With the release of XNA Game Studio Express just behind them, Gamasutra met with Microsoft Game Studios' corporate vice president Shane Kim, and Microsoft Game Developer Group director of marketing Dave Mitchell in the heat of the 2007 Game Developers Conference.

The first half of this interview is available here. In this concluding installment, Kim and Mitchell discuss their feelings toward Nintendo as competition, Microsoft's strategy of funding game development in Japan, the upcoming episodic Halo content, Peter Jackson, and more.

GS: I heard you mentioned at the Blogger Breakfast that there are some things that Nintendo is doing that feel like areas that you would want to get into. Can you be more specific about that?

SK: I can't remember exactly what the question was and how I responded, but in general, I applaud Nintendo for their success. I think what they're doing is very important. They're trying to bring more people into the industry and -- objectively speaking -- I think it's Nintendo and Microsoft that are really generating the excitement for the industry. And that's important for the industry.

The fact that Nintendo and Wii have launched strong and that people who are not traditional gamers find excitement in the video game industry is a great thing for the business, and for us as well, since we're going to compete for that customer segment as well.

I don't view Nintendo as a direct competitor, simply because they're not trying to do the same things as we are on the higher end -- they don't have the same online aspirations as we do -- but Sony and Microsoft really need to compete for that customer segment if we want to get to the mass market and win this generation. Nintendo's certainly done a lot of great things. That's more what I think of as what we need to do a better job of as we go after that.

GS: Do you think that XNA Game Studio Express is a step toward doing that?

SK: Absolutely. Xbox Live Arcade, Game Studio Express, the content that we're building from Rare, the content from third parties -- at the end of the day, this business is about great content. If you don't have the content that inspires and excites customers, it doesn't matter what kind of services you put into Xbox Live, and it doesn't matter if you can actually execute PlayStation 3's Home. It's about content, and we've seen that on the platform that we've built on Xbox Live when Halo 2 released. That's when we saw the big jump in membership. When Gears of War launched, we saw another big jump. It is about content, and Game Studio Express has had over a quarter million downloads since it launched in December. We know there are going to be great ideas coming.

Dave Mitchell (via 4gamer.net)

DM: In no other platform is the gaming consumer going to have as much choice as on the Xbox 360. From the great triple-A content to the 320 games that Shane talked about, all the way down to what we talked about earlier with the "YouTube for games" -- where the consumer is going to have absolute breadth and variety of choices -- are just going to be astonishing. And that's what we're really focused on enabling with Game Studio Express, and very much complements what Shane is talking about.

GS: Speaking of Home, Microsoft is the last to anthropomorphize its interface. Is that something that you have any desire to do?

DM: We don't let the competition dictate what we are going to do from a strategy standpoint. I think we've been really clear about that. What Sony talked about yesterday is a big, ambitious vision, which is not too dissimilar to other big industry visions they've promised in the past.

The interesting thing that they've talked about there is that it's all about software. When you talk about trying to bring together YouTube, MySpace, The Sims, and Second Life, that's a massive undertaking.

It's interesting that they use the "home" metaphor, because if you want to build a home, you need a strong foundation. I don't see that today. Certainly I see that with what we've developed over the last five years with Xbox Live and the infrastructures we've put in place there, we feel really good about what we've done in terms of services that we've brought to consumers.

I don't feel any greater pressure today than I did two days ago to anthropomorphize the interface, and it's unclear whether or not that's what most customers want. Like I said, with six million members on Xbox Live, mounting that over Windows, we think we've got a lot to offer with the services and the interests we've got from that.

GS: Are you still helping fund games in Japan?

SK: Yes.

GS: Are the results of that going as well as you've expected? They seem to be doing better in the U.S. -- games that are funded in Japan seem to do better here than they do there.

SK: I think we're very realistic about our prospects in Japan. When we launched Xbox 360 there, we didn't say we're going to win Japan. We said we need to do better in Japan, and for a couple of reasons. One, it's a big market. Two, we know that in order to do more there, we've got to develop more great Japanese content from Japanese developers, and that's why the partnership with Sakaguchi is so important.

It's also important to do well there because there are great Japanese creators and developers. I think developers and publishers in Japan are looking at the success the Xbox 360 is having in the West with titles that came from Japan like Dead Rising and Lost Planet, and realizing that it's an important business opportunity for them.

That all feeds on itself, and I think that while our expectations in Japan are still very realistic -- Blue Dragon was a big success for us, and I think Lost Odyssey will be an important success -- those titles will also do well in the West.

Lost Odyssey