I came to E3 this year in search of good news about the Xbox One. By week’s end, I found a few men able to tell me some. I’d heard the bad things about the Xbox One—the inability to lend games discs to friends, the requirement for the console to check in online every 24 hours in order to play even a single-player game. I’d heard some of this with my own ears. I’d read some of the other unsettling things nearly on the eve of E3 in a series of policy documents by Microsoft that seemed incapable of balancing the Xbox One’s unprecedented new negatives with whatever new positives the machine was going to bring. On the night of June 10, at a massive E3 conference in the Los Angeles Memorial Sports Arena, the head of PlayStation business in America, Jack Tretton, smiled as he delivered a series of announcements about things the PS4 wouldn’t do, things that mapped neatly against things the Xbox One supposedly would do. PS4 wouldn’t check in every 24 hours. It wouldn’t stop you from lending a game. Tretton received a rousing and emotional ovation from the thousands of industry professionals at the PS4 event. A day later, Tretton more or less dropped the mic. Forget the Xbox One, the consensus was. More like: Sony won. But only an hour after Tretton made his announcement, back when the PS4 buzz was strongest, I was entering a Microsoft event five miles away. There I found people who are making games for the Xbox One, people who don’t seem irate about the machine but, rather, seem excited about it. In the days to come, I’d meet more and eventually sit down with Phil Spencer, Microsoft’s head of Xbox game development to get his admittedly biased take. I wanted to hear the positives, because I could not accept the madness that there might be none. Kotaku: Let's start with something I imagine you guys think is a positive and yet I don't think it's understood by many people as a positive or why it's a positive and that's: This is going to be a console that—for the first time ever among consoles—you're going to have to make an online connection within 24 hours when you're playing a single-player game. Essentially it's checking in on you... Phil Spencer, Microsoft Studios: Which would not be one of the positives, right? When you think about the ecosystem, I would not try to sell or position to a gamer that the connection requirements, [and] to some extent the bandwidth requirement—though the bandwidth requirement for licensing is something in Kilobytes—the advantages... Kotaku: Would you not argue that that's one of the big boons? [Spencer laughs. I take that as a "no."] At the Xbox event on the night of the 10th, I run into Ted Price, whose studio Insomniac Games had been PlayStation-only since the late 20th century, until about a year ago. He sits in front of a looping pre-rendered trailer for an Xbox One exclusive called Sunset Overdrive, a—his words—“highly-agile open-world shooter.” Price wants the game to be updated online regularly, maybe even daily, though he doesn’t want to commit to that. He wants the game world to change. He wants to offer players new weapons and challenges, to take in player feedback and adapt. He wants this even for the undated game’s single-player. He seems to like the idea of a game that would be checking in online a lot. “When it comes to our game,” he tells me, “being online is an aspect of playing a game that is constantly updated.” Call the Xbox One anti-consumer if you will, but it strikes me that Insomniac is about as consumer-friendly as a game development studio gets. They’re constantly reaching out to the community and have done so for years. Maybe they got a sweet deal from Microsoft to be an Xbox One exclusive, but these gaming nice-guys...they had to be seeing what others were seeing, and yet they weren’t fleeing from Xbox One. Rather, they seemed quite comfortable to be on Xbox One. I suggest to Price that his studio might push back to Microsoft against the 24-hour check-in requirement. “I think they’re getting plenty of feedback from players right now,” Price says. Insomniac could add pressure, I offer. “There’s a lot of opinion out there right now on all these consoles,” he says. “We’re focused on making the games. For us that’s what we do best. Building a world like this and building new IP is something that gets us energized.” Spencer: When you think about the media that you have available in your life today, whether it's books, music, video or, frankly, games on any other device, the physical licenses don't exist anymore. What you're doing now is you're buying this content which is associated with your account and the device that you're on. That content moves with you. It's non-perishable... You lose the disc, the disc scratches, frankly you don't care about the disc anymore. The content's associated with you, your library roams wherever you go, you have access to it on any machine you log into, your family has access to the full library of content that's available to you. We also understand that this is going through a transition for consoles. A lot of other media have already gone through this transition, and the advantages for other ecosystems are out there and people have voted. There are iTunes songs sold. People do go buy those. But when we go through the transition with games, there's a physical world that's out there today. We want to make sure we support that...A disc