In a darkened room in downtown San Francisco, a dozen or so journalists are hunkered down over Xbox One consoles playing the latest build of Halo 5: Guardians. Off to the side is Phil Spencer, the head of Xbox, dressed in what seems to be his go-to style: t-shirt and jeans. Spencer seems as affable in real life as he comes across in media interviews, happy to talk about all things gaming in an open manner. So while I was there to primarily speak to Spencer about the upcoming release of Halo 5, the conversation eventually, naturally, became more wide ranging, encompassing topics such as the future of VR/AR, whether an annual Halo release schedule is possible, and why he always seems to praise his competitors.

GameSpot: Okay, so we're here to talk about Halo. Actually, have you played much of it yet? Do you get to play many of your games in your role?

Phil Spencer: Yeah, in my office I have access to most of the builds of the games that we can play at different states. I do gate reviews with the big teams. That's where I was this week--I was up with Coalition looking at Gears of War 4. I don't always see the breadth of the game because usually what we're trying to do is look at a couple places, I'll give some feedback on things that I see, and the team just wants to get my reaction to things.

Being in your position, what type of feedback do you give?

You can ask the teams what they think of my feedback (laughs). The area where I find I probably add the most is horizontally, because I see what all the teams are doing, whereas the teams by necessity go pretty vertical pretty quickly on their things. Take Josh Holmes (Halo 5 studio head), who's here. I probably played quite a bit more of Forza and Tomb Raider than he has, because he's been finishing his game. Then when I'm sitting down and I'm playing Halo 5, I'll get a sense of not just, "Hey, here's what all the other teams are doing," because that's not beneficial, but at least what maybe the expectation and innovation bar is, and try to give them more context for the environment in which their game will ship, because I see so much of what happens on the first-party and the third-party side. I have to be careful, because my job isn't to spread what other teams are doing around. Teams want their secrets, but that's where I find that my feedback is usually most valuable, just because I'm playing so many different things that aren't done that I can help teams with context.

With Halo particularly, I don't think it can be understated what impact that franchise has had on the Xbox…

That's the reason Xbox is here. Absolutely.

Yeah, exactly. Do you think that the franchise still has that weight, that cache for the Xbox One? Do you think it will still have a huge material impact on the Xbox One's success?

I think it will. It's our biggest exclusive franchise. There's no doubt about that. The great thing about the video game business is you earn your customer with every release, and with the community and social, very quickly people will figure out if a game's worth playing or not. You have to earn it every time. There's nothing given. I feel very confident in the work that the team at 343 has done.

We're going to make a big moment out of this from the way we're going to market it. You remember Halo 2 and 3 and 4? These were big entertainment moments, so we're going to do the same thing here, because it is a franchise that I think can support that level of notoriety and exposure. I feel really confident in the game that the team's built. I think they did a really, really good job with Halo 5.

Do you think it's tougher now being a shooter than it has been before? Just looking at the competition that's going to be out there this holiday season; you're going to have Destiny, Star Wars Battlefront is coming out. Is the environment getting any better or worse to be a shooter nowadays?

In general, I think what we're finding in games that teams have to be aware of is so many of the games, their duration now is so much longer, because they have not just a healthy PVP part of the game, but they're also building other things, whether it's PVE or user-generated content and mods and other things. I've been around forever. I remember when you bought a game and you played it for a month. You finished the game, and you'd kind of put the cartridge up on the shelf, and it was your trophy that you had finished. Then you moved onto the next game. That created a lot of oxygen for many games to, obviously, come out and have success. I thought Nintendo, back in the day, was really great at pacing when their games came out. You had the opportunity to play them. Now you see games that do last for quite a long time. Then it's not only in the single-player campaign, as I said, but everything else that they bring to the table. That means your game has to mean something to rise above the din and actually retain the users.

That's one thing we learned from Halo 4. We had real good success with Halo 4, but we didn't retain as many of the customers, of the players as we wanted to. We wanted the players, the gamers, to stay with the game. The team's really taken a big focus on how we build out multiplayer engagements; it's why you see things like Warzone, Arena's obviously always going to be critical to what Halo's about, and even the co-op single-player campaigns allowing you and I to go play together and kind of play at multiple difficulty levels. Now that so many of them (shooters) are kind of service-based and not just shooters, I do think it raises the bar on what you do in terms of stickiness.

For something like Halo, you guys have years between major Halo releases. Would you ever consider tightening that up and getting more Halo out there? Have you ever thought of having Halo as an annual franchise?

