Kinect will launch on November 4 during the extremely competitive holiday season. For Spencer, neither the possiblity of supply issues nor that of being shown up by a third-party publisher for Kinect seems to be a pressing concern.
"We are comfortable with the supply," he told us. "What the retailers are telling us is that interest in the platform seems to be incredibly high. Then our TV ads started this week, but people seem to be really interested. Pre-order numbers are good. I've been in the games business for a while and I love pre-order numbers, but the proof to me is when it sits in somebody's home and they're having fun with it -- and we're gonna know that after it hits.
"Retailers seem really excited about the opportunity that's there with Kinect, Oprah said it was one of the 'hot things' -- she has that term -- and I'd call that more of a consumer affirmation of what we've been trying to do is resonating with people. But yeah, retail channel seems to be excited for what we're doing. We feel good about our supply that we can build. I imagine we're going to have to work hard to fill out the demand that's out there, is kinda our sense, but we're willing to work hard, so that's fine."
As for Ubisoft setting out to become the top third-party publisher of Kinect titles and perhaps beating Microsoft at its own game, Spencer said. "The role for us is to try to push the boundaries of what people see on our platform and create blockbuster hits that brings customers to our platform. The fact that Ubisoft has a goal of being the number one Kinect publisher, I love it. Xbox 360, or Xbox from the beginning, has a long history of successful third-party relationships. We're usually, as a first party, roughly 20 percent of the market on our box -- other people have a different approach. I don't need to be 80 percent of the games sold on the platform. That is not in our charter."
Kinect will launch in the wake of Microsoft's successful console refresh, the Xbox 360 S, which seemed intentionally timed to build up Xbox brand awareness prior to the holidays. According to Spencer, despite Kinect connecting more conveniently with the new console (no separate power supply required), the Xbox 360 S was not released just to suit the new peripheral -- the goal was to continue to improve the console as an all-around entertainment system.
"What we see playing out is us focusing on Xbox 360 and Live becoming more of an integral part in somebody's overall entertainment platform, as opposed to just purely the thing they play Halo or Call of Duty on. And when we looked at it from that perspective, frankly there are some things about the first Xbox 360 we've always wanted to do. We wanted to make it quieter; we wanted to make it smaller; we thought there were some things we could do with the hardware to really make it a kind of more inviting piece for somebody's media room or family room -- that's where we focused.
"We knew we had Kinect coming along, so we were able to do some stuff with the way Kinect plugs into that, but obviously it's a bit different. Kinect works with both boxes, but the older boxes you need the power cord, so we could take advantage of that; up the HDD capacity. But they were kinda separate from one another.
"Frankly, the success we've had with the new Xbox 360, I'm not going to say it's surprising, but it is nice to see, because it's the launch of new hardware for a platform that's been around for a while. People really seem to enjoy it, and even the Halo: Reach special edition bundle really seemed to move well, so it's nice to see people putting more 360s in their home, and it seems like we're getting some new 360 customers."
As with the original Xbox 360, the new hardware is offered in two standard models -- the 250GB and the hard-drive-less 4GB -- in addition to the limited-edition Halo: Reach-brand console. So which of these is Microsoft's current top earner?
"We didn't put enough of the Halo: Reach consoles in to be the difference maker," Spencer noted. "We understand the customer for that, and it's kind of a limited run that we do with those kind of things. Really, it's been four months running now and it's a similar split like we've seen with the old 360, in terms of people taking in the Arcade versus the higher-end Elite SKU, so the splits remain the same. We are seeing more and more new customers come into the platform, which is nice."
As for the various retail options for Kinect, Spencer said, "It's one of those questions. The core has really been on us, saying, 'Hey, this doesn't feel like it's for us,' and we wondered about the split between the bundled sensors and the standalone sensors -- are people going to be in line for both?
"And it's turned out that both have been, I don't want to say 'well-received,' because we haven't sold any yet, but the anticipation has been high for both. The bundle price is really nice, and then the standalone sensor -- people seem to be really interested in that; which tells me that the existing Xbox 360 base, while still giving me a hard time about, 'When am I gonna see X, Y, or Z franchise?' does seem to like kind of the science and the creativity of Kinect."
Additionally, Spencer offered some insight into why Kinect Adventures is the pack-in title. While it wasn't always the plan, when Microsoft decided to include a game in the standalone package, it was about "wanting to put the best thing in the box," according to Spencer. Created by Kinect frontman Kudo Tsunoda's team to show off the tech's variety of functionality, Kinect Adventures became the obvious choice.
"Do we need a pack-in? For a customer who completely gets what Kinect is, you could probably just sell them the technology -- there's a certain amount of science-fiction in Kinect," Spencer suggested. "For some people, I think you want to have something right out of the box for them to understand the full breadth of what's possible with Kinect.
"So with video playback, the Dashboard stuff -- all that works -- but we thought we should put something in there that really shows that kind of new customer to our platform (maybe even a new customer to gaming) that here's actually the world you entered. There are a whole lot of other games on the shelf, but we want to make sure it's as easy as possible for somebody to get into it. And it's just a good value, as well."
Of course, no conversation about Kinect is complete without bringing up the other, new motion-based technology vying for consumer attention this holiday: PlayStation Move. Spencer revealed to Joystiq that he actually owns a Move unit, but sees the value of Kinect being something "fundamentally different" and more "immersive" than Sony's effort.
"For us, there is no hardware interface between you and what goes on on the screen," Spencer said. "If you want to jump on the screen, you just jump. If you want to kick the soccer ball on the screen, you raise your leg. If you want to steer the car, you put your hands out and steer.
"The idea that there's no interface tracking the motion of something -- it's actually tracking your skeleton and what you're telling the 360 through your movements what you want to happen -- it's a different immersive experience. What we've been able to unlock, and we're just at the beginning so there's a lot of head room, what Kinect allows developers and other creative people to do is think about a total immersion of my body impacting what happens on-screen. Instead of me having to learn what do -- I shake or hit to make something happen on-screen -- the machine is actually learning you. This is how we built the games.
"What the retailers are telling us is that interest in the platform seems to be incredibly high." - Phil Spencer, Microsoft
"For example, when we were developing Joy Ride, we brought a bunch of people in and said, 'Steer a car.' Some people did this [motioned as if driving with a tiny steering wheel] and some people did this [motioned as if driving a big-rig truck]. Certain people even turned their entire body -- and it all works, because we took that as the challenge.
"We're not going to make you put your hands six inches apart -- we're going to put the onus on the machine so that the machine enables you to do what you wanna do. Most of the experiences, you can see, are that way. They're reacting to what you're doing, which is completely different than shaking something or hitting a button and having something happen. And I think the creative canvas that unlocks makes it completely different.
"Taking it one step further," Spencer concluded, "When you think about non-gaming experiences, such as ESPN and voice -- if I can sit there and say, 'Xbox, play,' and the movie simply starts, I don't wanna gesture, I don't wanna shake something; I'm seamlessly interacting with something. That is the unlock: gaming, entertainment and what Kinect allows. That's the fundamental difference and a whole other form of technology."