Microsoft: "We're doing things that can't be done on any other console"

Kudo Tsunoda on besting Sony at software, uniting PC and console, and the many facets of Microsoft's vision of the future

The validity of framing the console market as a 'race' or a 'war' is open to question, but there's no doubt that it's a lot more fun when you do. The notion that there is a hard, immovable line between winning and losing simply doesn't make much sense from a business perspective, but it makes for lively debate and - from an entirely selfish perspective - good copy.

For the first six months of this console generation that was certainly the case: the Xbox One tripping, stumbling and backtracking, with the PlayStation 4 marketing department lying in wait, pointed comments at the ready. Microsoft is dealing with the fallout from that disastrous period even now, its own reluctance to disclose hardware sales figures compounded by Sony's eagerness to provide an update at every opportunity. At the last count, in July, the PlayStation 4 had sold more than 25 million units. The Xbox One, on the other hand, has sold.... well, we haven't been given an official worldwide figure in 2015 so far.

"There's a reason we're able to put on two shows of content together. We've got seven exclusives coming this holiday. We're giving people a lot more"

In terms of sales, then, it's very clear which console is 'winning' the generation, and it has been from the very first day. In terms of content, though, the debate is more nuanced, the outcome far less certain. Sony's development resources have long been regarded as a unique strength when compared to Microsoft, effectively guaranteeing a superior crop of exclusive games regardless of how well the PlayStation hardware is selling. Whether that's still true in terms of first-party studios is almost besides the point, because in terms of available, exclusive games there's a strong argument that the Xbox has been a more attractive platform since the launch of Titanfall more than a year ago. By the end of this year, that point may well be beyond debate.

"I wouldn't even say the gap has closed," says Kudo Tsunoda, one of the leading executives in the Xbox games business. "We've got a lot more exclusive games than any other platform."

Tsunoda and the various studios he oversees are celebrating the second Xbox showcase in less than two months. The first, at E3, is generally regarded as a key battleground within the console war, and a significant proportion of those who watched this year believed that Microsoft emerged victorious despite an impressive showing from Sony. The second, at Gamescom, was an Xbox victory by default, with Sony electing to steer clear of the event for the first time in years. Even so, Microsoft presided over 90 minutes of new games, not all of which were exclusive to the Xbox One, but none of which were on show at E3. Whether those exclusives came from first-party studios (Halo and Gears of War) or via chequebook-and-pen (Tomb Raider and Quantum Break) is largely irrelevant. For perhaps the first time in this console generation Xbox owners have an undeniable right to feel smug.

"There's a reason we're able to put on two shows of content together," Tsunoda continues. "We've got seven exclusives coming this holiday, and then everything coming in 2016. Not just the blockbusters, but the ID@Xbox games, the indie games. We're giving people a lot more."

Microsoft's early mistakes have been formative for the Xbox One, its underlying strategy switching from closed and controlled to open and inclusive. Sony recorded several huge PR victories by simply responding to those initial bad choices, but Microsoft has since proved more committed to the stance that Sony initially claimed as its own. An early indicator was Sony's refusal to allow EA Access onto the PlayStation Network due to stated concerns that it didn't offer "good value" to the consumer, but just as likely down to competition with its own planned streaming service, PlayStation Now. Microsoft allowed its customers to make that choice for themselves. Had you been asked to guess the stance each company would adopt even a few months before, it's likely those roles would have been reversed.

"I wouldn't even say the gap has closed. We've got a lot more exclusive games than any other platform"

Tsunoda repeats the idea that MIcrosoft is 'listening to the fans' throughout our interview, making it quite clear that it's a message the company wants us to hear. However, while it would be naive to believe that any multinational corporation is motivated principally by altruism, the strategy for Xbox One is increasingly guided by consumer demand.

Two incoming services perfectly illustrate the degree to which Microsoft has pivoted since the days of mandatory online checks and a prohibition on used games. Xbox Preview is a more tightly controlled version of Steam Early Access, and just the sort of concept that walled gardens were formed to exclude. Backwards compatibility, meanwhile, demands little in the way of explanation. Equally, its importance cannot be overstated, to the consumers who spend so much on games every console generation, and to those who believe that companies like Microsoft should be treating their creative heritage with more respect.

"With backwards compatibility, it isn't something that we just think gamers might want," Tsunoda says. "We know. We're looking for and soliciting that feedback. It was the number one most requested feature for Xbox One by far."

Sony has no plans to match Microsoft in this respect, and the possibility of monetising those games through PlayStation Now makes it very unlikely that it ever will. For Microsoft, it's part of a broader view of gaming with Windows 10 at its core, which should, in theory, unite the previously disparate tendrils of Microsoft's sprawling organisation. PC and console, past and present, existing in harmony, each interacting with and complementing the other. Cross-Buy, Cross-Play, console to PC streaming; one might say that Microsoft should have been doing this for years already. According to Tsunoda, this is a first step.

