See the first part of this feature here.

In Part One, we talked about the events that brought about Xbox Live's redesign and its basic design and functionality. Now we turn to community features and avatars.

Live members will be able to recruit a party of up to eight people, even if some are already in games. Party members will be able to talk together, with the party leader able to move everyone smoothly into a game (as long as they all own it) or into a new feature, such as peer-to-peer photo sharing or viewing synchronized movies through the forthcoming US-only Netflix service.

Jeff Faulkner  says, “Today, if you’re playing Halo and I say: ‘Hey, let’s play Uno’, it’s a case of, ‘Right, I’ll set up the session and I’ll invite you in’. There’s a whole bunch of steps and I’m wondering what’s going to happen, where he’s gone. For new people that’s difficult. So what if the party leader selects the new experience and we all go there together – no loss of communication, no loss of us being together and social?”

We visit Jerry Johnson (below), product manager for the software that runs Xbox 360, who has 100 full-time staff working under him. His office is cluttered but bright and filled with figurines, including some of characters from The Behemoth’s imminent XLBA title, Castle Crashers. He demonstrates the flexibility of the system by starting a co-op session of Gears of War, inviting another 360 on his desk to join a party and calling them into the game. Without even having to go through Gears’ menu, they’re dropped straight in once the game has loaded. “This is the base experience; some games might work better,” Johnson says, explaining that no game will need patching to work this way.


Add to that the new UI’s avatars, which Whitten sees as a way of articulating a more social atmosphere: “The Community channel will be filled with animated avatars that are all saying: ‘Come on over, I’m playing this’. Press one button and you can party up and get into their experience or start that conversation.”

Though the party system is a long-requested feature from core users, it’s been made as accessible as possible for the broader market. Naturally, having to make changes to the UI to suit a new audience and serving Xbox 360’s existing one hasn’t been completely easy – it’s easy to imagine that the cute stylings of the avatars might not go down well with some of the types you meet on Live. Could Xbox 360’s popularity with the hardcore actually stifle some of Microsoft’s ability to innovate and bring such changes?

“They’re also some of our biggest advocates,” Johnson responds. “I always look at it as getting to the heart of what they really want. We’re struggling – well, we’re not struggling…” – he shoots a wry look at Microsoft’s PR – “Struggling is a bad word! We look at it and ask what our opportunities are. We have a strong hardcore base right now, but at the same time we want to go from 12 million to 20, 30 million users on Live.” As a result, he must perform a balancing act to ensure both sets of users will benefit.


Another gesture to the hardcore is the Guide. Its functionality has been increased to match all that the current dashboard can do and use the same blades interface, but still fits into the same 32MB of RAM, and Whitten claims that it will be more responsive. It’s intended as a core users’ shortcut device, and will allow players to quick-launch in and out of content.

The changes Microsoft is making to Xbox 360 are sweeping and deep, yet relate purely to its software. As we talk over lunch, Schappert sees their scale as a first for consoles: “We can go and change the operating system to deliver a new box without changing the hardware. It’s never been able to happen before in the console world.”

“Arguably, it’s never been done in consumer electronics,” interjects Aaron Greenberg (below), a long-time Xbox staffer who’s now director of product management. “The cell phone I bought a few months ago hasn’t changed, the iPod I bought a year ago hasn’t changed since I bought it. In this case we’re actually enabling the Xbox to get better over time. We’ve done that with the spring and fall updates incrementally, but this is completely reinventing what you think the Xbox is all about.”


Microsoft’s PR team has been careful to use the word evolution rather than reinvention up until now, since it might indicate that the blades were, fundamentally, a misstep. But Whitten shares a horror at the number of 360 owners who must have no idea that Hexic has come loaded on their systems.

“I don’t want to hit myself too hard, because I was pretty involved in the original version!” he says. “But when we were first thinking about it there would be maybe 200 items on Marketplace. So that was our design point. But we’ve got 17,000 and we’re going upwards at an exponential rate.”

As such, the change is being communicated more as a reaction to unforeseen success rather than mistakes made at Xbox 360’s inception. But whether it’s an admission of failure or not, Microsoft is showing itself as being able to change.

And, spending time with the people who run Xbox, that isn’t such a surprising thing. Just the physical environment, as rooted as it is in a blandly corporate building, has an energetic and upbeat atmosphere. Scott Henson’s ‘living room’ isn’t the only idiosyncratic sign of personality around the jumbled corridors, which are lined with old computers and accessories and raggedly decorated with phrases spelt out with duct tape against lurid Xbox-orange walls. With anime posters, lots of Halo paraphernalia, what must be thousands of 360s sporting a huge range of faceplates (presumably to tell them apart), collectible figures, some brightly lit, others dim, some shared – each tiny office is different. Schappert’s proudly displays a signed picture of Mario by Miyamoto, XNA’s Chris Satchell jokes that his cleanly arranged office,  which also sports leather sofas, is, compared to Henson’s, a ‘New York loft’.