is a good way for you to bring a lot of data into your house and install it on your hard drive. So we want to support that. Another feature is the secondary market. We wanted to get out there [and say] we're supporting the secondary market. You can re-sell your disc, and there's work to make that happen. It's an important part of the ecosystem today. Your licenses are associated with you and your account and you're able to roam that wherever you go on any Xbox One. You know what content is available to you. As you look forward and you look at digital ecosystems—we can talk about World of Tanks... World of Tanks is a digital licensed product, as well; it takes advantage of the cloud in interesting ways in gameplay. The game is natively online. But also I can have an account at work—don't tell anybody I play at work—I can go home, I am playing World of Tanks on both machines. I'm kind of always up to date. In our system you actually would always be up to date, because the box is actually making sure that you've got the latest versions of the bits, so when you sit down and click play it's not, let me wait for the new patch... and you can turn that off... the content you have is always available to you and up to date. Kotaku: You're anticipating that console gamers will be more mobile creatures than they were before? That they'll always be roaming from house to house and box to box and that constant access to content will feel more relevant? Spencer: I think there are two pivots to it. One is moving from box to box, multiple machines in a house. And if you think about a box—I know to some people out there they like to make fun of us when we talk about television—but if you think about a box that's going to bring unique capabilities to television viewing, you can actually imagine a house that has multiple Xbox Ones, over time, connected to your TVs. Similarly, when you go from TV to TV, you assume you can always watch AMC, when you move around to different machines in your home—I'm not saying this is tomorrow or even on launch date—we designed the system thinking about long-term. Who knew that Nathan Vella would be at an Xbox showcase last week? He runs Capybara Games, one of the most heralded indie studios out there. The narrative right now is that indies flock to PlayStation. Vella, who tells me he's cool with all the platforms, is sitting at the Microsoft event, drink in hand, with a trailer of his team's 2014 Xbox One game, Below, on a loop. A little man with a sword and a shield battles through massive, beautiful worlds. "We started working on this game [before] Demon’s Souls happened," he tells me. "That game kind of vetted a lot of our beliefs that people are looking for brutal but fair shit." Vella's game is one of the only ones shown for Xbox One that day that doesn't have a gun. It looks like an art project and/or a successor to Capy's gloriously oblique Superbrothers: Sword and Sworcery. "Sworcery is about walking; Below is about exploring," he says. "And while you’re exploring, you're surviving, because it’s a difficult game. It’s not a game that’s going to hold your hand. It’s not a game that’s going to tell you anything. It’s textless. It’s essentially tutorial-less, and you die a hell of a lot. When you start exploring, your goal is to find everything and while you’re trying to find, you’re really just trying to survive, and if you manage to survive, there’s an opportunity for you to discover a whole lot." He mentions that there will be a "real persistence" to Below's world, but that "we're being mighty coy about that." His team would be "using the whole suite—and then some of the whole Xbox One online features." It's a single and multiplayer game. This all sounds so nice. He doesn't sound like he is allied with the bad guys. That 24-hour thing not bugging you? I asked. The trading in thing? "I think for us it’s all about the game," Vella says. "We’re working in a space where we want to hit a very wide audience and Microsoft proved that they could do that with Xbox 360 to a huge market. Being on a downloadable service alongside Minecraft, that matters a lot. For me a lot of it is about helping to provide alternate avenues on a platform for gamers to experience different things." He adds that he liked the competing platforms, too. I can't help but wonder about how a studio as creative as his would take advantage of a console that had to keep checking in online. Maybe, if creators knew that was a default feature, they'd all do something good with it? [Spencer and I discuss the Xbox One's new family sharing option, which lets 10 members of a "family" share access to games. This seems to be the best thing of all the uncustomary new parameters that have been established for this new Xbox. In a family group, the head of household can always play any game; and one other member of the family, no matter where they are, can play too.] Kotaku: Can we be in the same family? Spencer: Yeah. Kotaku: What would be the limitation on that? Spencer: [After encouraging me to check Microsoft's published document on this] I do think that sharing in a family group is an important part of the positives in our ecosystem today...You don't have to send in your birth certificate. You define what a family unit is and the people who connect to you and how that library works. Kotaku: The 24-hour thing is required in order to