Microsoft’s Phil Spencer tells why Xbox One games will make us salivate (interview)

If you don’t like the games for Xbox One, blame Phil Spencer. As head of Microsoft Game Studios, his job is to create a line-up of titles that make Microsoft’s new game console a must-have during the holidays, even in the face of competition from the PlayStation 4.

Spencer has had about three years to put together a line-up of the games that Microsoft is internally producing at its own game studios for the Xbox One. Now we’re about to see the fruits of that strategy. We caught up with him at a recent Xbox One preview event to play the games and ask him about his plans.

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Here’s an edited transcript of our interview.

GamesBeat: So how do you feel about the launch titles?

Phil Spencer: At least from a first-party standpoint, all of our games are in certification. We’re well along the way to finishing. It’s been a long journey. I feel good about the games. The thing I’m most proud of, other than just the effort the teams are putting in, is the breadth of content. From your core-est of core franchises like Ryse: Son of Rome to a game like Zoo Tycoon, some retro things like Killer Instinct, Forza, the breadth of content is going to be good for consumers.

GamesBeat: Do you feel like you hit your plan, or do you wish you had more of something out on the floor?

Spencer: From a numbers standpoint, it’s a lot of content that’ll be available day one. I haven’t gone back and added up the number of franchises that shipped on every other console, but it feels like there’s a lot of content available day one.

Day one is a unique point in time for franchises. Some might say it’s the smallest installed base, but some of our biggest franchises in the industry were created with day one launches, because there’s so much excitement. There’s a bit of hit-and-miss around being a launch title. If you can create a Halo — if you’re so definitive of what the platform means — that’s the opportunity.

GamesBeat: The strategy of launching a new IP with a new console still makes sense, then?

Spencer: It seems like it. I’ll focus on something like Ryse. For me, it’s one of the most visually stunning things I’ve seen on screen. That’s a real opportunity. People go buy their new hardware. They’re going to want to have experiences that show off the capability of their investment. Rewinding 20 years, I go buy a new graphics card for my PC, and I go buy Flight Simulator so I can show people the number of polys there that I can pump out. Maybe four? [laughs]

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Now, Gears wasn’t a launch game on 360, but when you went from standard def on the original Xbox to high def on the 360, people wanted the high def experiences that were going to be there. The Kinect launch was the same way. The announce we did very recently around Kinect Sports Preseason, having a couple of the Kinect Sports available there day one, is really important. The Kinect value proposition is something we believe in.

GamesBeat: It looks like you have a lot more downloadable titles available this time.

Spencer: Yeah. We learned that through 360. At the launch of the 360 there was very little. The name “Xbox Live Arcade” hearkened back to playing old Centipede and Pac-Man games. With 360 we saw the emergence of this new channel for original things – maybe not the size of a Halo or a Call of Duty, a little smaller, but reaching a broad audience that way. State of Decay was an example of a release that did well for us.

So it wasn’t hard, at the launch of Xbox One, to find some unique, smaller games, but no less ambitious in terms of the creative impact they wanted to have, and make them available day one. If you do a good job, people will come in and buy them. There’s a viable business there for creators. That made it easy to get people to sign up.

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GamesBeat: I wonder what some of your high-level thinking was at the beginning, a few years ago, when you were considering launch titles. I’ve had a chance, in the past, to talk to people like Ed Fries about what they thought about launching the new titles and brands on the 360 at the beginning. He resisted the box for a while because he felt like there wasn’t a new feature that was going to grab everyone. It had better graphics, but what was it doing that was brand new for people? He wanted something more like Kinect in the box at the start. So he had some interesting challenges as he was thinking about a new generation. I’m wondering what yours were.

Spencer: Ed hired me into the studio, so Ed and I have a lot of history in this space. I learned a lot from him, but I don’t know that I think about it exactly the same way. I don’t think about launch any differently than I do about our role as first party at any point in the generation. I want to be able to talk about any one of my games and explain why that’s a first party game. Why is this a game that — as a studio, either with our internal resources or externally with a development relationship — is being built as a first party?

As a business mechanic, first party is obviously not targeting the whole installed base. There are financial challenges from a pure title P&L, if you think about it. So we better have a real reason that we’re investing in something. Why is this a first party game? What I hear when you talk about Ed at the launch of Xbox 360, you really want to be able to look at every one of the games and understand why this is something that first party should be investing in. Third parties are going to invest in a lot of franchises and a lot of genres. I don’t need to tick all the boxes on a genre basis, or even from an age rating standpoint, because that stuff will be there.

