REDMOND, Wash. -- Microsoft's got a new Xbox on the way, and according to the company, it's the foundation for the next 10 to 20 years of home gaming and entertainment.
The console, which has not yet been given a price, release date, or live game demos was shown off here on Tuesday and left just about as many questions as it did answers about where Microsoft is taking one of its most popular products.
CNET sat down with Jeff Henshaw, the group program manager for Xbox Incubation, to try to get some of those answers. That includes whether the company thinks naming a console "One" when it's technically the third-generation is confusing (spoiler: Microsoft thinks it won't be), whether the company will keep its much-disliked Microsoft Points currency around, and whether there will be hardened privacy for a system that depends on a camera designed to watch your every move.
Read on for an edited transcript of our chat.
CNET: There seems to be some confusion here about the ability to resell Xbox One games, or reuse Xbox One games among other users.
Henshaw: Let me clear that up unequivocally. Xbox One will support the reselling and used game market for Xbox One games. We have not announced details about exactly how it's going to work, or how licenses are going to be exchanged. That's all coming up later in the year. What we have announced is that a used game ecosystem will be supported, so people can breathe easy. They will be able to get used games.
CNET: You say you're going to support it, but is it going to be different from the way you're doing it now?
Henshaw: We haven't shared any of those details yet. The key thing to bear in mind is that in the coming generation, obviously retail sales are going to play a huge part in that ecosystem, and people will continue to buy shiny discs. But increasingly, content sales are going to happen online. That's what Xbox Live and the Arcade investments on 360 have all been learning towards, and Xbox One is really going to take that to the next level. The entire content portfolio will be available as well.
CNET: You showed off some of the ways the Xbox One can be used with other devices like tablets, but the example was a Windows 8 tablet. Obviously not everybody has those. What's the plan for Xbox One with the multitude of Android and iOS devices?
Henshaw: We want people, regardless of what device they're on, to be able to participate in the Xbox One ecosystem. Even today, we have Xbox Smart Glass apps on Android and iOS, and Windows Phone and Windows 8 tablets. So we're covering a very broad spectrum today, and we continue to invest more heavily with Xbox One in broadening the reach of the Xbox experience to multiple devices.
CNET: Kinect now needs to be on all the time. But there are obviously some people who say "I don't want this camera in my living room."
Henshaw: If you want privacy, we'll give you modes that ensure your privacy. And we actually have a little bit about this on the Web already. We will have something similar for the Kinect with Xbox One. The system is designed to have Kinect be an integral part of the experience. It's not the case where you'll be able to remove the camera altogether. But you'll be able to put the system in modes where you can be completely secure about the fact that the camera is off and can't see you.
CNET: Are there any sort of restrictions from cable or satellite companies that keep the Xbox One from working as a TV companion?
Henshaw: We want to offer that experience to people regardless of where they get their television. We recognize that people have a very diverse set of sources for where they get TV. Increasingly people are using over the top applications like Hulu Plus, Netflix, in fact those are some of the most popular experiences on Xbox 360 today.
Many people still have direct, for-pay relationships with their cable and satellite providers, and abroad it's an even broader spectrum. A lot of people, especially in Europe, have free, over the air transmission. And net tuners are starting to come along too, the ones that used IP-based tuners to relay digital signals. We want all of those to work with the Xbox One ... as long as it has HDMI out, Xbox One's going to have it covered.
CNET: Speaking of watching movies and TV, Netflix on the Xbox 360 has always required a paid, Xbox Live Gold subscription. No other hardware makers with streaming boxes are doing this. Are there any plans to change that with the Xbox One?
Henshaw: Nothing to announce there yet.
CNET: The Kinect showed up on Xbox 360 first, then came a separate version for Windows. Will the new Kinect work with Windows right out of the box?
Henshaw: The new Kinect is specific to Xbox One. We haven't announced any additional "flavors" of that generation of Kinect yet. Those are all things we'll be talking about soon.
CNET: What's the benefit of the Windows kernel in the Xbox One for developers?
Henshaw: The benefit is tremendous. Xbox One has several powerful subsystems. There's a very predictable, incredibly powerful gaming subsystem that game developers write their game titles to. On the second is a Windows kernel-based media experience with Skype, Snap mode, and more general application experiences. That is closer to Windows 8 than anything we've ever built before, and it definitely paves the way for a broader spectrum of application experiences on Xbox One, and you started to see that today. It gives not just developers, but us here at Microsoft the ability to innovate much faster than ever before.
