Return to Part One

Taking it up a notch: The Xbox 360 Dashboard

Jeff: The other scenarios I want to show you, some of the stuff that begins to go a little bit broader than just the quick messaging and the invitations and the Friends list functionality, is software that we've built that is powerful enough that it requires all of the resources of the Xbox 360. That's all three of the CPUs, all six of the hardware threads, all 500 MHz of the graphics processor, and all 512 MB of system RAM. With the Guide, we're just sharing resources with the game. The game continues running and gets 99.6 percent of the resources, and we take 0.4 percent.

For some of the experiences, we actually want to leave the game altogether and go to what we call the Xbox Dashboard. You've seen an earlier version of the Dashboard on Xbox 1; it's that green wire frame thing, the kind of spooky looking thing. We have completely redone that for Xbox 360. Unlike Xbox 1, where you have to get up and eject the disc to get into the Dashboard, which is a pain, anytime you have the Xbox Guide up in Xbox 360 you can now press X and it will take you out of the game and drop you right into the Xbox 360 Dashboard. And you can get right back into the game, if you want, without having to get up once again and reinsert the disc. You can even power up and down the console with your wireless controller.

[Examining the Dashboard, which is a full screen experience, I am struck by how clean and high resolution it looks.]

Paul: This has some of the features from the Guide...

Jeff: This has all of the features from the Guide, plus some of the stuff from the Xbox 1 Dashboard, plus a whole bunch of brand new Xbox 360 stuff as well.

Paul: So this is like a million times better than the Xbox 1 Dashboard.

Jeff: Oh my God. That's music to my ears. Thank you, Paul. We put a lot of work into really polishing this. We worked really, really hard to make this look really fantastic.

The Xbox Dashboard is organized into what we call Blades. The Blades are these curved surfaces, like the Ring of Light we talked about earlier. The Blades are also one of those common design elements. You can see that sides of the [Xbox 360] console are just a little bit concave, similar to the Blades and to the inverse of the edges of the controller.

Some of these Blades have some of the information the Guide on them. And in fact, you can actually bring the Guide up on top of the Dashboard by pressing that Xbox 360 button. Like I said, any time you press that button, that Guide appears. This set of Community links is identical to what we saw in the Guide and I can go and access them through the Dashboard in exactly the same way.

[In each Blade, the upper left item is typically highlighted by default. However, if you highlight a different item, then move to a different Blade, and then come back, that item will remain highlighted.]

There's no place like Home Blade

Jeff: The first place that we start out is called the Home Blade. The Home Blade is for both online and offline gamers. It's kind of a thumbnail, top-level view of all the gaming related information that matters to you. If you're an offline gamer, it's going to have a list of the last games that you played and potentially some high score information. You can have an Xbox profile whether your online or offline, so in this case you can see your own profile right here on the Home Blade. We give you quick, one-button access to downloadable content that matches up to the games you've been playing recently. For Xbox Live players, we'll give you a personalized calendar of events listing things that are coming up on the Xbox Live service. And you've got those Community links which, like you noticed, are exactly the same that you see in the Guide.

A day in the Marketplace

Jeff: One of the biggest innovations here [in the Dashboard] is what we call the Xbox 360 Marketplace. Let's drill into it a little bit because this is the stuff that I probably get the most excited about. Think of the Xbox 360 Marketplace as your one-stop-shop for all of your downloadable content, both for games and for other forms of digital entertainment.

It's not just games, but obviously games are at the heart of it. The first thing you're going to see is a list of new downloads for the games that people are playing right at launch. This is also the place that you'll be able to come and adjust your Xbox Live membership. You'll be able to download fully playable game demos and even standard and high definition video footage of game play. That will help people figure out what their next game purchase is going to be without having to go over to a PC in another room in the house to do that research. This is also the place where people will download skins and themes for the software, in order to personalize it like we talked about.

Rethinking Xbox Live

Jeff: We had an incredibly fast ramp-up for Xbox Live adoption. We went from 0 to one million subscribers faster than any paid online service in history. We ramped to one million faster than AOL, faster than HBO, faster than any other paid online service in history. We're creeping up very quickly on two million right now.