So why is this a first party game? It’s one of the first questions I ask when people come in with a new concept. What makes this a first party experience? What can we invest in that a third party might not invest in?

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GamesBeat: Is that similar to thinking about something like: What’s our killer app going to be?

Spencer: Not always. The killer apps are more of the mythical beast that’s hard to catch. Look at retail Minecraft right now. It continues to blow the doors off after we sold so many millions of units digitally, on top of Mojang selling so many millions of units on PC. You can say that in a lot of ways Minecraft is a killer app, even though it came to us later than it did on PC. I don’t know what it is from our standpoint that would make that a first party app, but clearly it’s resonating with people.

Project Spark is a pretty good example. If we’re going to go off and build something around creativity, we want to make sure that we give people the ability to create on multiple devices and share with people on other devices. We want to be able to use things like Kinect to mocap. We want to be able to use different parts of the ecosystem to create something new. Project Spark is a big investment on our part. I don’t know if it’s an investment that any third party would naturally jump in and do. But for us, as a first party with a connected ecosystem across a lot of devices, it feels like a good investment. Or Zoo Tycoon, where we’re going to store zoos in the cloud and let people work collaboratively with the store. We could have just gone back to the old Zoo Tycoon and ported that, but we decided to invest in something that makes this special and unique to what we’re trying to do as a first party.

GamesBeat: With Spark, they talked to me about how Kinect is the hook for the Xbox experience. It’s something that the other platforms don’t offer. How far do you guys want to push Kinect at this point? With 360, it was something that came down the road. How much more important is the Kinect investment this time around?

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Spencer: There are a few things I would say are unique differentiators for the Xbox brand. One of those is Xbox Live. When people think about Xbox, they think about Live. We’re investing in that ecosystem. Halo is probably the most definitive piece of IP behind the Xbox brand. But Kinect is clearly something that’s unique to us. Making sure that Kinect shows up as something that’s consumer-ready, that’s applicable across many things that people want to do, whether it’s watching TV, Skyping with their friends, playing games, or something completely different — maybe something uncategorizable like Spark — and making sure that it shows up as something important.

The nice thing about putting Kinect in from day one is that, even for something that’s a controller-based game, they know that everybody with an Xbox One has Kinect. It’s easy for them to think about things like voice. A majority of the games you see up there will use voice in some way because it’s easier to do certain things. Then you take something like Battlefield, where they have their lean controls. Lean was pretty easy for them, because we built Kinect into the OS. They don’t have to give up cycles to support that. They can incorporate lean as a sort of third thumb stick. A person can use their body that normally you’d have to modify one of the thumb sticks on the controller to do.

Making sure that Kinect shows up across core games, television, entertainment, communication, web browsing, all the things people do across all their devices is critical. It’s just like Live, or even Halo, as we take something like Halo that’s definitive to us and start bringing it to more platforms. There are some things that uniquely define what our brand is about.

GamesBeat: It looks like you’re able to build Kinect into the fabric of things, but it seems like you’re still looking for a blockbuster hit there.

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Spencer: Maybe? I think about how many people use Kinect in the day-to-day operation of the Xbox One. It might not turn out that there’s a Minecraft moment for Kinect, where one thing causes everyone to say, “Oh, that’s it.” It might just become something like DVR. It’s not as if there was one TV show that took unique advantage of DVR and we all said, “Now I need it!” It was just that this was a better way to store all your TV than all these tapes.

Now, when my wife sits down and says, “Xbox, watch NBC,” and it turns right to NBC on the television, that’s pretty unique. She doesn’t have to remember that NBC high def is channel 105. All that stuff just happens. She’s able to seamlessly control what she sees on her television by using her voice. She doesn’t want to know how it happened. It just works. That could end up being the killer app for Kinect, something that’s as pervasive and expected as that.

GamesBeat: Do you think Kinect is easy enough to develop for now?

Spencer: It is now. We learned a lot with Xbox 360. As you mentioned, it came in halfway through the system’s life cycle. There were a lot of things about the ecosystem that didn’t work well with Kinect. Voice wasn’t always there. It was only available in a game. The dash itself didn’t know at first. You’d fall into experiences where gestures worked and then go to other experiences where it didn’t work. It was very hit or miss.