CNET: So should we expect to see more about developing for the Xbox One at Microsoft's Build conference at the end of June?
Henshaw: I don't know the Build agenda, but I would assume not. Build is going to be very forward-thinking about Windows itself.
CNET: We want to know more about the Game DVR feature. Will it work with every game? How long can clips be? And where else can you share it?
Henshaw: The system has become powerful. Xbox One is the only system powerful enough to keep a running trail of the action you're playing -- in any game. Any game. There will be some points where you do something you think is a really big deal. Today, a lot of the time this happens offline, when you're by yourself. This gives users the ability to pick a segment of their gameplay, or a game developer can also trigger this from within the game. For example if you beat a big boss, or trigger a certain achievement, the game will recognize and tune the clip to that particular segment. Then you can share it out.
Today we talked about how to share it out with your gaming audience. We'll have more to talk about about where you share beyond that in the future.
CNET: What kind of file will it create? Is it a video recording, or something that's rendered in realtime?
Henshaw: That's a level of detail we'll talk about later on.
CNET: We have to ask about the name confusing people who think it's the first-generation one, and hey, the Playstation 4 is also on the same shelf.
Henshaw: The original Xbox was just the "Xbox," it wasn't "One." But this vernacular formed where people referred to it as the Xbox. Even today during interviews, I've slipped.
It only takes a little while before you realize what's going on underneath that name. There's something very powerful about it. Xbox One really embodies the concept that this is the first device, the combination of this very powerful console that brings all its eight cores, 8GB of RAM, super fast memory, super powerful SoC we built, super powerful dedicated audio and video processing subsystems. There's incredible power in this device, married with the next generation of Kinect for really enabling those subtle interactions between you and your entertainment.
So to us, One is really the embodiment that this becomes one device that addresses all the entertainment that you want to enjoy on your TV, and brings it to you in a way that's so simple, that it can be the only input you have connected through your television. It is truly the one place to go for all this. So One ends up being a deeply meaningful thing to us here. It's almost a bar that we are striving to achieve, and I think we nailed it really well with the Xbox One.
CNET: Do you worry that people will be confused by it though?
Henshaw: No. I think after today, there's just no question about it. I think there was a few minutes of "hmm" but then as soon as people realize what it's all about and understand the experience, the One brand immediately gets applied to this new generation of experience.
The thing you have to bear in mind, is that if you look at the original Xbox, the experiences have grown to become so dramatically rich and different. There's no resemblance anymore between the two. You can't confuse them in any way. So when people say "Xbox One," it's going to be reflective of this new generation of experiences. I really don't think there's going to be any confusion.
CNET: Speaking of confusion, will there be just one model of the One?
Henshaw: We have only announced one SKU for this.
CNET: Are Microsoft Points -- the money people have to buy with real money to buy digital goods on Xbox live -- dead? Or will they be with this next Xbox?
Henshaw: We have not made any specific announcements yet about what the digital content ecosystem looks like. But I can tell you that everything is going to get much simpler, and we're all going to happy in that sense.
CNET: When the Xbox 360 came out, there were tons of leaks. How did you keep it a secret?
Henshaw: We've definitely undergone a metamorphosis as a business unit. We know that we have built this expertise, and we've built this muscle over the past 13 years. We're respectful of our role here, and we're much more confidential about the inner workings, and that begins with how we think about early engineering and goes right through to how we secure our buildings and our office spaces.
CNET: So the Xbox 360 is going on eight years old. How long will the Xbox One be around?
Henshaw: It's a continuous innovation cycle. I would argue that this isn't done probably for about 10 years. Because we're still innovating on the Xbox 360 in ways we never even imagined. It's not done today. It wasn't done last month. It's not going to be done when the first unit rolls off the manufacturing line. It's not going to be done when the first person buys one. It's going to be done -- I'm hoping -- 10, 15, 20 years from now when it's enjoyed a robust lifecycle.
CNET: Is this the last time we'll see a hardware-based version of the Xbox?
Henshaw: You know, we've already begun to answer that question many years ago with Xbox Live ... We're definitely going to continue that trajectory. We've built Xbox One to be as future-proof as possible to support more innovation over more years than any product we've ever built. So I think you will continue to see very deep investments in Xbox Live, and eventually new peripherals and new accessories that will stretch what Xbox One can do.
Whether there will ever be another physical box? It's really really hard to say. Right now I just want to see this physical box.