Developing games is already an absolutely complicated, challenging process for people, and thinking in new ways, and having to develop new technological solutions -- things like face recognition, voice recognition, word recognition, all of that potential that Natal opens up -- how do you support developers with that?

PS: (laughs) The way I would challenge you back is to say that the game developers have wanted to know what you're saying for years; they just had no way of doing that. We introduced the Xbox Live headset, and certain games made use of that; but even that, for a kind of room environment, people said that's not quite smooth enough.

When you add technology -- I'm going to use Live because for us it's probably the best case study. Do Live racing games make sense? Well, not all racing games were Live-enabled when Live came out. Now, if you talked about a racing game that didn't support multiplayer online, that's half the game.

I think you'll see this as an additive part of both the creative and game experience in a way that will change what you expect from the games that you buy just like Live does today. If a first person shooter doesn't have capture the flag, it's not a full game. I think the addition of Live technology didn't make the process more complicated; it actually allowed the community to create content on their own just from the interactions that they have.

I think that's debatable; it depends on the case. When you look at games that are shipping a separate executable by a separate developer to support robust multiplayer, that's certainly a complication.

PS: It's a production complication, but when you think about the interaction that gamers have online and the content that we have to create either on disc or through download prior to them shipping, people can augment the experience through the friends that they create and the stories that they get to tell: "Hey, remember that time when we were playing Crackdown and we took down Shaolin at the end together in co-op?" That's content that you and I have created; Dave Jones and Realtime Worlds didn't create that. They created the framework to allowed us to do that. I think that that canvas is strong. When you think about Live and you think about Natal and some of the experiences that can come out of that, I'm an optimist.

Moving away from specifically Natal, what's Microsoft's first-party strategy now for software? We've seen it continue from Xbox through Xbox 360, and as time goes on, the strategy continues to evolve. What do you want to see out of first-party software, and how much first-party software do you want to release?

PS: I'm going to start with "how much," because that's not something that I actually goal the organization on. We don't have a number of releases a year as a goal; we don't have a certain revenue target that we have to hit every year because we understand that our job is to highlight the unique experiences on our platform, and my job as head of Worldwide Studios is to make sure that every game that we greenlight and that we put into production and that we finally ship has a reason to exist in our portfolio. When a gamer buys a game, that doesn't mean they're going to love every game that we ship, but at least they can understand why it fits in.

1 vs 100

Why is something like 1 vs 100 an important part of our ecosystem growth? Well, we take tens of thousands of people on gamespeak on one shard and allow them to play a game at one time; we're actually giving away monetary prizes. That's kind of cool! It doesn't mean it's for everybody, but it's that kind of innovation.

We have Joyride coming out this winter, which is going to allow Gold subscribers to play a free racing game and then a microtransaction backend to the game; I'm curious to see how those kinds of new experiences evolve. So for us in first-party let's stay at the forefront of what gaming is about, and also let's push and work with our platform team to make sure that the experiences that we ship are mapped and have impact on how those platforms evolve.

That's why somebody like [creative director] Kudo [Tsunoda] at the beginning of Natal is so important.

Taking him as an experience lead, as the creative director for us on the content side, and partnering him with the hardware group and platform groups, you're going to build the censor. Here's the kind of experiences we want to build; let's make sure there's a nice push and pull. Classic example is Halo 2 and Live; those two things shipped together, and I think each made each other better.