Microsoft's Shane Kim on All Things Xbox

"I've been around the industry long enough that I've experienced the launch of Halo, Halo 2 and Halo 3, the Xbox 360. [Project Natal] feels as big, if not bigger, than any of those things."
6/18/2009 12:11 PM | 0 Comments | Page 5 of 5

Crispy Gamer: Are you working on the next-generation system at this point as well?

Kim: We have a lot of R&D working on a lot of areas. What I'll say is that we talked about Xbox 360 as having a 10-year life cycle. But we obviously knew about Natal coming along. We didn't want to be on the same treadmill of, hey, there'll be a new console every five years. Frankly, that's the old playbook. I'm convinced that the next generation will be defined by software services, not by hardware.

So the jump from 2-D to 3-D made sense. The jump from SD to HD made sense. The jump from HD to the glory that we can now provide on the Xbox 360 made sense. Those were good reasons to release the hardware. But Milo is pretty lifelike. Gears of War is still really, really beautiful. So we would really prefer to add more things to Xbox Live. We're a software and services company. We know how to refresh the experience without having to make people buy a new $300 to $400 piece of hardware. That has important ramifications for the industry as a whole, because we're not starting over from an install base.

Crispy Gamer: Will the camera for Project Natal be very expensive?

Kim: It's a very sophisticated piece of hardware.

Crispy Gamer: It's not going to cost going to cost as much as a console, right?

Kim: We're not talking about pricing yet. But what I've been telling people is that we, of all people, understand the value of cost consciousness. We are benefiting by having the lowest price console on the market today with the Xbox 360 Arcade. While the industry's overall revenue declined in the last two months, we're up 30 percent in 2009, year over year from a hardware unit standpoint. That's pretty impressive given the economic climate. So we understand the value of having the right price. We will absolutely be conscious over the pricing of Project Natal.

Crispy Gamer: And if you have the right experiences, people will pay?

Kim: I've been around the industry long enough that I've experienced the launch of Halo, Halo 2 and Halo 3, the Xbox 360. This feels as big, if not bigger, than any of those things. You start off from that standpoint. Then, you know that there's consumer excitement and anticipation. You think, boy, we're lucky because intrinsically, we've built up the idea of value in people's minds.

Crispy Gamer: Do you feel you have the killer app right now for Project Natal, whether you've shown it to us or not?

Kim: Yes.

Crispy Gamer: Do think that's Milo or something else?

Kim: I'll just say, yes, we have it. We do have a lot more in development that we didn't yet share.