I don't think about it that way. Funny enough, we probably have had a Halo release every year for the last few years, but that's been more just around the cadence of things, like Spartan Assault and Spartan Strike and obviously Master Chief Collection and the anniversary editions. But in terms of the core releases for us, Halo is somewhat unique to those games that we were talking about in that it has such a heavy character and story base to it. I think it's one of the real strengths of the franchise. People know the characters' names in the franchise. They know who Master Chief is. They know who Cortana is. It's not always true of other shooting franchises that you have that same connection to the characters in the story, and that there's a consistency and a connective tissue between the games.

For me, I like seeing the ability for us to get excited about a release. It kind of builds to a hype, and then it plays. I don't want to overplay or overuse the franchise. It's a franchise and an IP I expect to be around 20 years from now, much the same way Star Wars and Spider-Man and other things are. I think it has the weight that it can support that, but I think that the franchise then needs to be managed in a way that doesn't burn it out.

So you think there is a tipping point where there's going to be ... if you have too much Halo, it could impact the franchise, is that right?

Yeah, I think that's true of any entertainment IP, I think. With television series, if you look at it, they're on a weekly cadence, and they have to do that. Other than some anomalies like The Simpsons, things usually wear out. Not because the stories or characters are bad, but eventually people have kind of ... they've seen enough of it, and they're done with Happy Days, and they want to move on to the next thing. I think that's fine in that kind of space, but for what we're doing with our franchise and service ambitions with the Xbox and Xbox Live, having something that has the diversity of Halo and the characters and both the complexity but ease of game play is a unique asset for us. I want to make sure that we're cultivating it and growing it the right way.

Just going back to that longevity issue, I think you're on the record saying you're a Destiny fan. Is there anything that you're seeing in that model that you're looking at for Halo at all? Are there any sort of learnings that you can take from them?

I learn from a lot of games and studios. Obviously the team at Bungie's very good friends of mine. They're in my same hometown where I live, and I see a lot of them. One of the things I've always loved in games, and it's something I'll push our teams on a little more now, is co-op. I just love co-op as a game play mode, maybe because I'm kind of garbage at PVP. I think it's fun. You and I sitting on a couch next to each other, or you in your home, my at home, and other people playing together.

That's why I loved Gears of War back in the original, because it had that. Co-op was core to what it was. I love seeing in Halo 5 the co-op nature of the campaign. Even something like Warzone feels less about PVP, because the teams are so big and the spaces are so big, and there are PVE things that we can go do in the environment. To me, Destiny's done a great job. I hardly ever play the PVP in Destiny. I spend most of my time, as people can notice watching me play, in the PVE environments. I love that co-op nature. I'm now playing Lovers in a Dangerous Spacetime, a little ID@Xbox game that came out. I love that game. It's two people sitting together, one person controlling the ship, one person controlling the actions of the ship, and I just love that mechanic. I think gaming should be about having fun, and I think cooperative play is a great way of having fun when the game's done the right way. I love seeing what they're done in Halo, and I love, obviously, what they've done with Destiny in terms of really embracing that side of it.

Speaking of co-op, there is no local co-op for this Halo.

That's right.

Can you outline the reasons why you guys went that way?

In the end, the teams make decisions based on the bar that they want to hit for complexity of what they're going to run on a single box. We see the robustness of what Xbox Live is today and where people are playing across Xbox Live--you at your house, me at our house. We know that's the vast majority of the co-op play. With Halo 5, the team really wanted to focus on making that experience great, both visually on the screen that you're looking at, and all the systems in place. While I loved the split screen of Halo 1, obviously it was kind of how multiplayer in Halo was born, I think the team made a trade-off based on what they see happening in the market today and what they wanted to do with their game.

OK, it's interesting to hear you say that you have data that shows most of the co-op actually happens through Live. Is that right?

Well, we obviously don't know for machines that don't connect, but yeah. When you look at where most of the multiplayer happens in games, Live (is the place) just because it's so easy. I don't have to have somebody at my house. I love the nostalgia of the couch co-op of what Halo did in the past, but I also know in the realities of the day with people's busy lives, it's not as easy to get everybody in the same physical place. It's one of the advantages that Xbox Live obviously offers.

Now you've been very vocal about trying to embrace PC gaming again, particularly with Windows 10 out. Is there an update you can give on Halo 5 possibly for PC down the track, or even something like Master Chief Collection? What's the latest on that?

The thing I want to make sure that I do is that I talk about what I know is happening. I try not to get into the world of when I don't know when things are happening. Halo 5 is shipping on Xbox One. That's, honestly, 100% of our focus. We want to make it a great Xbox experience. People will end up through streaming and other things maybe playing on their PC, but that's not Windows gaming. That's just an extension of what people do with Xbox. Us though, when we look at Windows and making sure that our first-party franchises show up and start to create a joint environment for Xbox Live customers across Xbox and Windows is important to us. That's why as teams, when they're starting projects and you look out and both of those play environments, both PC and console make sense, I plan that we're going to embrace that. I want to make that part of what we're doing.