But we recognize that ... I hate to say we have a fundamental flaw ... but we have a fundamental flaw in the service today. And that flaw is, in order for us to give users access to anything on Xbox Live, they have to [first] pay a subscription fee. And that subscription is mostly targeted at hard-core, online gamers. Halo 2 guys like you. If there are people that never want to go head-to-head, that never want to shoot, or do battle, or play sports games with other people online, they can't do anything on Xbox Live today. There are tens of millions of people who play single player platform games today who would love to have a new level. Many of them would even be happy to be able to buy a new level for those games. But in order to get access to the catalog of content, they have to pay the hard-core gamer subscription fee. For them, it's not just about buying a $5 level; it's about buying a $55 subscription, plus the level. And that's a huge barrier for people.

"We have a fundamental flaw in Xbox Live today. In order for us to give users access to anything on Xbox Live, they have to [first] pay a subscription fee. And that subscription is mostly targeted at hard-core, online gamers. If there are people that never want to go head-to-head, that never want to shoot, or do battle, or play sports games with other people online, they can't do anything on Xbox Live today. There are tens of millions of people who play single player platform games today who would love to have a new level."

-- Jeff Henshaw

We've fixed that with Xbox 360 by introducing what we call the Xbox Live Silver membership. It's free. If you can get broadband to your box--wired or wirelessly--you can do everything I've showed you so far. You can create an online profile, start accruing some credibility through the games that you play, send and receive messages with your friends online, and come here to the Marketplace and browse, sample, try, download, and buy content. All without having to pay a subscription fee.

The only time you have to pay an annual or monthly subscription fee is when you actually want to engage in head-to-head multiplayer play. That way, the hard core people that want to compete get the ability to do that without scaring off the tens of millions of people who just want to want to go up and buy a new level. We think that this change is going to rocket us past the one to two million type of market and get us up into the 10 million to 20 million market, where we actually have a serious percentage of all the console owners participating.

[Every month, I play Halo 2 multiplayer with a group of guys up the street, which I documented in a Connected Home Express article a few months ago. For the past few months, Xbox Live subscribers like myself had been able to download new free and paid maps for Halo 2, but most of the people I play Halo 2 with are not on Live, so they can't take advantage of this service. We discuss this for a bit, and my experience here perfectly proves his point about the limits of today's Xbox Live subscription offering.]

Paul: You're not requiring people to be part of this Silver membership, right, this is still optional?

Jeff: It's still optional. If people want to go online, they'll need to be Silver members, but it's free. We don't collect your credit card number or billing address, or any of that tedious typing that people have to do today. That's just all gone.

So let's go look at what it will be like to download a game here in the Marketplace. Xbox 360 is smart enough to realize that in a world where we want tens or even hundreds of thousands of pieces of content coming down, it's actually going to go and look for the content that's related to the games you've been playing lately first, and bubble those up to the top. That will make it as quick [and relevant] as possible.

Micropayments and microtransactions

Jeff: We're also going to have some free games for people to check out on the service, and get them used to downloading content and trying things out. Checkers is a good example of that, and I can click on "Checkers" and it's free. You'll notice that the Xbox Guide pops up because that's what handles all the billing infrastructure. You'll notice that you already have a balance on your account. That's because Xbox Live with 360 supports micropayments and microtransactions. So you can stuff an account balance onto your account and then spend it a little at a time.

[The account balance onscreen reads 11,000.]

Paul: So what is that? You've got 11,000 ... what?

Jeff: These will be called points. You will buy a balance of points. A parent might buy a child $20 worth of points, and that might be worth 20,000 points. And then you can go spend those a few at a time. That gives game developers the ability to produce really small pieces of content, like a paint job for a car or a new potion for a game, rather than have to do a full level. Now they have the granularity of billing and can charge a very small amount.

This [Checkers] is actually a free game, so I don't have to worry about it deducting my balance. I can just click Download and because this is a broadband account, it downloads that version of Checkers to my system quickly. As soon as it's done with that, it takes me over to my Games Blade. This is the place where I can go and access all of my game content. I can look at the saved games I've got on my system, I can launch the downloaded games I've purchased, and I can launch the casual games that are part of Xbox Live Arcade, which is now built-in to Xbox 360, and not a separate disc that you have to put in the system. And I can watch those game demos and trailers. Some demos and trailers will be free. Some will be fee-based, you will see both. My guess is that 80 percent of them will be free. But I can definitely see a case or two where a game publisher might want to release a first level of a game--fully playable, not time-bombed in any way--for a fee. Maybe $5. And then if you want the other 50 levels, you have to pay $50 for the whole game.