It’s easy to forget that, both Schappert and Don Mattrick, vice president of Microsoft’s interactive entertainment business, were previously game programmers. Schappert, over dinner at the steak restaurant that occupies the top floor of Valve’s building, tells us about the time he met Activision co-founder David Crane and excitedly told him about what circuitry he’d found inside a Pitfall II cartridge he’d pulled apart, and yarns about the development of Madden ’94. He and Whitten laugh at the way Shane Kim always seems to get the tough questions levelled at him by journalists, and make fun of Greenberg for his in-bed interview by two Penthouse Pets for the Das Gamer website at GDC this year. Everyone has a Live membership that proves that they really do play games – this is, after all, the company that has long championed hardcore favourite Ninja Gaiden.

But now, just as its system software is becoming better tuned to a more mainstream audience, Microsoft is also broadening its first party game catalogue. Gears of War 2, Fable 2, Viva Piñata: Trouble In Paradise and Banjo Kazooie: Nuts & Bolts will cover the hardcore well this Christmas. But though Lips, Scene It? Box Office Smash and You’re In The Movies comprise a much more convincing non-core gaming lineup than last Christmas’ Scene It? and Viva Piñata: Party Animals, they’re clear attempts to jump on a trail that Sony has already blazed with great success. When we meet with Kim, until recently head of Microsoft Game Studios but now vice president of strategy and business development, the next morning we suggest as much.

“I wouldn’t agree with that – I think when you see Lips it takes SingStar much further,” he counters. “I don’t think risk is just the domain of the type of game you do. We don’t just want to do titles because they’re different – we want to find things that we think can have large-scale appeal, but we have some things in the portfolio people will look at and see are different and risky and new takes on things we know. Risk-taking is not just about game type but what you do with it.”

With that in mind, consider also that Microsoft’s release schedule has been very heavy on sequels, but Kim assures us that: “We’re just at a point in the cycle where you’re seeing more sequels. I can tell you we have other new properties that are unannounced that we feel very good and are very confident about. We will continue to have new IPs alongside the franchises in our portfolio, no question.”

He also argues that broadening the appeal of 360 is not only about publishing a broad range of games, but about supporting a broad range of other functions on the console: “When you look at this year’s lineup, a lot will be E and T rated [for Everyone and Teen]: that has to be an element of the strategy. But with Live we have this incredible social network connected to your television and that means broader content than just games content.”

That’s bold new content like Primetime, which has the potential to hasten a whole new genre for videogames, one that brings the worlds of TV and interactive entertainment together, and the tremendous job Microsoft has done in building up its video Marketplace, especially in the US. It does enough business to put Live within the top ten of all video-on-demand services in the region, according to Ross Honey, director of Microsoft’s Media & Entertainment Group, through which all video content is acquired. With a third of Marketplace’s overall revenue now from video, it’s becoming an important part of the business and, as with the rest of its new strategy, Europe is now the focus – especially since Europe is providing more revenue per capita than the US. For instance, 40-50 percent of videos delivered in Europe are HD, compared to 30 percent in the US, figures Honey says easily exceed those of traditional distributors.

These cornerstones of Xbox 360’s non-gaming functions rely on Live to work, and they’re examples of the diverse expertise and technological sophistication in the form of networking power and software that Microsoft can bring to bear on the business. And Microsoft is improving Live still further without any real direct pressure from Sony or Nintendo. It’s unlikely that what the company has planned for Xbox 360 will be anything less than intelligently and robustly designed and built, but the company is still making a bet on whether the market to which it wants to extend its business is truly ready for living an online life through the living room TV. “We don’t see the world getting less connected in the future,” reassures Kim.

“Broadband continues to grow in leaps and bounds,” says Schappert. “Online is a big differentiator and we’re driving new functionality into it, and it’s allowing us to continue leapfrogging the competition. You can watch what they do and they run and chase us, and you know what, competition breeds innovation for everyone, but I think hopefully what consumers will feel this fall is that we can leapfrog them and – because my friends play it, it’s got more online features, I’ve had Achievements from day one and avatars – it’s hopefully a big part of the reason why they buy our box.” But there’s that word: hopefully. The first time Microsoft took a bet on Live it paid off, but only eventually. The question now is whether it will pay off again.