling there have been five or six big advancements that changed the way we tell stories and the way human beings communicate with each other. Things like the invention of Western theatre, the invention of the printing press, the invention of the motion picture camera. Every time one of these things is invented we, being humans, scramble about madly trying to figure out how best to use these to convey a complex idea, emotions, narratives.

We are, right now, right in the middle of another one of those huge events in the history of humanity's ability to tell stories -- and we don't even have a name for it. It's sort of the internet. It's sort of connected devices. It's sort of a lot of things. But we do understand that there's this new, always-on, always-connected method by which we interact with each other all day, every day. And to be in a place like Microsoft that has an advantage over the rest of the planet to use that power, those tools, to redefine what it means to tell stories, that's what gets me really excited. That's the work that I'm most excited about doing.

We've got this interest now in redefining what storytelling is and to convey these stories across hardware, across a network that's already established and has this audience. That puts Microsoft years ahead of anyone else out there. And the fact that they are this excited to use that advantage to tell really good stories and to hire a team that can tell those really good stories, that's just exactly where I want to be in the world.

Where to do you see Alternate Reality Games (ARGs) fitting in with other media such as music and television?

EL: ARGs are a tricky concept for me. As I was saying earlier, we've seen these huge steps forward with the evolution of storytelling. ARGs fall right into that evolutionary trail. From the time the first motion picture camera was built it took us 85 years to invent the sitcom. It takes a lot of wild experimentation and meandering about before we figure out how best to use a technology to tell stories. Same thing with the printing press. Same thing with the theatre. With the invention of the internet, I look at ARGs as one of those really exciting, interesting steps in the evolution of that storytelling but certainly not the finished form.

ARGs suffer, of course, from a very high barrier to entry. They ask only the most devoted audiences to leave their homes and answer a payphone in the middle of a hurricane, or go to a cemetery to participate in some crazy community event. And I've built some of the biggest and some of the most memorable of those, but it seems clear that ARGs were just a step along the path of defining what comes next.

I learned a ton by participating with those communities, playing with those communities, building incredible things with those communities. What I want to do now is harness that power. How do you build those giant communities? How do you get them excited? How do you get them motivated? And, now, how do you get them to an even larger audience? How do you make the barrier to entry even lower? I want to use everything I know and everything I've learned along the way to build something even bigger, something to reach a much larger audience.