Microsoft's Don Mattrick

Yes, absolutely. It gets boring getting asked the same question from different people all the time and there's been a lot of misinformation, so I used the E3 opportunity. We're the first box in this generation to pass 10 million units, we've passed so many thresholds in terms of quality titles. You look at aggregated reviews from around the world - you go onto Metacritic - and count the number of 90-rated titles on our platform, compare that to Wii, compare that to PlayStation 3: there is no comparison.

We know that our third-party partners have a tremendous well of content coming to our platform so there's support. We know that we're driving the majority of their revenue and profit growth. We know that in prior generations, whoever creates that ecosystem where people can scale, can be profitable, can grow, that they tend to win. The other thing we know is Sony's given guidance and said their goal is to create ten million units this coming year. Needless to say, our aspiration is to do more. We also know we have a volume lead both in Europe and North America, and with that volume lead in the aggregate, when you add in Japan, is larger than Sony's.

All those things - I basically just do the math: know what growth we've got, know all the new things, all the capabilities to add value, utility; we've got an amazing product and we just have to keep evangelising to get more people to try it, because when they do, they love it.

I think we're going to outperform them.

That's what I said.

Not at all. You kidding? I'm elated with what we've achieved in Japan. Our partners are elated, we're getting more and more support, and again you need to start, you need to participate.

Building relationships with Japanese companies and consumers is not something you can do in a short period of time, and I have nothing but positive feedback to show from all of the key leaders of the Japanese companies. They think we're doing great work, they're cheering for us, they're concerned about growth rates in Japan and they see dramatic growth occurring in North America and Europe and know that they need their partner that they can work with and participate and think we're the best partner. So I think we're doing great work, making great progress. I'm really pleased with what we've achieved.

Absolutely, and let me tell you why. The first cut of our show we had lined up all the things that were ready to go and ready to speak to people about and it was a two-and-a-half-hour show at the same pace that we did. So in prior experience sitting in the office, I kind of had a general rule of thumb which I shared with the team that I didn't think we should go over 90 minutes.

We need to be respectful of the audience that if we were delivering and showing things - and by delivering and showing things here's what I mean: showing real software and talking about ship-dates, a pretty novel concept right? People playing and us telling them when it's going to ship, centring it on things that are coming in 2008, another novel concept. When we put all those things together and showed all the things that we did, we did our first run, we had over two and a half hours of stuff, so then the question is: do you hold everyone captive for two and a half hours and run through it, or do you park some things?

One of the things that we decided, when you have the number one game in the world as we have in Halo, it's a safe prediction that if we do a separate event for Halo, that it'll be well-attended, well covered and allow people to get hands-on experience of using the products, and that we can generate a tremendous amount of press with that, so we didn't feel we needed to show Halo to have a great show, to pay homage to our core audience, to have a lot of news, so it was an embarrassment of riches and we couldn't fit it in. How great is that? I think that's awesome.

Yeah, we're going to have an event another time of the year that'll go deep on Halo and I think it'll be well-attended and people will enjoy it and be able to interact with the products in a more intimate setting than the E3 briefing.

So that's what we're going to do and I think we're smart. I had so many people come to me and say "look at that, that's a measure of growth and maturity of Microsoft - the fact that you have the best show, the best collection of products and you didn't even have to show Halo". So what a wonderful position to be in.

Yeah, well, look, it's not a surprise to people that there's more Halo products in development, right? Again, number one product of 2007. So there's an ongoing work-stream with Bungie and with others - we've got all kinds of new things in development. It's awesome, it's highly anticipated, it's friggin' Halo! People love it, right? I can't say a lot about it.

We're going to create an opportunity where people can interact with it, we think it's going to be super high quality, super fun, super innovative; it's the easiest thing for us to message, so stay tuned. There's lots of good news on that.

You kidding? I talked to Harold myself last night.

Sure they're disappointed. Any software creator would be disappointed. Harold just laughed and he said, "Boy, just a sign of growth inside the business, we agree," and I actually think too, again, we just have so much news with playable software, with dates, with things for people to touch and interact, we probably had too much stuff. We've had more than a year of productivity since the last E3. [Editor's note: Since this interview was published, Bungie has contacted Eurogamer to present its side of the story. Ryan has said: "I certainly didn't agree with the decision to delay our news until sometime after E3."]

The funniest quote I heard was someone say, "Yeah that's true, how do you think about it?" and I say I think our team showed up for work every day, had more than 12 months of productivity, and it kind of feels like the competition took an extended holiday and didn't get as much done as a result. I like our show and I like what we achieved.

Absolutely.

I thought ours was the best for the reasons that I said. Again, I personally...Some of the things we'd seen before.

Yeah, with no new detail. I think videos have a place, but I think the people travelling want to see real stuff, want to get a chance to interact and use it, so we received a lot of compliments for that.

I think Nintendo's doing a great job with youth. I think they've got a couple of flagship Nintendo products that consumers are going to love. I think that they have a different usage pattern. Our core consumer, I think, is the most sophisticated media consumer on the planet. The 18-26 year-old gets to try everything, they have their own discretionary income, they spend 2x the amount of time on our products relative to competition - the study came out just the week before - they influence their younger siblings and they influence their older friends and family members.