"For a long time we've had PC gamers and console gamers who weren't really able to play together," Tsunoda says. "That's why Cross-Play is still such a powerful idea. You should be able to play what you love, and play together, regardless of what device you're playing on. It's about connecting people.

"With backwards compatibility, it isn't something that we just think gamers might want. We know"

"It's a really unique value that only we can offer. You still need very gamer-focused values, but there's lots of things you can do with our technology. We've really got a lot more going on [than our competitors]. We're doing things that can't be done on any other console.

"Letting people play games wherever they want, on whatever device they choose, and making that easy. Long term, that's really what we're trying to do as a platform."

If Microsoft is pushing towards a more holistic approach to its games business, then a few reminders of its clumsier past still remain. One is perched just below the television directly to our left: Kinect, a device once positioned as an integral part of the future of Xbox, a future that Tsunoda was instrumental in selling to the press and public. These days, though, it feels additive, and that's being kind. In more than 150 minutes of press conferences across E3 and Gamescom Kinect barely merited a single mention, while a new announcement, the Chatpad, offered a core-friendly alternative to the search and chat functions that represent a huge chunk of why anyone might still use it.

"I don't think it's an alternative [to Kinect]. It's just about giving people a choice in how they can do things," Tsunoda replies. "There's still a lot of great voice capabilities that you can use with Kinect, but there's also a lot of great possibilities for communication with the Chatpad. You can also customise a lot, with specific buttons for specific functions. With everything we do, we're trying to give people the choice."

In terms of games, though, Tsunoda offers only Just Dance 2016 as a specific example - which is developed and published by Ubisoft - accompanied by the vague promise that, "There's still Kinect games coming as well." This may be what 'choice' starts to look like when Microsoft loses faith in one of its possible futures. It should be noted that Kinect is now listed under the "More" section on the Xbox One Accessories page, beneath "Controllers," beneath "Headsets and Communication," grouped in the same vague category as the Xbox One Digital TV Tuner and the Xbox One Media Remote.

"You should think about HoloLens in the same way that you would a phone or your computer. It does a lot of things”

The fear of obsolescence created by the doldrum in which Kinect now resides also haunts the HoloLens, another promising device that Microsoft has just finished thrusting into the public eye. It stole the show at E3 with an immaculately orchestrated Minecraft demo, only for its limited field-of-view to be scrutinised by the press, and its early utility as gaming hardware to be questioned by none other than the CEO of Microsoft, Satya Nadella.

For Tsunoda, who is also closely involved with the development of HoloLens, the difference between watching a demonstration and actually experiencing it first-hand is more pronounced than any product he's ever worked on - including Kinect. However, there is more common ground between the two devices than one might think.

"You should think about it in the same way that you would a phone or your computer. It does a lot of things," Tsunoda says. "Obviously, gaming is a big part of what you do on those machines as well. But that's what it is: an untethered holographic computer. You can do a lot in the gaming and entertainment space, but it has a lot of other functionality as well.

"Microsoft is a leader in depth-sensing technology: with Kinect, but also the stuff we're doing with HoloLens as well. A big part of what we're doing there is an environmental understanding that comes from having pushed our knowledge in depth-sensing. That's what you'll see us do as a company. [Kinect] is still a part of the platform, and there's still Kinect games coming of course, but then also we're pushing that depth-sensing technology forward with what we're doing with HoloLens."

It's all a part of Microsoft's future of gaming, whatever that turns out to be. Right now, though, Xbox might finally have emerged from PlayStation's shadow.

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Latest comments (12)

Robin Clarke Producer, AppyNation Ltd6 years ago
I clicked on the headline expecting to read what these "things that can't be done on any other console" were, but then I saw Kudo Tsunoda's name so wasn't surprised that the interview doesn't elaborate on this at all.

The trade press seems very eager to push the idea of an Xbox One bounceback at the moment. It's a good PR story, but requires rather a lot of handwaving.

The hardware's still underpowered, sales are still lagging and the parity clause is still in effect. The 2015 slate is indeed very full, but some of the supposed 'tentpole' releases are a bit dubious. I don't think Tomb Raider is quite the top tier action franchise that it's being painted as in a world where games like MGS and Uncharted exist.

At least they finally killed Kinect though.
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Klaus Preisinger Freelance Writing 6 years ago
Scraping the bottom of the arguments barrel.