enable this? You weren't jumping on the opportunity to argue that the 24-hour thing is a nice thing or a positive thing... Spencer: I just said it's not one of the selling features of the box. To know that your licenses are always up to date, to know what content is associated with your account, if you're going to support gifting, if you're going to support the re-sale of content—because remember, when you go back and sell a disc now, the license is actually associated with your account, so if you think through the mechanism, the license has to get disassociated with your account, it has to get associated with somebody else's account, requires that we actually are able to check what licenses are available to you and those are available to you wherever you go. Kotaku: Is that something you could turn off or change if people are in some extreme circumstance where you know they wouldn't be able to... the military base is the thing that gets brought up all the time. Spencer: It does. It's a good question for people who are in, I'll call it, a completely disconnected state. Look, you can imagine, we're trying to launch a console and there are a lot of moving pieces to it. We want to be unambiguous to what our policy is. We're going to put it up in black-and-white terms on the website, Xbox Wire. Here's what we're doing. We're taking feedback and we're absolutely listening to what's out there there. But I don't want people to take that statement to think that our policy isn't our policy. If you're in a situation—I'll go to an extreme—where you can't connect to the Internet, you can't tether to your phone, you have no Internet connection, the Xbox One isn't going to be the box you want to buy. Because the box, it's similar... I'm not making fun of anybody else's product, but if you think about an iPad, if you could never connect to the App Store, it becomes less functional, right? So what we're saying is this is a box that is a natively connected box. The features and, frankly, the content that is created is expecting an Internet connection. That's where the creators are taking this. One of the buzz games of the show, possibly the Game of E3, is Titanfall, a multiplayer shooter made by a team that previously cooked up Modern Warfare. It's coming to PC, Xbox 360 and, most importantly, Xbox One. The development team is called Respawn Entertainment and is led by the top people from the Call of Duty studio Infinity Ward. Vince Zampella is the boss there, and when I run into him at his publisher EA's booth in the midst of E3, the negatives of any console are far from his mind. He's showing a hot game that runs on Microsoft's new box. Titanfall is a multiplayer-centric shooter, but not quite the Call of Duty type. Zampella's crew is showing off a seven-on-seven match, but the action is amplified both with the agile mech-like Titans that players can command in the map and with hordes of computer-controlled grunt soldiers. These grunts, Zampella explains to me, are meant to behave like the AI (artificial intelligence) of the kind of enemies you'd see in the single-player campaign of a big shooter. Respawn isn't making a single-player campaign for Titanfall. "That’s a 7 on 7 game but it felt huge because there’s AI in there that brings the world to life," Zampella says, referring to the Titanfall bout I'd just seen. The AI for the grunts is designed to run off of Microsoft's cloud servers, a service that the Xbox One maker is offering to all game creators on the new console. The cloud service isn't the same as the 24-hour check. That check is lightweight and once a day, at most. Cloud computing can be constant. A game that uses it might have to maintain a connection, most likely. Titanfall's use of it wouldn't be a hassle. After all, the game is multiplayer; it needs to be online just for that, alone. With Zampella there, I sense I can get some answers on whether this cloud stuff is really just hype. I mention I'd seen plenty of games that don't use the cloud rendering tons of characters on screen, though maybe not in multiplayer. "It’s better to do it on the cloud," Zampella said. "It’s more secure. It’s a better experience. It also lets us focus on the experience we’re giving to you, the rendering experience, all that power. The more we can offload the better, because then we can do more locally on your box." In other words, if they calculate the grunt AI remotely, the Xbox One can spend more processing on graphics. It's not just that. The cloud servers, Zampalla said, are "dedicated servers so there’s no host advantage. The game spins up fast." No host system has to be bogged down with that grunt AI. "When that’s handled on the cloud, now it’s the same experience, it’s not lagging for you. If I’m the host, and I’m calculating AI on my box or if we’re both calculating AI on our boxes and we have different things..." That wouldn't be good. The cloud helps. To Titanfall's busy multiplayer design, perhaps it's essential. Kotaku: It becomes a problem for you guys, if I could buy a PS4 in the hinterlands with no Internet and potentially play some of the same multiplatform games that are released on Xbox One—and there I am able to play them without an Internet connection. Spencer: I think the advantage is that designers understand that this is a natively-connected box, and things like World of Tanks [being] exclusive on our box is [a sign that] creators understanding the opportunities when you have a connected device. Vince bringing his game, because he understands the game that he is bringing: I am bringing an online multiplayer game and I can fully support cloud, dedicated server, the capability of a connected device. Kotaku: If you guys have been thinking about this and really believe in the online connection, it seems like a misstep to me to not be able to say, ‘we'll be supporting lending on day one.’ It feels like there's some shooting yourself in the foot. Spencer: I'll take that feedback. Kotaku: You want to do the lending, it sounds like... Spencer: We do. But we're also trying to launch and we understand feature sets. We've got partners and publishers [we] want to talk to about how lending is going to work. We don't dictate pricing to our partners on our platform. We want to give them capabilities to support content and business models that they want to support with their content. It sounds like Sony is trying to do the same thing. How do we support what our partners want to do? We want to have the conversations with them and land on a plan. We understand lending and the benefits of lending, so, funny videos aside, we get it. We want to make sure we land on the right solution that fits a digital ecosystem moving forward. If you think about lending in digital ecosystems, it's not something a lot of other people have supported. We're going to commit... gifting, we said we're going to support that, secondary market we're going to support that even though the license is digital and it's not as trivial as just handing a disc to someone else. Lending, we want to do it, we want to work with our partners to make it possible. Kotaku: You understand, obviously, that because these things exist on discs, it's why it seems so odd that—you're not launching until November—since I would think I can lend you this notebook and discs, surely I could do the same, but you guys are saying that you won't have the lending solution. Spencer: We don't have a lending solution today. Kotaku: You might have one? Spencer: We don't have a path... I don't want to make a commitment to somebody without a plan of record on how that lands. I could over-promise, under-deliver on the features. I don't want to do that. I want to make sure. I understand how gifting is going to work. I understand how the secondary market is going to work. Kotaku: As you know, some media outlets can be sensational or extreme—or so I've heard. [This is a self-aware joke, and we both chuckle.] A Eurogamer headline, if I remember correctly, said: Microsoft kills game ownership and expects us to smile. Spencer: Yeah. Kotaku: Do you feel like you're killing game ownership? How would you put it? What are you doing? Spencer: I do not think we're killing game ownership. I think, if I look at other media that I interact with, I think I have more capability with my music. I think I have more capability with my video library than I probably have ever had. Any other game platform on any other device that I play games on, my library is digital and there are distinct advantages to that, and I think there are real advantages on game consoles that will actually make the library of games that you have more functional. Microsoft holds sessions during E3 called Xbox 101. During these sessions, a team of Microsoft engineers led by a man named Jeff Henshaw, discuss the benefits of the Xbox One's better Kinect sensor, the ability to run interactive apps alongside live TV and the computational prowess of Microsoft's cloud servers, those same servers Zampella's Titanfall team are using. Henshaw starts running a demo that shows 30,000 or so asteroids, all of whose positions and movement are culled from real NASA data. The asteroid show up on a big screen in the Xbox 101 demo room. They're all purple. "Doing all of this computation would require a little over 10 consoles from the last generation," he says. "This is like taking about 10 1/2 Xbox 360s worth of CPU power and cramming it into one elegantly-designed Xbox One. So we are thrilled at what we have been able to do there. Because this type of raw processor horsepower that's mapping the current time and position in space in real time can all be done by a single Xbox One." He then flips a switch or presses a button or something and about 300,000 more asteroids appear. These are green and all calculated, he says, by the cloud. "What we've done is we've actually invoked CPU resources from the cloud that can instantly be brought online and scaled up and those cloud CPU processes are now feeding about 500,000 updates per second to help us track every single asteroid in real time." I later ask him if this demo is for real. We're seeing it in the middle of the E3 show, after all, where Internet connections are notoriously dreadful. Yes, it's real, he says, "We are on an Ethernet line with a private line out connected to our data centers." If the plug was pulled, the cloud asteroids would disappear. Asteroids are nice, but Henshaw anticipated that his Xbox 101 audience would wonder what the point was, especially for games. "So things like local foliage, blades of grass, atmospheric effects, gunfire, those things can be offloaded to the cloud," he says, "because they're all going to be in your immediate periphery and you want them to be hyper-realistic but not