So hey, everyone's got to have a vision, pick a place, build an audience, pay homage to that audience, and bring new forms of entertainment, new events to grow the business - and I think we did the best job of staying true to being aware of our core consumer and showing new things, and not doing it at the expense of the core consumer.

It was a good show for us and again kudos to my team, they got more than a year of work done, and I hope the other guys got some great pictures when they were away on vacation.

Oh no, let me put you right on that - I'm claiming ownership of Avatars for the whole industry. I did 4D Boxing in the '80s, so I was the first guy to ever do a 3D game with the human figure, I worked on The Sims with Will Wright, I worked on Ultima Online.

Here's the humour. Watching the briefing, someone beside me joked about one of the companies that we should send them a cake with a card saying, "Welcome to 2002. You've got identity, you've got billing now. Woo."

What we talked about is the natural evolution of what we pioneered, what we invested in, what we staked a claim to well before others were even thinking about it. And with that identity, with the Avatars, not only did we make it as a way to see yourself as you move through the community and interact with people, we also showed a whole new type of experience with 1 vs. 100 where that Avatar goes into the game, it's on-screen, it's either the one, it's the 100, it's part of the audience, you win real prizes.

No, I mean, look, what we want to talk about at E3 is we want to have primarily a holiday 2008 focus. Things that were coming to market in that timeframe had a lot of feature discussion. We had some stuff that's coming to market early in 2009 - that seemed reasonable and the right thing to do.

As you know, my background is as a creative and technical leader - we've got all kinds of cool things in all parts of our business in pre-production. We never comment, we never talk about speculation. What I want to do is build things that are amazing at their core, have excellence, and let products speak for themselves. So that's where we're going to stay - the speculation game just isn't a smart one.

I think we heard Sony talk about a ten-year cycle and Nintendo talk about a longer cycle. We've just provided an amazing new experience through the new Xbox software update, so I think these boxes are incredibly powerful, and I think consumers - consumers care about value and innovation - so I think there's a lot of room to grow our business.

We just announced a transition from 20GB hard disk to a 60GB hard disk at the same price point, so 3x the storage, no incremental cost. That's kind of the beauty of the tech curves - as time goes by, the cost of components decreases and you can bring more value to consumers in the example of the 20-60GB that we spoke about. So there's a lot of room for growth, industry's at record levels.

At the same time, we're going to think about new things all the time - that's my job, right? My job is to have an opinion on what's great in hardware, what's great in software, what's great in services, what's great in relation to Games for Windows, what's great in relation to mobile - all forms of entertainment.

So we're always looking at things, we're always thinking about things, but where we are doing a fabulous job is executing on our Xbox 360 programme.

It's a broader discussion. Last time I looked, there's 97,000 titles on DVD. It accounts for 99 percent of the volume of that business. There's high-definition TV, there's up-res DVDs right now, so I kind of wonder if this format wars is a bit of a Trojan Horse.

I think that what people want is digital high-def content, I think that's what our box provides, and we've announced several movie partners - and one in particular, Netflix, for the streaming technology. People love being able to download and interact instantaneously with high-def content. I don't have to go somewhere, I don't have to buy a disc, I don't have to pay a 12-14 dollar or 6-7 pound premium to do that. I don't have to have my face be two feet in front of my TV to see the difference.

Last time I looked at my living room, I was more than 8 or 10 feet away from my big-screen TV and the most recent demos I saw, it was someone in the industry - and I won't name who, because they would be so embarrassed - but they were showing a bunch of us Blu-ray and the person said, "You're sitting too far back to notice the different, get closer." I was like, okay!

When you put it all through, it's an interesting PR war that Sony's fighting with that front. I'm not convinced it's going to be a driver of sales. I think it's going to take a long time to get to even 10 percent of DVD volume, and I think consumers are going to say, "interesting format", there's going to be some early adopters of it who are going to think it's important, and there's going to be a bunch of people who say, "You know what? I'm quite happy with what I've got on DVD, I'm quite happy with my movie library, I'm quite happy not paying 6-7 pounds incremental per movie, I'm quite aware that I watch a movie once, maybe twice, but it doesn't have the same utility as games," and I think high-def and digital are more interesting forces of change in our space than the format of storage.

We talked about worldwide, and again we've a pretty substantial lead right now. We know what we're going to be bringing to market, and as you and I get more years together talking about this stuff, you'll see that I tend to be very thoughtful on what I say, and I tend to let results speak for themselves. This was just a point of clarification, because for me it was just so painfully obvious, someone in the industry needed to say it.

It's so boring, right? I'm a businessman, I think that's going to happen, I did the math, I did the math a different way, I did the math...there was no equation that I came to where I got a different answer, and I went, "You know what? This is getting boring." Like, instead of everyone standing on the sidelines trying to hedge, I'm just going to say it. So hopefully people will appreciate that and that's what I think you do when you're leading a company.