Unless you can connect a mouse and a keyboard and play the games that actually matter on the PC, offering cross-anything is utterly meaningless. There is no Microsoft gaming offer worth mentioning on Windows 10. There is only Steam, and Humble, and GoG and Origin, and Battlenet, and Uplay.
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Jordan Lund Columnist 6 years ago
The problem isn't the number of the exclusives, it's the quality of the exclusives. So far, neither system has offered an exclusive that sells the system. The best so far is arguably Infamous, Second Son. But even that is just a high B-grade title.

What has been driving this generation has been the performance of 3rd party titles being better on the PS4 and it doesn't look like that's going to change.

This, BTW, is the same thing that drove the 360 over the PS3. Things like Oblivion were late and buggy on the PS3.

That seems to be the primary lesson Sony learned from last gen. Better 3rd party performance + paid exclusive windows > actual exclusive titles.

Microsoft could change that narrative if Halo 5 and Gears turn inti must own games, but so far the XBO exclusives have not been compelling (Dead Rising 3, Ryse, Sunset Overdrive).
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Jeff Kleist Writer, Marketing, Licensing 6 years ago
There was never a prohibition on used games, and Sony had a total lockout on them until hours before their press conference. The system was designed to give resale value to digital content, and prevent GameStop from jacking developers by buying back barely used copies instead of new ones. This requires a check to keep you from selling a game and pulling the net connection on the console to prevent deauthorization.

Quantum Break is not a product like Tomb Raider, or even Titanfall. It was commissioned, not bought into late in development.

While commercial Kinect games at retail are all but dead, anyone who watched the new dashboard unveil can see what was always the true point of Kinect inclusion with the system.

Kinect as a commercial product is very successful. Comcast and Samsung license it for their TVs and cable for gesture and voice control, and it's being used all over the place in medical and other fields as a very affordable versatile sensor. And HoloLens as well is a commercial product with later consumer applications. It's for CAD before Call of Duty, the same reason Facebook bought oculus.


No one in the real world cares about 900p. In fact, I guarantee you if I set up a double blind test under typical consumer viewing conditions, you wouldn't notice the difference. In fact, most consumers sit so far from their TV 720p is the max they can actually see.

Tsunoda is talking about the direct windows integration, and of course their cloud tech which is way beyond anything Sony has. He was very specific. Kinect isn't dead at all, I just expect a new audio only version, likely integrated into a wireless headset and futur compatibility with standard Microsoft webcams.

The parity clause is not in effect, and never was what fanboys and Sony's PR people made it out to be. Indy games have a half life measured in weeks for 90+% of titles. Why should Microsoft offer tens of thousands of dollars in free hardware, software, and tech support to people who will make them pennies launching months later on their platform? So you had to give them a reason it was worth waiting. This is a good thing. Of course, launching simultaneously non both platforms, since most of these games could run fine on 360 should be very easy give that the PS4 is virtually identical hardwaere, and one thing MS can do to help developers is get rid of the stupid help system requirement. Absolutely no one uses it except by accident, and the translations for it get expensive.

@Klaus Keyboard and mouse support is coming next year,, and things like real achievements are already there. It's not about buying games, it's about the things around them (EDIT: watch the video of the new Xbox on Win10 update just released. It integrates your steam and other games into you library). You won't be able to cross buy, or cross play console and Steam. It's a long game, just like Bing, which for some reason has gotten a lot of traction, God knows why, but with Win10 it's probably going to explode even further just by virtue of being there.

If I were Microsoft, I would honor all existing Steam codes on their store. Just like Origin sucked in all my EA games. Why would any person who cares about achievements not want to earn ones that build your e-penis instead of meaningless ones on other services? Or like me, one or three horror story visits to Steam's non-existent customer service will leave you looking anywhere else.

Edited 1 times. Last edit by Jeff Kleist on 18th August 2015 6:15pm

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Pete Thompson Editor 6 years ago
Well I started reading with interest as I was hopeful this would be the first Xbox related article that didn't turn into yet another PS marketing article, but I was let down!

Oh well, back to ignoring GI.Biz daily emails..
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Andrew Jakobs Lead Programmer 6 years ago
Technically it is possible on the PS4 as it's almost the same hardware as the xbox one.. hehe..
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Anastasios Hatzis Community Manager 6 years ago
Jeff Kleist, I'm not sure why you bring up this urban "used games" legend.

Hint: February 21, 2013, a few hours after Sony revealed the PS4, a few months before Microsoft revealed the One, months before the press conferences.