In the past, we've kind of looked at keeping games off of Windows as maybe a way of getting people to buy an Xbox. People are going to buy and Xbox for the complete value proposition of playing games on my television with the controller, looking at the screen, the sound and everything that happens around that. I want to make that experience great. We're 100% focused on that with the team, and when we have experiences that can work well on Windows, I want to do that. I want to allow people to play there as well. Like I said, early on, we're doing most of the work through streaming, which I won't say is Windows gaming, but it does at least allow somebody to play their Xbox games there. You'll hear more and more of us announcing games where we look at the environment in Windows, and we look at the environment on console, and we think the game will play well in both places.

Speaking of Master Chief Collection, obviously the launch last year was kind of rough. Are you confident that all of those sort of issues are ironed out, that Halo 5 will have a hassle-free launch?

I know that of all of our teams, no team at their core feels the need to hit a great launch from a multiplayer and connection issues more than 343. That team took the issues around the launch of Master Chief Collection, it kind of hit them in the heart, because it's Halo Nation. It's the people who love these past Halo games. I just know every time I've been down to 343, it's the first thing that they want to talk about is how they're doing with multiplayer and the robustness that we mentioned. No team is focused on it more than 343. The planning and process teams have gone through has been great, and I'm confident in how it will launch based on the results that we're seeing.

Frankly, if I look at how Rare came out and Gears came out, and now Forza, I feel good that the teams all up have taken the lessons of last holiday of some teams missing the bar that they wanted to hit. You're always going to have issues here and there, and you kind of manage through it, but by-and-large, those releases have gone well. It's really nice to see that the teams have taken an increased focus on making sure that launch goes extremely well for our customers.

The "Halo Lens" demo at E3 was amazing. What are your plans for actually incorporating HoloLens in Halo at all in the future? Or was it purely just a demo to show potential?

All of it is a demo, but I'll say as creators, as we have a ton of people in the studio's organization, and when something like HoloLens comes around, I want to make sure it gets in the hands of our most creative people and see what they come up with. We don't have anything to announce or, frankly, any plan for any game across anything, even the Minecraft stuff that we showed, which almost looked like a fully baked game, is really just the team getting their hands on the devices and thinking through what might be possible. We're still really in that ideation phase of what might happen, what could be possible. The device isn't isn't launched. I imagine the early units will go to developers who are going to go build things. I think it's going to be a while before we see this as a mass consumer market device, but I love the ideas that the teams are coming up with. I think it's too trivial to say it was just demo ware, but in no way do I want to say, "Hey everybody. There's a Halo game coming for HoloLens", because it's not there. I think the ideas on where that will go will be really crazy cool to watch over the next few years.

I don't think I've ever read your opinions on the future of VR and AR. Is that the future, do you think? Are games heading inevitably down that path where that technology is an essential part of what we do with gaming?

Well, now it's just my opinion. I'll say, obviously we have relationships with Valve, we have a relationship with Oculus around the VR work that they're doing, but I'm going to say I kind of hope not. It doesn't mean I don't think VR has great experiences to offer. I think it does, and we'll find those, and people will love playing those. I love playing games in my family room with my kids. I love people coming together and watching what's happening on screen and laughing, and the kind of fun of what video games were always about. That doesn't mean that can't happen in a kind of socially connected VR environment, but to me it would be too bad if all gaming became people with head mounted displays on, headphones on, kind of blocked out from everything that happens. I do think there'll be great experiences there, but just kind of for the sake of what gaming is, I don't think that should be the only way people play.

I think there will be certain experiences where that's perfect. I don't know necessarily if it will be genre based, but I just love me watching you play Mario and giving you ideas about where things might be, and we laugh, and we can kind of sit around and eat chips, and do things that people do. I think that's kind of the basis of what gaming is about. I think there's a place for VR. I think it's really cool to see the innovation, like many innovations in the past. Gaming is taking a role in the forefront, because VR will touch more things than just gaming. Holograms and AR I think is a more complex space, but again, you're going to find games will be there really stretching the technology like they have in so many other areas.

Are there any updates on any of the sort of Halo trans-media stuff, like the Steven Spielberg TV show? Is there anything more you can say on that?