Paul: Do you think companies will actually make major games available for download?

Jeff: We're already testing the waters with that with Xbox Live Arcade, where it's mostly mini-games but they're fully downloadable and playable in place [without a disc]. Those range from a couple dozen KB to a couple of MB of RAM each. There's one that is 40 MB or so. So there are some pretty decent-sized games. But an Xbox 360 game is 9 GB. I do think in some regions you might see fully downloadable games. It will depend a lot on the broadband offerings. In the US, frankly, our broadband is not well-tuned to support this kind of thing. In Japan, where you have a megabit down, it's more likely we'll see huge downloads there. I think we'll see some game developers go and really innovate with episodic content where you can download a level at a time and maybe they release a new level every few days or every few weeks, and it's a gradual game that you play over time, and you can kind of pay as you go.

Game updates and service packs

Paul: You don't see this a lot with console games these days, but one thing you can do with this is actually update games, fix bugs.

Jeff: You know, that's true even on Xbox Live today. But it's dangerous water. And I'm going to give you two answers here. Today, Xbox Live definitely gives us the opportunity to keep the gaming environment safe and secure. So if an online game goes out and there's a serious cheating threat, or there's a serious security threat, Xbox Live is a great tool and a closed environment where we can fix that. That's the obvious stuff. The second part of it is that Xbox Live and the ability to download new content is not a crutch to ship crappy software. And too often on the PC--I'm going to be blunt here--in the PC gaming space, games get out that developers know have problems because they know they can patch them later. They know they can force updates. And the act of playing [games online] becomes a pain in the ass, because you put the disc in and then you gotta download the patch and you gotta download the service pack and you gotta download the security hot fix, and then you gotta apply those things and reboot your machine. That's not an entertainment experience. That is not fun. That is not "pick up the controller and play."

I feel very strongly about this. One of the things that we're hard core about with Xbox on our customers' behalf is that Xbox 360, like the original Xbox, is a pick up the controller, pop in the disc, and play kind of system. Always. That is the experience you can count on. It's fun, it's easy to get into and it's consistent.

So if there are updates, they're usually done quickly and silently. And we are much, much more cooperative with our game developers about making sure those kinds of problems are fixed up front such that hot fixes and service packs and other maintenance are kept to an absolute minimum. It does happen. It happens on Xbox 1. We've done many security implementations for games on Xbox 1. Most people don't know about it because they're fast and silent. When was the last time you hot-fixed Halo?

"Xbox Live and the ability to download new content is not a crutch to ship crappy software. And too often on the PC--I'm going to be blunt here--in the PC gaming space, games get out that developers know have problems because they know they can patch them later. They know they can force updates. And the act of playing [games online] becomes a pain in the ass, because you put the disc in and then you gotta download the patch and you gotta download the service pack and you gotta download the security hot fix, and then you gotta apply those things and reboot your machine. That's not an entertainment experience. That is not fun."

-- Jeff Henshaw

Paul: I've never hot-fixed Halo.

Jeff: Yes you have.

[Laughter]

Jeff: This is my point. You've never felt any pain around it. We never want users to feel pain.

Paul: You should talk to the Windows guys about this some time.

Jeff: Actually, that's one of the really cool things that's going on at Microsoft right now. The amount of technology sharing and the amount of insight and context sharing that's going on right now between groups is reaching ... I've been hear for 15 years. I think it's reaching a new high, which is really cool.

Connected digital entertainment experiences in the Media Blade

Jeff: Before I launch Checkers, there's one other key area of this Dashboard I'd like to show you. That's the Media Blade. I know that's some of the stuff that really excites you.

The Media Blade is one of those places you go for the out-of-game digital experiences we talked about. The key thing that I think the Media Blade is going to help Xbox 360 accomplish is to really get out there and speak to a broader audience. And I'm going to include myself in this audience, and my wife and kids. We're not hard core gamers. We do love to play. But my daughter doesn't get to play Halo 2; she's only 5 years old. I don't want her playing Halo 2. In fact, she thinks the Covenant guys are dragons, and she tells me not to hurt the dragons. She thinks they're friendly.