something you necessarily want to burden the console with. "We're already working with game developers to incorporate some of these concepts and they're coming up with some pretty amazing ideas. Some games will have levels that are literally infinitely expandable. The more players that come online and the more players that come into the world, they will simply spin up additional cloud computing resources to make levels infinitely larger and avoid load times altogether." He talks about persistent worlds, of games that keep running and can change when you're not there. He's not saying how well the cloud could do this for every game, nor is he saying much about how bad these games will break if the games' cloud connection drops—some games could be programmed to calculate ahead, he allows—but he's painting a picture of how games could be made on a console where it's a given that this kind of online stuff is available. Kotaku: Did you expect this amount of a buzzsaw to go through with all of this? This amount of blowback? Spencer: You know, you and I have done this for a while. Gamers are passionate in this space. That's why I love being in it. And the amount... there's kind of two vectors there, the amplitude and the frequency. You have a lot of people that are very vocal; you have a lot of people that aren't vocal. I don't take the feedback as being representative of what everybody thinks, and that's not dismissing what the vocal people are saying. I want to hear what they're saying, even when it's somewhat inflammatory in my Twitter account. I actually do read it all. And listen to the feedback. The feedback from the gamers make us better. I wouldn't characterize it as blowback, because I get equally positive things that it's great that Killer Instinct is coming back or that World of Tanks [is coming]. I don't think I can take one side of the ledger without the other side; it's just part of the business that we're in. Kotaku: There was a sense of anxiety about privacy and Kinect? You feel though that this Kinect is going to be something that gamers like. Spencer: That's why I explicitly wrote the paper on privacy. You are going to control the data that Kinect is capturing. You are going to control where that data goes. That's important to us. Kotaku: Ultimately how do you think this is going to play out? You have people thinking, Sony is a hundred dollars cheaper, Microsoft has built up a lot of negative reaction, that this is going to be a troubling launch over you. I'm sure you have moments of doubt, but what do you expect to have play out for you guys? Spencer: I don't know if you'll like the answer. Because I'm the content guy, I start with the content we put forward. Gamers play games. And I think we have, and this isn't really a first-party comment, but I'll look all up at the content we showed on stage, I think we have an incredibly strong library of content. And we built a box and the capability that makes that content unique to our device and our ecosystem, whether it's supporting Kinect, whether it's online and how the gameplay like Titanfall happens, if it's functionality around SmartGlass and connection to other devices. I see the creators interested in the platform that we're putting forward. We have Ted Price on our stage for the first time. He knows the platform we're building. Vince, he knows the platform we're building. And I think gamers play great games and I feel really good about the games we're putting forward. We do need to tell our complete story. Policy is not the reason somebody goes out and buys something. They fall in love—hopefully they fall in love—with the value prop that you have. We need to tell that story completely. I think when we tell that story completely, people will understand the advantages. We're trying to manage the transition, because we understand console gaming is physical today, for the most part. Secondary is important. People want to be able to gift their discs. I understand the lending scenario is important as well, so we're working through that transition. But I just look at the world of any other device that I own, and the digital media to me has advantages. As I think about a box that is going to be in the market for a long time, I need to think forward about the ecosystem and how it's going to turn out. We need to make the right trade-offs. Kotaku: And you think your competitors will eventually come around to you guys rather than you having to bend toward them? Spencer: I don't know, honestly, and the other thing I'll say—I've said this a few times today—I don't really just look at our competitors as Sony. When somebody walks into a store, it's not like their money only goes to Sony or me. There are a bunch of choices people are making about devices they buy and where they play games. I think that's good for gaming, all up...making sure we understand the complete competitive set and where all of gaming is happening. Games are happening on a ton of devices. I think it's great for us. We're trying to make a box that's as relevant for those people as it is for core gamers. We're trying to do both. I wanted to spend time [at E3] on stage telling the core gamer, this is a box for you. Look at the content that's coming. 90 minutes of games. No Kinect, no TV. To contact the author of this post, write to stephentotilo@kotaku.com or find him on Twitter @stephentotilo