For a general consumer, things have to always work or they fall out of existence. It’s the same thing with voice. If you have to say “Xbox, watch NBC” five times to get it to work, you’ll just give it up. We’ve done the testing. As soon as the hit rate drops below about 90 percent on these things, voice command in cars or with phones, people just give up.

We’ve learned a lot and invested a lot in Xbox One. One, it’s about making it pervasive, so it’s always there across any experience. Two, the technology is fully available.

GamesBeat: How is cloud processing turning out as far as its usefulness for developers?

Spencer: You can see experiences here – I can talk about Drivatars, I can talk about Zoo, I can talk about the things we’re doing with Spark – but the real advantages are going to come when you start to see people offloading CPU into the cloud in a real way that impacts the core game loop. There’s some skepticism over whether that will work or not, and I don’t fight the skepticism, because I’d rather have something to show people and a game to build, which is what we’re focused on now.

The other area where there’s a lot of interest is from indie developers. In your garage you have an idea for a service-based game, but maybe you don’t have the financial investment available to go and build a server farm. Now, through our Azure farm, I can apportion to you the load that you need in order to support the number of users playing your game. As that load goes up, on the back end we’ll deal with that. On the other side, when people stop playing, we’ll decommission those and apportion that CPU capability to whatever’s the hit game at the time. We don’t end up with this depreciation problem, a lot of old hardware that we don’t have anything to do with.

In the indie space, the cloud is going to unlock a lot more potential for people to think out of the box as far as what indie games have traditionally been. I love my single-player indies. Brothers is probably my game of the year right now. But I also want to unlock the potential for developers on that scale to build a service. There’s a lot of possibility there.

GamesBeat: When people found out the specs on the boxes, they worried that Sony’s games would look better. What do you think the outcome has actually been?

Spencer: For us, in first party, it’s about building the best-looking things we can find on the console, the best experiences. I’m pretty blown away by the work that Crytek’s done with Ryse. It seems to hold up to anything I’ve seen on any console right now. Forza at 1080p and 60 frames per second is going to be the definitive racing sim for this next generation.

We want to put the tools in the hands of developers to build the best experiences. Gamers will look at different videos, and beauty is in the eye of the beholder, so what people like or don’t like will be up to personal perception. But I know that, with the power that’s in the box, we’re able to make the most amazing-looking Studios games we’ve ever put on-screen.

That’s why I like bringing people into a venue like this. Go look at Ryse, at Battlefield, at Call of Duty, at Forza, and tell us what you think. Does it look great? Does it feel great? In the end, people play the games. They don’t play the numbers. Most consumers haven’t had their hands on an Xbox One or a PS4 to feel it. They’re going to use whatever specs they can get hold of to compare the systems. But in the end what’s going to compare the systems is what the games look like on-screen. People will see what we’re able to do with the box.

GamesBeat: Do you think graphics are still going to be a determinant as far as whether one system sells or the other? Or are we close enough to a place where all graphics are good enough?

Spencer: What I see now is that graphics are being used by the factions that are in place — I love this console, I love that console — to lob hate at each other. Which I think is counterproductive. Sony does a great job. They have a very strong first party. They’re going to build a great piece of hardware. They’ve built a long-standing brand in PlayStation. They deserve the place they occupy in our industry.

Early on, the numbers are just being used as fodder back and forth. I don’t think graphics will be the definitive reason that someone picks a platform over another. It’s more about franchises. If you’re a huge Gran Turismo fan, I don’t think we’re bringing Gran Turismo to Xbox any time soon. If you’re a huge Halo fan, Halo’s not going to Sony or Nintendo.

But also, you and I have been through this enough times to say that the battle’s really not this holiday. This holiday you’re going to see the fans on both sides lining up to pre-order. I think about the next holiday and the holiday after that. It’s when the hardware is in full assortment in both places. Your fans have picked their sides. Then you get more of the gaming fans coming in, who just want to decide which console is better for them. They’ll look at graphics, franchises, but also, does this thing have something for everyone in the family? What’s the meme on the street about this? Is it the winner or the loser? Is it something people love?

The network effect of the Live ecosystem and the different online systems is pretty strong. I think it’ll play out over years, the competition.

GamesBeat: Did you feel any little pang when Ubisoft said Watch Dogs was going to slip?

Spencer: In a way it was less negative for us, because our launch lineup is pretty strong in that genre space. Maybe this is just the corny gamer in me, but I want games to be right. There’s the old saying that you’re only late once, but you’re bad forever. I’d rather they take the time to get the game right, as somebody who wants to go play it.