In contrast, Microsoft reverted prohibition on used games after the press conference. If there was no prohibition, why would it be a "change" (quote) in policy? Hint: the second bullet point, bold:

Edited 1 times. Last edit by Anastasios Hatzis on 18th August 2015 9:16pm

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Paul Jace Merchandiser 6 years ago
We've really got a lot more going on [than our competitors]. We're doing things that can't be done on any other console.
Microsoft has been hitting all the right notes this year(a big difference from what they had planned for Xbox One in early 2013) and with key victories at both this year's E3 and Gamescon shows they've proved that it really is all about the games this year.....and assorted new hardware features as a bonus. There's no argument from me which system has the better games this year but even just focusing on the XBO there's a good amount of variety there.

As for doing things that can't be done on other consoles, there's one specific announcement I'm waiting on and they said they are already looking into it. That doesn't mean it will ever come to fruition but I look forward to the day when you can stream any Windows 10 games to the Xbox One in the same way you can now stream all Xbox One games to a Windows 10 PC. That would actually make me go out and buy some PC games for the first time ever,
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Alan Blighe Research Associate 6 years ago
Do you think Bloodborne is a system seller? It was for me, but perhaps not more generally. I agree with your general point though - there's little in the way of exclusives to drive sales one way or the other.
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Jeff Kleist Writer, Marketing, Licensing 6 years ago

It's not an urban legend. I knew about it long before hand on both the Microsoft and a Sony sides. You can see the Sony RFID system in a patent filed about a month before.

There was no prohibition. There was already deals in place with GameStop and Best Buy, and WalMart was being done back then in January to tie their register systems into Live to facilitate automatic license transfers online retailers would have been next, and by launch, consumer to consumer.

One of the number one bullet points after the usual "more power, more memory" requests was a way to stop GameStop. Microsoft went this way, seeing the opportunity to dip their beak in every transfer of games. But so would every developer. Sony on the other hand used a very Japanese design, obviously generated by talking in Japanese developers. They have been trying to stop used games for years, even going so far as a nearly successful attempt to use the lobbying power of all the game companies in Isaka at the time to get them banned entirely, as they had succeeded nationwide with game rentals (wonder why the prices are so high on PSNOW for Japanese titles?). Since Japanese retail is in no way equipped for this kind of system, they went for a physical system that burns an ID chip embedded in the disc after a single use that gets assigned to a single user and system.

It would have taken Sony a good minimum eighteen months to develop something similar. So thry pulled it, because it was just going to hurt them. Then they pulled out Microsoft's old HD DVD playbook, ripped out the nastiest bits, and decided payback's a bitch.

Again, Microsoft had no prohibition on used games, and Sony removed theirs. Microsoft stupidly didn't go to their partners to get permits scion to talk about it, because the suits running the show were all from the Enterprise side that have zero experience dealing with knee jerk, reactionary fanboys. Sony on the other hand, in desperation continued listening to their U.S. agents to great success. Had Microsoft explained the whole thing, upfront, then only the tin foil hatters would have been left. The ability to resell digital content is a major court case waiting to happen all over the world, and they would have been at the front of it. Steam leeches from nearly every PC transaction. Apple gets a piece of 60% or more of digital movies and music. What better way to attract people to your service? There's a hard wall of about 60% of the general public that will not spend more than a movie ticket on digital content. If they're confident that their $60 represents a tangible and recoup able investment, they're far more likely to change that attitude.
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John Bye Lead Designer, Freejam6 years ago
Jeff - "The system was designed to give resale value to digital content, and prevent GameStop from jacking developers by buying back barely used copies instead of new ones"
Actually it probably would have given big retailers like Gamestop a monopoly on used game sales, while cutting out smaller stores and stopping players from selling their own games direct on eBay. See here - "We designed Xbox One so game publishers can enable you to trade in your games at participating retailers" (my emphasis).
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Jeff Kleist Writer, Marketing, Licensing 6 years ago

The first places to see the system rolled out is the large retailers, yes. They made the statement because the deals were signed with them

eBay and Amazon both were in the pipeline. The fees would have been included in your auction fee. And direct consumer to consumer was also there (see the family share mechanism currently on hiatus).

The majors would have had the system integrated into their POS, but nothing would stop mom and pop from setting up a reseller account, though that would definately be implemented behind the majors.

Microsoft didn't just want this for games, they want to do it for every kind of digital media. Understand, the people doing the speaking are used to talking to theoretical adults with an understanding of the business. They're not used to having every word parsed for ulterior motives, real or imaginary. And yes, it was bloody stupid, but how much time has been spent undoing dumbass design choices made by people who make desktop OSes? They got a list of bulletpoint features, and didn't look at what people liked on 360

A huge number of people who made X360 a success got hired away by Amazon. Echo is made by many of the Kinect team, and mysteriously has no cries of how evil it is around it. As is typical in American business, an MBA is considered as valuable as fifteen years in the field.
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