E3: Microsoft's John Schappert

On digital downloads, exclusives and Natal.

Xbox boss Don Mattrick was washing his hair when we came to call at E3 this year - perhaps wary of spectacularly putting his foot in it again - but Eurogamer's Oli Welsh did get to speak to the affable John Schappert, boss of Live and services, about the company's various announcements, including Natal (yes, again), the games-on-demand service and other Xbox subjects. What does 'exclusive' even mean these days, for example? Read on to find out what Schappert reckons. - Tom.

Eurogamer: At the roundtable after your conference on Monday you revealed the games-on-demand service, which will include older games. Is there any plan to expand that to include new releases?

John Schappert: Not right now. Right now the plan is to have classic titles. We're talking about 30 titles at launch - I think we mentioned BioShock, Mass Effect, Sonic, Civilization Revolution. Some of these titles are great titles, but retail shelf space is at a premium, and not everything manages to stay at retail for as long as consumers would still like to buy it, and we generally think there's a lot of legs left on the 360 - we think we're only halfway through our cycle - so we want to pick up some of these older, great games you can't buy at retail.

Eurogamer: You can also make purchases with credit cards. Does that mean you're thinking of ditching Microsoft Points in the long term?

John Schappert: No, that's simply to facilitate purchasing of these games, which will be at higher price points obviously than standard Arcade games or microtransaction-based content that you have on Marketplace. You'll be able to use Microsoft Points as well, but rather than have to buy X-number of them, we thought this was an easier step.

Eurogamer: Can't you extend that to smaller purchases as well?

John Schappert: No plans right now.

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Project Natal.

Eurogamer: The Natal project obviously radically changes the Xbox platform without you having to launch a new Xbox platform. Are we, do you think, post-hardware now, in a situation where platforms can evolve without necessarily needing to launch new pieces of equipment?

John Schappert: I think the power of Xbox certainly has brought that about. We're looking at the dashboard right now [in the interview room], and it's vastly different to when the Xbox launched years ago. We have avatars now - you still have your gamerscore, you still have friends list, but now we've got a Video Marketplace, in the US we have Netflix, we have Sky, we're adding Last.fm, we're adding Twitter, we're adding Facebook, so the power of a broadband-connected console with upgradeability has allowed us to truly change the functionality of that device.

When we talked about the New Xbox Experience last year, we talked about reinventing the console through the magic of software, and I think we've done that, and what we've shown with our new update that we're bringing out this year is we're continuing to add innovation and continuously improve the console experience - and I think there's a ton of power in that device right there, and we still have untapped potential and I think Project Natal will continue to extend our life for a long future with Xbox 360.

Eurogamer: Are you now targeting something like the 10-year cycle that Sony's been talking about with PS3?

John Schappert: I'm hesitant to date a year cycle. No one can predict the start and the end. What I can say is, we look ahead and we say, gosh, look, when we started life Facebook didn't exist, now we're partnering with Facebook. Last January, we had 10 million Xbox Live members. We have 20 million members today. Three years ago we had our video store in one country. We have it in eight today, and by this fall we'll be in 18.

So I think there's so much more that we can do in this console, and we're still tapping into the power of it, and Natal is going to usher in, certainly, a new wave of gaming experiences but there's also going to be a whole wave of non-gaming experiences that Natal will bring us as well. We saw some interaction with the dashboard there, we saw some glimpses of how you might be able to play a movie with Natal, I think we've got a lot of horsepower left and a lot of runway left with Xbox 360.

Eurogamer: Natal does seem like a response to Nintendo's Wii and how it's changed the market. Do you really think you can beat them this late in the game?

John Schappert: I'd say Natal is more of a response to breaking down barriers and introducing entertainment for everyone. What we realise is as much as we continue to make [Xbox] more accessible - and I think it's far more accessible, and an easier-to-use system than ever before, with more functionality than ever before - there still is going to be that challenge of having people to get over the 10-button controller, and feel uncomfortable to navigate the user interface when you play games.

What Natal is, is a way of breaking down those barriers, making Xbox 360 accessible to everyone, and introducing the world to controller-free gaming. What gets me excited about that is it delivers experiences that we haven't ever seen before and you couldn't ever do before. The demos that we showed you were our early thinking on games and entertainment that you couldn't do with that controller, and you couldn't do with a simple wand-type controller either. It could only be done through full-body gestural-tracking, facial-recognition, voice-recognition control that Natal brings us.

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This may not be the competition in a technical sense, but it will be in the marketplace.

Eurogamer: But it's a branding challenge as well as a technical and design challenge in order to move into that space, because Nintendo is very dominant with those kind of consumers, whereas Xbox is perceived as more of a core product.

John Schappert: I think that it's fair to say that we certainly started our life as a core product. What I'm really proud of is the work that we did with the New Xbox Experience that we are recognised as an entertainment device now, it's not just a gaming device. There are people who have bought the console just to enjoy Netflix in the US. I think there will be people who buy it to enjoy Sky in the UK.

[These people] actually haven't played games on the Xbox. I think that when we can introduce those people to games - be it Xbox Live Arcade games, games that are innovative and different maybe like Joy Ride or 1 vs. 100, our interactive game-show - maybe we'll turn them into a gamer. If not, I'm happy with them just enjoying entertainment on the Xbox. I think it's an all-in-one entertainment device.

Eurogamer: Sony, you may have heard, announced its own motion control solution--

John Schappert: --Oh my goodness, no they didn't!

Eurogamer: Presumably this doesn't come as a massive surprise to you. Are you confident that your solution is the right one?

John Schappert: You know what, we're confident that we showed the world the future of interactive entertainment with Project Natal. We think, regardless of whether it's a controller you have to pick up or something you have to hold in your hand, it's another big barrier to being able to get people to enjoy interactive experiences, and what was important to us was controller-free gaming and using your full body.

Our goal is, you want to play great games, great controller-based games that started their life with that controller in mind like Halo, like Gears of War? Don't worry, we're going to continue to make great games like that - we even announced Halo: Reach. But, some other new games that we can't do with that device, Natal is going to usher in and bring us.

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