The Media Blade is the place you can go to experience connected digital entertainment experiences without any of that hard core competitive stuff. Obviously, we've got great support for music and photos here. Music can be ripped directly from a CD to the Xbox 360, but that's actually not the optimal scenario. The optimal scenario is when you've already got your library of music ripped to your PC. Or, you're a digital photographer and you've already got a photo library built up on your PC.

On any Windows XP PC, on a home network with Xbox 360, the 360 will connect to that XP PC and stream, wired or wirelessly, all of that music and all of those photos over to the console.

Paul: What do you have to do on the XP PC to make that work? Is this Windows Media Connect?

Jeff: Yes. And you've already got it if you've got Automatic Updates enabled. Windows Media Connect exposes the music and photos from that PC. Xbox 360 is a Windows Media Connect client.

If you have a Media Center PC, that takes it to an entirely new level, because you're remoting that entire Media Center experience--the enhanced music, the enhanced photos, the live and digitally recorded television--to the 360. But the cool thing is, when you're experiencing that through Xbox 360, from Media Center, or from an XP PC, you're connected to the gaming crowd, your list of friends. You can send and receive invites and bring up those messages, and bring up the Xbox Live Marketplace. You still have access to all of that stuff.

Taking it to your friends

Jeff: Where things get even cooler is--where Xbox Live really revolutionized gaming on the console by taking it online with your friends--Xbox 360 is going to revolutionize music and pictures by making those experiences shared with friends too. With Xbox 360, you'll be able to share your music playlists, and actually broadcast your music out to your buddies who are online with Xbox Live. Or, you can share digital photo slideshows with friends on Xbox Live.

[Jeff moves over to the Xbox 1 unit in the corner of the room, which has a wired controller and a video camera attached to it.]

I want to show you what that's going to look like right now. This is the part where I get really cranky because I'm tethered to cables. This is something we've mocked up on Xbox 1, and what we've done is, we've taken what will eventually be the Xbox 360 camera and we've mocked it up with an Xbox 1 camera. Paul, I'm going to put you live on camera. And I have got my good buddy Larry, who is [Gamertag] on Xbox Live, and ... Hi, Larry, how are you?

[Larry appears onscreen in a video chat session. He is viewing a Web site on his computer monitor. Onscreen, his video window is in the upper right of the screen, while I can be seen in the lower right window, taking notes.]

Larry: Hey. I was a little busy reading the SuperSite for Windows.

[Laughter]

Jeff: Oh, excellent, excellent. So we've got Paul here and, Paul, this is the version of Checkers we downloaded. [The Checkers game appears onscreen, with the two video windows intact.] And this an example where we can take a shared experience like the game of checkers, which is an easy to play, multiplayer kind of game, and actually get video chat running at the same time as the game. You're going to see this with a lot of card, parlor, and board games, as well as things like shared music and shared photos.

[Larry makes a dominant move and the game audibly trumpets his success, causing some snickers.]

Jeff: That was really nice, Larry, thanks so much. Checkers is a great example because it gives us the ability to have a fun game that provides a lot of network bandwidth for video chat. It's not a network intensive game. And also because it doesn't require a lot of intellectual bandwidth. I can play checkers and chat at the same time. So Larry, we're running behind schedule, so I'm going to go ahead and cut this off. We really appreciate you joining in with us. You've provided a spectacular example of shared experiences on Xbox 360.

[Laughter]

Larry: Bye Jeff, bye Paul.

Jeff: Enjoy the rest of your morning dude, bye.

So you can envision us releasing checkers ... with a shared photo album. Or a shared music playlist. And having the social dynamics around listening to music and looking at photos coupled with real time communications like video chat. We think that it's going to provide an entirely new set of experiences to people on consoles, who might otherwise not have had a reason to buy one.

Paul: Given how much better this is than, say, instant messaging on a PC, have you had any discussions with the MSN folks about maybe working together...

Jeff: We have constant discussions with the MSN guys and our roadmap includes a ton of cross-platform integration. The utopia that Microsoft is striving for is ubiquitous connectivity to anyone anywhere. Any user on any device. It shouldn't matter that you're at your office on your PC and I'm at home on my 360. If we want to talk, we should be able to talk. It's absolutely the direction we're heading in. We want to talk with voice, we want to talk with video, and we want to talk with text. We should be able to do that. You won't see that right away. Initially, it will be Xbox to Xbox. But over the next few years, I wouldn't be surprised if we roll out some other things. Cell phone. Whatever.

