Microsoft's Phil Spencer

I didn't say it didn't make a difference. I believe 3D will absolutely be a core component. I'm just saying for us, as a platform company and a content creator, I want to have a larger addressable audience we can sell content to and then do things that actually move the state of the art forward.

Other than copying what other people are doing or just trying to sell you a TV, I want to see that creative movement going forward. So I'm not a non-believer in 3D; I just think it's a technology in the home which is still in an incubation phase.

Yes.

As a console, we've been fairly priced relative to the competition and the value we deliver to the customer. We thought long and hard about Kinect and we want to make sure it's a long-term part of our platform, so getting the pricing right is important. We want to make sure the experience we deliver is in line with the price and we think we've done that.

The technology is the same. With platform evolution there's code that goes in and code that comes out and code that gets fixed and code that gets added. The important thing for us was thinking about the play sessions that we really wanted to support. For us, that was about multiple people playing in the home.

Kinect is actually very affordable, relative to maybe what some of the competitors are shipping today. If it was here in this room, you and I wouldn't need to buy two sensors to play. Four of us could play. That's the core tech we wanted to nail, and I think we have.

[Pause]

No. I think even the corest of the core understand there's some kind of price envelope you want to sit in...

Well, you know, selling a $10,000 console... If we had a $10,000 console I'll bet it would sing and dance.

Yeah, and that's probably how many we would sell... The whole notion of the console generation is going to blur a little bit, especially as the online service becomes such a pervasive part of the experience.

We are significantly adding to our platform this fall with Kinect - not only from a hardware standpoint but from a software standpoint. Does this extend life for the 360? Absolutely. Right now when we look at our hardware we're very comfortable with the kind of experiences we can bring to market and we think Kinect opens up a whole new opportunity.

We're always thinking about what's next; that's how Kinect came about. We asked, 'What's the biggest barrier right now to us getting to the hundreds of millions our aspiration?' It turns out it wasn't the GPU, it wasn't the CPU, it was something as simple as the friction that's created by everything having to go through a controller.

I didn't make Akihabara this time, but yeah, I'm kind of a collector. When we purchased Rare it was funny because I wasn't a Nintendo person growing up, I was more of an Atari, Commodore person. I remember trying to go find copies of GoldenEye, Perfect Dark and the old Banjos. That peaked my interest in collecting old consoles and it's a little bit of a hobby, yeah.

But I'm not sure we made the collectors happy with our announcement. I'm sure the prices on eBay took a dive.

I apologise for that. I hope the gamers are happy though.