We have more than 20 games for launch. The amount of great content we’re going to have is high. So I think it’s good for Ubi to take the time with a new IP. I know that it’s difficult for any company to manage slips in big franchises, but for the long run it was the right move for them.

GamesBeat: When you decided which IPs would hit this year versus maybe coming next year, was there a natural sequel cycle that you took into account there? Did other things come into play?

Spencer: It’s different for different games. Let’s pick Ryse, just because it’s been out for a while since E3. You start with trying to find what the game is. That can’t really be scheduled. It takes a lot of iteration time through the concept phase of a game to figure out. Do you have a fun mechanic in place?

When we originally announced the game, it was more about announcing the partnership with Crytek than anything. It was a human walking in the video, if you remember when we first launched it. So Ryse hitting launch happened a little bit later in our life cycle, as we finally found the game we wanted to build. Then we looked ahead and said that launch would be a great time for that. I knew that games like Quantum Break and Sunset Overdrive, based on where we were in the process, would be later. That was fine.

Having a racing game at launch, though, is pretty important. We had Project Gotham Racing on the original Xbox. We had another Project Gotham at the launch of 360. Making sure we have a great racing game available day one has been critical. These are E-rated games. There’s a lot of car racing fans out there. It’s fresh content that anybody can see and play. It shows off a lot of the graphic capabilities of the box.

That was something, talking with the Turn 10 studio about getting a Forza game at launch, which was a little more planned. Luckily we were able to do it. When we did Forza Horizon last year with Playground in the U.K., the thought was that Turn 10 could then get to an Xbox One launch game with Forza 5. It was great that they were able to land it. There’s no guarantee that it’s going to happen, when you try to do the portfolio planning. They’ve done a nice job of landing a great multiplayer and single-player game for day one.

GamesBeat: It seems like it’s gotten harder to define what an indie game is these days. The debate over who was friendlier to indies was interesting because of that.

Spencer: I just go around kicking them. [laughs] It’s good for the console business that we have such a diversity of developers creating hits. Three or four years ago, there was an anticipation that the console game space was going to be winnowed down to three or four big franchises and everyone else would go away. You remember the whole dialogue around whether the mid-tier was going to go away on console. That space where you’re not big, but not really small, was going to die.

As more developers have come in, more styles of games have come in, and the online ecosystem has strengthened, you’ve seen that the thousands of developers finding success on Android or iOS or PC can also find consoles as a viable place to release their games. That’s great for the console business.

As far as who’s friendlier, that’s more of a little PR thing than anything else. We’ve had great indie games on our platform. Sony has a great lineup of indie games. In the end, if you’re an indie developer, you want your games in the hands of as many people as you can get them to. We’re both creating ecosystems that make that possible with self-publishing.

For us, turning retail kits into development kits was a pretty important part of our road map. That had to be planned in pretty early, when we thought about the security model of the box and the OS. Cost, for an indie — which I talked about on the server side — is an issue. If you can turn your retail kit into a development kit and back and forth, if you can build your game and test your game and play your game at the cost of a retail kit, that can help unlock things for the indies. We’re not there right now, but we’ve announced that plan. We’ll get there in the not too distant future.

GamesBeat: Have the other guys said anything that’s really set you off? Is there anything you feel like you need to answer?

Spencer: [laughs] Actually, no. They’re good teams. They’re in it for the same reason. There’s a little bit of — I mean, there’s going to be a billion Android devices sold this year. We’re all competing in this space with a lot of devices that are capable of doing more and more things. In some ways, we’re bound together as people trying to make the television as capable as any other device. There is a possible world where the television falls off of the compute bandwagon. I don’t really believe in that, but if you think around the proliferation of tablets and phones—My daughters are 18 and 15. They watch most of their TVs on their tablets. That’s where they get most of their content.

So in some ways, I think we are somewhat together in what we’re trying to go innovate. We’re taking different approaches to it, but—Adam got me with his T-shirt. What did it say, “Random Indie Developer Logo Here”? That was well-done. I told him to send me a shirt, which he still hasn’t done. [laughs] I don’t just say this because it’s an interview. I have a lot of respect for what they’re trying to do and the success they’ve had with what their studios do.

GamesBeat: With that said, how do you feel about some of the other competition coming in to the playing field? Valve is coming out with their Steam machines. How do you feel about them bringing their living-room strategy into the mix?

