One Vision: Is SmartGlass the New Kinect?

There's a couple of things to think of first before we dive into the guts of it. It helps to think of it a little bit like Kinect, or Natal as we began calling it before it was released. The work that we do now - and I sat this as an industry - around new technology will evolve in a positive way. I get very few questions about Kinect now because Kinect just shows up across almost everything that we do in ways in which seem natural. Of course you can say "hey you" in Splinter Cell and guards will turn around because they hear you. That's because Kinect is there and it's working, two years ago no consoles could hear you but people expect it now. With SmartGlass a lot of the same stuff will happen. So a lot of what we talk about and the concept now will take further steps.

"The creative communities are part of all that we do. Kinect was picked up very quickly. The same thing will happen with SmartGlass. We set out the infrastructure and the community takes it places that we can't perceive"

When it comes to implementation what you should think about is there's an application that you can download on any devices' ecosystem. Any device that you already have, you go to the marketplace and download the Xbox SmartGlass Application, you'll log in with your live ID and that will connect us on the backend. We'll know who you are on iPhone and we'll know who you are on Xbox. When you sit down you'll connect with the app and now they're in sync. Anytime you change what's happening on your Xbox they will display on your phone and keep up to date with what's on screen. So if you're watching a TV show, you launch Halo or Madden, the device stays in sync. It's basically turning any TV into a Smart TV. Because now you have control and a display surface on other devices.

The added functionality is the ability to change what happens on the TV by interacting with the device. So it gives us a display surface for interacting with websites, for example. Another step, which I think is an evolution that we haven't seen come full force yet is for games. So with Ascend: New Gods we have a phone game that's connected with the console game that you play even when you're away from your console. I get notified when something is in my land attacking my temples and I can drop in and attack on them even though I might be on the bus somewhere and they're playing a console game. You'll end up with this distributed system across the different devices. And I think this is the third evolution of how this can grow out.

There's a couple of things that are required. One is an identity system so we know who you are wherever you might be. And then there's using a platform at scale. Now you get Xbox, the number one console on a global basis, 40 million people on Live, you're now reaching a global audience that's as large as any addressable audience of entertainment consumers. You can start building these ecosystem things like SmartGlass, with search, voice, and the business models evolve.

This fall, but we did something as a little bit of a precursor to SmartGlass. We didn't make a lot of noise but we re-released Halo as Halo Anniversary and we have the Waypoint app, which is a remote display of the Halo universe. That was us testing the pipes before we made a formal announcement on SmartGlass.

It depends on how deep you want to go. So if it's a TV app showing information that has already been created for the web and repurposing it for a display that's in sync with the time codes of where you are and watching the show, that's not very expensive. If I go to the other end of the spectrum like Ascend where I'm building a unique game experience then obviously there's a cost for doing that. The budgets on these games for these devices tend to be lower than our massive console games. The base level functionality is not terribly expensive relative to the work that you're already doing.

Last year we rebranded my group from Microsoft Games Studios to Microsoft Studios, and I got some teasing about taking the word 'games' out. I looked at our partnerships and the work that we're doing from the work that was shown from Sesame Street to ESPN, Nike, the game aspect became part of what we do but not all of what we do. When I stand in front of our organisation and look at the faces there's a lot more diversity in who people are and their skillsets. We're working on a broader content and you need the right people who are both skilled and associated with the work you want to do. So it's changed and evolved the make-up of the organisation in a positive way. And we've grown, we've doubled the size of out studios in the last three years.

As an organisation we have evolved as well. We're first party with Windows phone, I have 30-plus launch games coming for Windows 8 with different content to console and different business models to what you see on console. The world's going to a service based world, whether that's Halo that you buy at retail, World of Tanks that you play for free or simply playing something like Words With Friends. Thinking of studios as device-specific is going to go away. You'll start to think about teams. Take Rovio. Are they a mobile studio, an IP shop? And Mojang with Minecraft. That's something that's had a life on PC for a while, but it's just passed two million sales on XBLA. It's really about curating hits and then exploiting those hits on multiple devices.

Absolutely. The creative communities are part of all that we do. Kinect was picked up very quickly. The same thing will happen with SmartGlass. We set out the infrastructure and the community takes it places that we can't perceive. Some of those communities are internal studios but when it comes to the numbers, a lot of innovation comes from external ideas.

We haven't announced how we'll be releasing the SDK. There are a couple of things to be mindful of that is different to the Kinect ecosystem. One is the identity system behind Xbox Live, we don't want anybody to get into your Xbox Live account. So when it comes to SmartGlass and its connectivity we have to be mindful of not just blindly exposing information, whereas Kinect, especially in the PC space, you could enable a driver and if you could write code you could build an experience. So there will be some differences to what we had with Kinect and what we have with SmartGlass but the idea is that the more people we have building for it the better the ecosystem gets. So the heart is in the same place.

I view Xbox as Microsoft's entertainment brand, you see that with Xbox Music, Xbox video, Xbox games, and Xbox becoming almost as much a service as it is a device that you and I would class it as. And we'll continue to talk about it that way and it will show up in things like Xbox SmartGlass on an Android device so it's not tied to one specific piece of hardware. We'd love it for you to have those experience on a Microsoft device because we're in sync with those teams, but we also want to be where the consumers are.

We decided to take an approach of attaching to devices that people already own and turning the TV they already have into a smart TV. If they don't have a device we'd love to sell them a Microsoft device but we want to really take advantage of the investments that people have already made and we think that's a unique value proposition in the market place today and a position that we can play because we have Xbox Live. If we have a foothold in that screen on the wall that nobody else has, the TV in the house still plays a special role, it's a community screen. I have teenage daughters and when we watch TV their heads are down watching their smartphone screens. We saw that dynamic and said "let's take advantage of that".

In the US the upgrade rate on a TV is once in every seven years so getting to critical mass takes a long time. Upgrade rates on phones is 14 months. Tablets will be a little bit longer but not as long as a PC. I think there is an opportunity in the device space for us with Microsoft devices to get a foothold faster than we would if we said we wanted to replace Samsung TVs with something else.