Xbox head on stand-alone Kinect: They'll buy it

The Xbox One has been outsold by the PlayStation 4 to date, but Xbox head Phil Spencer isn't about to concede defeat. Speaking with GamesIndustry International just after Microsoft's E3 media briefing earlier this month, Spencer acknowledged Sony's lead, but noted there was plenty of time left for Microsoft to erase it.

"You look at what Sony has sold, and congratulations to them; they've had a great launch," Spencer said. "Maybe we're 10 percent of the way into this generation, so we're early, early days in how this will all play out. I tip my hat to them. I think they'll likely have a great show, and they should; they're coming in with a lot of strength. But this is a long-term competitive space, which is good for consumers."

When asked why Xbox One fell behind in the first place, Spencer only stressed how important it was that Microsoft recently rolled out a version of the hardware without Kinect for $399, the same price as a PS4. Despite the removal of a core part of the original Xbox One vision from the base hardware package, he dismissed notions that it would make it more difficult for developers to justify supporting the peripheral.

"Because people are continuing to use [Kinect], it's an area we're going to continue to invest, in terms of making the experience better. And I think that makes building games in that environment even better."

"A Kinect game relies on the successful Xbox One installed base," Spencer said. "I need to, as the head of Xbox, make sure that we've got a platform and a product offering that millions of consumers will love, and I stay focused on that. That's where I'm at now. We'll also continue to evolve what Kinect can do.

"We see millions and millions of people using Kinect today. We've had over a billion voice commands used. The use of Kinect in people's homes is incredibly high. And because people are continuing to use it, it's an area we're going to continue to invest, in terms of making the experience better. And I think that makes building games in that environment even better. Consumers love the device; they love the experience. They'll buy it. They'll either buy it at launch when they buy their console, or they'll be able to buy it after the $399 console; they'll pick it up and add it on later. And we'll continue to make sure that experience is great."

That was part of Spencer's plan to overtake the competition. Another part was evident in Microsoft's briefing, where the company spent the first hour of the show on games coming out this year. Another notable characteristic from the show was just how much of it was focused on games for the traditional core audience, with little noise about pursuing broader or more casual audiences. Even the Kinect seemed to take a back seat compared to years prior, relegated to little more than a short plug for a pair of Harmonix games: Fantasia: Music Evolved and Dance Central Spotlight. Spencer said he tried to feature a variety of experiences at E3, from smaller story-based games to AAA shooters, but said any emphasis on the core audience was likely a function of where we are in the console cycle rather than Microsoft's overall strategy or E3's relevance to the mainstream.

"We're kind of the first E3 for these next-generation consoles where they're actually in the market," Spencer said. "If you think early on in the lifecycle of a new console, the price points are higher, and your core early customer is usually somebody looking for a high fidelity, high impact game on their television...It's a reflection, not of E3 or any change in our industry's capability to reach a broader audience, but just recognizing this is the first E3 with both Xbox One and PS4 in the market. And publishers as well will try to chase that early customer that's there for the consoles."

One trend at the show not visible in Microsoft's presentation was virtual reality. Much like Nintendo, Microsoft is watching the VR trend closely, but primarily from the sidelines.

"Sometimes through some of the social media channels, you get a vocal minority giving you feedback, and that's OK. But you can't take that as a horizontal view of what everybody cares about..."

"VR is an interesting technology," Spencer said. "I don't know that it's mainstream yet, if you think about experiences in the home for consumers. But I think it's great that the game space, whether it's what Sony is doing or Oculus is doing, that so many of the innovations you see all up in consumer electronics have come out of the game space. VR is something in games and out of games. I'm watching how that evolves over the next few years."

Microsoft didn't speak to any Microsoft VR projects in development, but did say the company's long-term roadmap involves research into a lot of things that could become mainstream technologies. For now, though, he's primarily focused on Xbox One.

If Microsoft has undergone a change in strategy since Spencer took over in March, it's been most visible in public messaging and, as he put it, "sequencing our focus."

"I know this console has to win first and foremost with the gaming community out there, the gaming fans, the gaming customer," Spencer said. "Winning with the gaming customer, focusing on Xbox Live as a long-term differentiator, and the entertainment experiences are incredibly important to our long-term success, but you have to sequence the focus in such a way that the core customer for your box understands what you're about."

A large part of that communication has happened over social media networks like Twitter, Reddit, and even Xbox Live, where Spencer and the rest of the Xbox team gather feedback and opinions from consumers who either haven't bought the console, or who have one and want to see specific things happen with the system.

"Sometimes through some of the social media channels, you get a vocal minority giving you feedback, and that's OK," Spencer said. "But you can't take that as a horizontal view of what everybody cares about, so you're trying to open up as many channels of communication as you can. We have our own ideas about what we'd like to do and you mix [them]."