Not right now. I will say I'm incredibly proud of the work that both the team does and creators do around the books that come out, the videos that come out, TV work that goes on. As I said earlier, I think Halo's one of those franchises or worlds that can support highlights and showcases in many different media. I think that's great. It brings more people into the Halo universe. People who maybe don't want to play a video game can get to experience it. It's definitely something that's part of our future with the franchise, in terms of continuing to grow it, but we don't have any updates right now.

Do you want to see that Halo movie finally get off the ground?

I want to see great Halo things, so I kind of start with what's right for the franchise, and what would the customers love to see. I don't have a need to go get a movie done on a certain date. I think if we ever took Halo and kind of pushed it in that direction, I think we're on the wrong end of creativity and innovation. I'd love us to try to do something special with a partner that's working that kind of shares our values there, but if it's meant to be, it will happen. If it doesn't, I'm not going to lose any sleep over it, because at the core, Halo's a game franchise and something that's incredibly important to Xbox.

Your time at the head of Xbox, I think, has been characterized by your focus on gaming. You really wanted to pull all that focus back to what the console is all about, which is games. Do you think that you've successfully put that message out now? Are you comfortable with where the console is now, in terms of just the wider perception of gamers out there?

Am I comfortable with where we are? No. The teams hear that from me all the time, because there's so much more I think we can do, and the team's so incredibly capable that it's ... There's so much energy when we sit down. There's a high degree of energy and focus on where we're going to go and where we can go. The perception and reaction of the community, the Xbox fans stood with us through a time where I think they questioned maybe what this brand and leadership team was about. They've supported me. They've given me feedback through my transition into a new role, and I'm incredibly grateful for that. Whether it's on Twitter, it's on Xbox Live, it's in my inbox, the conversations I have with people and their feedback, I think we've got a lot more work to do. The great thing about gamers is they'll give you their feedback.

I love that, and I think I do sense that people have renewed their faith in the brand, which is great to see, but they want us to do more. In the feedback site and other places where we solicit direct feedback on things that we should go do are always lit up. I think that's fantastic.

But what keeps you up at night now, though? What's the next thing that you really want to tackle?

I've said before, the one thing that I probably find a little distasteful in the discourse around games is the divisiveness that people try to build between platforms. It becomes more about what piece of plastic I own than what games I'm playing. It becomes more about somebody else failing than the things I love succeeding. I don't think that's a good place for our industry. I know that's not everybody, and it's easy to find the pockets of that vitriol and kind of think that that is gaming, but I'm not going to embrace that. I'm going to actively push against that. People sometimes will make fun of me that I mentioned Sony or I mentioned Nintendo. It's not to placate anybody or make them think I'm some kind of good guy. My job isn't really to keep you from buying something else. My job is to make you proud of what we offer, and to give you an enjoyable experience with the product we have. That's 100% of what I'm focused on.

The things that are keeping me up at night are really all about that, and it's the great thing about this industry, as I've said many times, is you do earn every customer. There's nothing that I own that makes you have to go buy Halo. You're going to buy Halo 5 because you love it, or you're not because you don't. That's just a fantastic part of the industry that we're in, and I fully embrace that. I'm trying to keep our organization and, hopefully, our fans, out of that type of stuff, because I think that's just incredibly unhealthy for our industry.

Well, since you brought it up, you are getting this reputation for being the nice guy of the industry. Don't you have anything negative or even passive-aggressive to say about your competitors?

I don't know if it's ... nice. One, I know most of these people, and I know they work incredibly hard. I know the studios, I know the people that run those organizations, and I don't want ... It's not my job to think about how other people can fail. The thing I'll say about us and Team Xbox and what we're trying to do is we work for a company in Microsoft that isn't driven in this space to go dominate anybody or to put somebody else out. The reason Satya's (Satya Nadella, Microsoft CEO) interested in gaming, the reason the Windows 10 focused on the consumer and gaming is so prevalent inside the company right now, is we see opportunity. We see opportunity to delight customers, to give them more reasons to engage with the platform that we have, and it's really all about the unrealized opportunity that's in front of us. Then when people bring up, "Well, what about Nintendo? What about Sony? Isn't it too bad that Sony is selling a lot of PlayStation 4s right now?" I honestly don't feel that it's too bad.

I love that we're selling a lot of Xbox Ones. I love that we're selling more Xbox Ones than we did 360, and we're growing year ... all the PR stats I can hit you with, and I love that we have more people on Xbox Live than we've ever had. That's probably the thing I'm most focused on is the people that we have on Xbox Live and how happy they are with what they're doing. I don't know if that makes me nice. I don't see any reason to go after and be pithy towards somebody who's just trying to do a good job with the product that they're building.

Phil, thanks for your time.

Thank you.