Spencer: Or even the Ouya, right? That’s in Target now. I got my Ouya a month ago, I think, and I’ve been playing a little bit of that. First, Valve and some of the people behind Ouya, we know them well. Valve is right down the street from us. They’ve done a great job of keeping the PC ecosystem strong at a time where I don’t mind saying that we could have been more focused on what was going on in PC gaming. We were probably too focused purely on console. With Steam they’ve done an amazing job of building this thing that, in a lot of ways, we should have been building as well at Microsoft. When you see what we’re trying to do now, we’re probably more invested now in Windows gaming than we have in a long time, and in studios.

We’ve had Media Center and other things where people plug a PC into the television. There can be some challenges there. There are some things about that, just the way the technology is built and what it’s expecting, that aren’t always natural. That’s why we built the Xbox in the beginning, because plugging a PC into your TV can be a challenge for the non-tech-savvy. You don’t want your TV to crash.

But Valve is a very strong company. Gabe and Scott Lynch and those guys are incredibly smart. I have a ton of respect for what they’re going to do. They have a good first party. If you look at them and think about Half-Life and Left 4 Dead and Counter-Strike and DOTA, they’re a strong competitor that I look at. I’ve been really impressed with what they’ve done over the last 10 years, what they’ve built with Steam and everything else.

GamesBeat: How do you feel about their Linux push? Most game servers are on Linux, but that’s about as far as it goes.

Spencer: Yeah. This is where I think they’re going to have to do quite a bit of work. There is a difference between being a game developer, running a store, and being a platform company. That’s an evolutionary jump. They made the jump from building Half-Life to having a set of franchises to running Steam. They did a good job learning through that.

Now they’re taking the next job to becoming a platform company – in some sense a hardware company, but in the truest sense more of an OS company. That’s not an easy transition. Like I said, they’re smart. They’ve been through it. I think they can do it. But I think it will take time. As far as the OS, obviously, we love Windows. Linux isn’t Windows. We’re focused on making Windows and Xbox and Windows Phone the best connected ecosystem we can.

GamesBeat: Does Windows Phone come into the picture much for you? There was Halo for Surface.

Spencer: And Phone. Spartan Assault is out on the phone.

GamesBeat: Do you foresee more of that coming, where you can try to do an exclusive for those platforms?

Spencer: I do. The experiences that allow me to connect into a game experience or an ecosystem across any of these devices, with the strength of identity — We have Xbox Live on every one of those platforms. We have your friends list. We have your achievements. We know what content you own. We’re able to think about how to build out those ecosystems.

We launched a game — It’s not the biggest game, but last January we launched Skulls of the Shogun simultaneously on 360, Windows, and Windows Phone. We let you play, pause, or zoom across any of the screens, so you could start playing on the 360, continue on the phone, and continue on the Windows machine. We’re going to continue to push in those areas. For us as a company, obviously, it’s important. But I also think, more and more, just as creators, those are the games we’re going to want to build.

You see games like Clash of Clans going to Android now. People want to get on more and more of the devices. You need to reach consumers wherever they are with your IP. That’s what Netflix does. That’s what ESPN is doing. As game creators, we’re going to want to do the same thing. It might not be the exact same game, but some way of connecting in so I’m playing and it matters to the game world I’m investing in, absolutely.

GamesBeat: What do you think about the sales pitch for the Xbox One, given that there are things like the iPhone, the iPad, all these other things that weren’t there at past launches? There are so many other ways to play games. What’s the best pitch for Xbox now?

Spencer: I start with the relevancy of a TV in the home. The TV screen itself still remains the most important screen. I think about how I arrange the furniture in my house around that screen. So when I think about our pitch for — whether you like the term or not — an all-in-one entertainment device that takes all the interactive social that we’ve learned in gaming and brings that to every form of entertainment that you have on your television, that’s our critical differentiator as a platform.

It’s why we’ve focused so much on the HDMI passthrough, on making sure that voice is always there. It’s taking that magic of knowing who your friends are, being able to connect to your friends across any experience. You can play together, and now you can do that with gaming, entertainment, music, video, all on one box that uniquely understands who you are. That’s the pitch.

Day one, we know the customer is a core gamer. That’s why we do events like this and invest so heavily in core games. But over a long life cycle, this console is going to be as much about the all-in entertainment value as it is just about core games.