Portable device integration

Jeff: Sharing music and sharing photos is cool ... if you have access to music and photos. And if you've got them all on your PC and you've got a home network, that's great. Many people have their photos and music these days. But not everyone has the home network. And that's still a barrier for a lot of people.

[Jeff picks up a Rio Carbon, which is a small portable MP3 player.]

Xbox 360 has fixed that by adding really simple, fast, fun device connectivity to the console platform. It's never existed before on any console. You'll be able to take your digital audio players--like the Rio Carbon I have here or an iRiver, or an iPod, or even a Sony PlayStation Portable (PSP)--put music and photos on it, bring it over to your Xbox 360, navigate over to the Media Blade, connect that device via USB 2.0 to the 360, and stream it all over in real time to the 360. In the Media Blade, we scroll down to portable devices, and it will give me a list of all the music that's on this device.

[Jeff scrolls through the list of artists on the Carbon.]

Do you have a favorite artist that's on this list?

Paul: Do I? Um. Coldplay is fine.

Jeff: OK, pick a song and ... [music begins playing] Yes. This music is actually being streamed from the device in real time, through the Xbox 360, and into my home theater with its HDTV and surround-sound system. And I can do anything with this music that I can do with music I've ripped directly to the Xbox. If I want to share that music with friends, I can do it. If I want to use that music as a custom game soundtrack, like we did earlier, I can do that.

Paul: Now you can play that music and then go back and do other stuff, right?

Jeff: You can start a game while the music is playing, you can start an audio chat while the music is playing...

Paul: It's not happening in isolation.

Jeff: No, it's not.

The other trick I'd like to perform, if you don't mind me snapping a picture of you, and I promise I won't publish this, I can take this picture ... [he snaps a picture of me with a digital camera] and plug the camera directly into the Xbox 360, navigate to the Media Blade, same way, via USB...

[I notice some icons at the top of the Media Blade screen.]

Paul: What do you have there? You have media sources...

Jeff: Media Center PC, a mass storage USB device, a Memory Unit, an iPod or other portable audio player, a digital camera source.

So I go into Pictures, and this will show me my pictures library, locally or on networked PCs. I might have a USB drive with a photo library. In this case, I just click the camera icon. [The pictures on the camera come up onscreen]. I can go through these one by one, or I can view them as a screensaver, or I can share this photo album with friends online. In this case, I'll just view a slideshow. And this actually gives me a high definition view of the photos directly off the camera.

[The photos stream off the camera using Media Center-style transitions between each photo, which is a wonderful effect. I ask about this.]

Yeah, we've got lots of transitions and they're customizable. You can select fades or wipes or whatever. You can also do some effects like black and white or sepia. It's all pretty simple, playback-oriented kind of stuff, but it looks really cool in high-def. [The picture he took of me comes up.] That's a keeper right there. That I will publish.

[Laughter]

That's how easy it's become to get digital photos directly from your camera to your high-def television set. For people that don't have a home network, or just want the pure convenience of being able to just walk up and plug something in, and get it on the TV with surround sound, Xbox 360 is going to make that easier than it's ever been before.

That's the stuff I'm really excited about.

[Jeff suddenly and accidentally drops the Xbox 360 controller onto the concrete floor.]

That's only a $60,000 prototype. I'm sure they'll appreciate me breaking this. [The controller is OK.]

[Laughter]

Assessing the competition

Paul: One thing I wanted to address was that you did your thing at E3 last month, and then Sony kind of trashed you. I was sort of surprised you didn't come out more strongly to defend yourselves. [A Microsoft employee published some benchmarks on his blog showing that the Xbox 360 is more capable than the Sony PlayStation 3.]

Jeff: You know, here's the thing you have to keep in mind. Leading into E3, we had about four weeks of exclusive press coverage. We did the MTV announce, we did a constant stream of press releases, so that it was nothing but Xbox 360 for the four to six weeks leading up to E3. At E3, Sony had all the new news, because they were using E3 as their sole announce. They had a newness, or new buzz, around them and what they were talking about.

