Xbox Scarlett Isn't Microsoft's Last Console, And More From Phil Spencer At E3 2019

Spencer shares his thoughts on a variety of hot-button topics.

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Now Playing: New Xbox At E3: Everything We Learned About Scarlett

Microsoft promised to go big at this year's E3 2019, and so it did, hosting a lengthy press conference in which it revealed its next-gen console, Xbox Scarlett, and showcased numerous games along with services like Game Pass and xCloud. During E3, Head of Xbox Phil Spencer sat down with GameSpot sister site Giant Bomb for an extended interview, and he discussed a wide range of subjects, including that new Xbox, backwards compatibility, and Sony's absence from E3.

In the 49-minute interview, Spencer also talked about competition with Sony and Nintendo, saying that while he wants Xbox to be No. 1, he thinks everyone can win at the same time and work together to lift gaming's overall profile. He said he doesn't see the business as a fight, but instead an opportunity to create things that people love. (He also noted that E3 suffers without Sony at the show, and indicated he would like to see it and Call of Duty publisher Activision return in the future.)

He wants to get rid of the "friction" that exists between competitors, and recent examples of that include Banjo coming to Smash Bros. Ultimate and Sony and Microsoft working together on cloud-streaming technology. He also called out The Master Chief Collection as an example of Microsoft doing something new in bringing the game to PC on Steam.

In regards to Project Scarlett vs. the PlayStation 4, Spencer said he wants Xbox to be No. 1, and he's "as competitive as anybody." But that doesn't mean he wants to see Sony suffer.

Regarding Project Scarlett, Spencer said raw power is "very important." He doesn't know how Project Scarlett's specs compare to the PS5. It's expected they will be similar, so at the end of the day, competition may come down to price and brand loyalty. Whatever the case, Spencer said Microsoft is "aiming for first place," and that being a leader in the console category is something that the Xbox team is committed to achieving.

Spencer also spoke about how Microsoft is not planning for Scarlett to be the company's final console. He said Microsoft doesn't know yet what form the next system will take, but Microsoft as a company is committed to making more hardware after Scarlett. He's also not committing to a schedule, saying there is no regular cadence for when new hardware launches will come out. The challenge for Microsoft is to think about what the next evolution of gaming will be, and then to design a console for that.

Additionally, Spencer said in the interview that Microsoft hasn't settled on a name for Project Scarlett as of yet. "I honestly don't know what the name is; we don't have a list of names," he said. Project Scarlett is rumored to be the overarching name of Microsoft's next-generation console strategy, comprising both a high-end system, codenamed Anaconda, and a lower-spec model reportedly codenamed Lockhart. Microsoft has only talked about the higher-end model so far.

And in regards to pricing for Project Scarlett, Spencer said Microsoft has a "window" that it's looking at, but nothing is locked down yet. One issue that could complicate the matter is President Trump's proposed 25% tariff for electronics made in China and shipped to the United States, Spencer said. Nintendo just recently moved production of the Nintendo Switch from China to Southeast Asia to avoid the potential tariffs.

Also in the extended chat, Spencer talked about how backwards compatibility is important going into the Project Scarlett generation. He said he wants to respect the purchases people have made on older platforms, and as such, Project Scarlett will support "thousands" of games from across four generations of Xbox systems. Not every older game may work on Project Scarlett, however, due to licensing deals and other business arrangements. However, Spencer said the new deals that Microsoft is making with developers and publishers today factor in backwards compatibility more than before. Publishers and developers now see the value in legacy content, Spencer said, and these matters are playing a role in new licensing deals.

Spencer also spoke about Xbox Game Pass, and he said it's creating a situation where developers may come to Xbox in particular because they know they can launch a game into a catalog that has millions of subscribers who are only a button press away from downloading their new game. At the same time, this could put a new challenge on some developers because they need to ensure their back-end infrastructure is capable of supporting potentially millions of people playing right away, Spencer said.

The Microsoft executive also touched on xCloud, which is the new Xbox game-streaming service launching in October. Spencer said it's probably still a number of years away from streaming becoming the most popular and prevalent way people play games. Right now, and for the foreseeable future, Spencer said playing games on local hardware in your home will be the best way to experience big new games such as Cyberpunk 2077 which Spencer specifically mentioned. However, for those who want to play games on the go on their phone or another device and are OK with comparably lower resolutions and frame rates, they'll be able to do that with xCloud.

Intriguingly, Spencer also mentioned that he sees a number of interesting possibilities emerging when Xbox streaming takes off, one of which involves users being able to rent their systems to act as streaming boxes for other people. It remains to be seen how this would work, but Spencer talked about a potential future scenario where people could theoretically let strangers "rent" their local box to stream from when the main user is away. Spencer said he's excited about the possibility of streaming to create additional value for consumers beyond the traditional means, and this is one potential example of that.

Lastly, Spencer talked about the ongoing relevance of E3. He said the show remains relevant and important to the gaming world. It's a time in the year when the whole world is watching gaming, and that's very important today when the industry is coming under criticism and judgment. One recent threat, Spencer said, was the World Health Organization's designation of Gaming Disorder as a recognized disease. He also said E3 is an important time of year to show the world that gaming is not just kids in a basement. And without juggernauts like Sony and Activision, E3 could take a hit in terms of prominence, Spencer said.

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