They key thing for us with Xbox 360 is that even after the Sony announce, we feel like we've built the right product with the right set of features for customers at the right time. And as we launch, and as we are the exclusive hi-def gaming platform this holiday season, I don't think we need to get into a tit-for-tat with Sony. We've already shown that the hardware is basically a jump ball. Each system has its highs and each system has its lows. They beat us in floating point and we beat them dramatically in integer.

"This holiday, when people are going to unwrap presents under the Christmas tree and they're excited to play hi-def games, there's going to be exactly one console that they're doing that with. Exactly one. And it's Xbox 360, by the millions, not Sony. By the millions, this Christmas, people are going to be playing high-def games. And they're going to be doing it on Xbox 360. Meanwhile, Sony's going to have a bunch of PowerPoint slides and rubber ducks falling into a tub, and people aren't going to care at all."

-- Jeff Henshaw

There are a few areas that we think speak for themselves. Sony's lack of an online strategy continues to be this huge, glaring, bottomless pit, where meanwhile, Halo 2 is redefining how online gaming happens. And we're taking that to the next level with all these shared connected experiences in Xbox 360.

It doesn't make sense to play tit-for-tat with the hardware. We realize that real innovation in the next generation is taking place with software and services. When you have the equivalent of a jump ball on the hardware, software and services are where we take possession of the ball. We've got the software and services. It's what we've spent the last hour talking about. How much did we talk about hardware? We talked about the wireless controller and the camera. But that was about it.

OK, I mentioned the processors and the memory too. But it's all about software and services. And Microsoft is the company that knows how to deliver innovative software and services over time. Sony can continue to do the gadgetry demos, and they can continue to do the science experiments with the rubber ducks falling into the tub. But when it comes to building great games, and delivering great consumer entertainment experiences, it's right here.

So that's my usual answer to the press. The private Jeff answer is that this holiday, Christmas 2005, when people are going to unwrap presents under the Christmas tree and they're excited to play hi-def games, there's going to be exactly one console that they're doing that with. Exactly one. And it's Xbox 360, by the millions, not Sony. By the millions, this Christmas, people are going to be playing high-def games. And they're going to be doing it on Xbox 360. Meanwhile, Sony's going to have a bunch of PowerPoint slides and rubber ducks falling into a tub, and people aren't going to care at all.

Putting it all together

Jeff: This all started with games. We started in a game and really gave some cool enhancements for the hard core, Halo-playing masses. There's stuff in Xbox 360 that's really going to captivate that hard core audience. But we've also built Xbox 360 to be a system that will appeal to a broader audience than I believe any console has ever appealed to. While kids or the hard core males in the house are driving the initial purchase, the services in Xbox 360 will speak to the younger demographics, the older folks in homes, the parents, who aren't necessarily going to be playing the hard core games. There are casual games here, the Xbox Live Marketplace, there's shared music, and shared photos, there's something in here for almost anyone who likes to be entertained in any way.

And across all of those experiences, you'll notice that the hard core, the casual, the demographic broadening, the in-game, the out-of-game, all of these were high definition, connected, and personalized experiences. And those things just come out so loudly in everything that we show and everything that we talk about. Xbox 360 really, really does set the bar for the next generation of game consoles.

So what do you think?

Paul: Eh. It's not bad.

[Laughter]

Jeff: You're thrilled with this, I can tell.

Paul: I can't stand seeing stuff like this because it just ruins the rest of the year for me. My stuff sucks now.

[Laughter]

Jeff: I know the feeling.

Paul: I get the same feeling from this that I got when I first saw Media Center [in January 2002].

Jeff: It just changes everything for you. You expect to be able to pause and rewind TV now. With Xbox 360, I expect all of that stuff, but I also expect you to be able to invite me to play Halo. If I don't have that, something is wrong with my system. If I'm sitting in front of a television, I expect to have access to my Friends list, in the same way that you expect to have IM running on your PC all the time. It just becomes an expected part of the experience.

I also think this video chat stuff is going to be big. My kids are going crazy with it. When I'm at the office, I get 20 video chat invites a day. It's just how they talk to daddy. And frankly, without a way for them to do that in a really friendly way on the on the TV, and without me being able to do that from my office, I feel uncomfortably disconnected from my family. Xbox 360 is going to bring people closer together, because of that always-connected nature, in ways that are going to really revolutionize the way people think about communications.