We know, that’s a lot of ground to cover…Good thing Aaron likes to chat;)

Aaron Greenberg (image courtesy of dasgamer.com)

EBA: First off, thanks for taking the time to chat! Let’s start off by revisiting the recent GDC in San Fran. What’s your take on the show’s hottest topic -  OnLive?

AG: There’s no doubt that digital distribution is changing the landscape of video game entertainment, and it’s a category Xbox is in many ways responsible for creating and leading in the industry for years. Not enough is known about OnLive’s technology, with no product in the market and no consumers using the service, it is really premature to comment at this point.

EBA: Since digital distribution is such a hot topic these days, how would you summarize its role in Microsoft’s long-term vision? Is it fair to say that ALL consoles, including Microsoft’s, will eventually deal in digital distribution only?

AG: Future technologies, our growth online and digital distribution are major pillars for the future growth of Xbox 360. From day one, we’ve been focused on evolving the Xbox 360 into an entertainment platform that gives consumers more choices and more entertainment, and digital distribution is a huge pivotal part of that vision.  Personally, I love the convenience of being able to download a movie or a game and not have to mess with the discs, but I also realize that some consumers are, believe it or not, still buying music on CDs and driving to their video stores to rent movies.  So it is hard to say when exactly we really move to an entirely all digital model, but having the ability to choose digital is a great convenience for consumers like me.

EBA: Speaking of GDC, what’s Microsoft’s official take on the whole “Blizzard talking to MS about the next Xbox” thing?

AG: We’ve been pretty open about the fact that we believe the Xbox 360 is only somewhere around halfway through its lifecycle. Our official take on the “Blizzard talking to MS about the next Xbox” is that its total rumor and speculation. 

EBA: No matter which console, it’s pretty clear that MS has made a hefty commitment to community games through XNA and the XBLA Community Games channel. Recent reports indicate that while happy with the opportunity, some developers aren’t completely satisfied with revenue share, level of exposure, promotion, and more. What are the plans to see Community Games become a bigger success for everyone involved?

AG: Sales and expectations vary from developer to developer. Although this is still a very early snapshot of the Community Games sales potential, we’re finding that several of our top sellers will be taking home almost as much income from four months of sales as the average U.S. citizen earns in a full year. We at Xbox are very proud of offering a direct distribution channel to developers. This has never been done before on any console. Since we started the program, the response has been overwhelming with more than 200 community developed games already on the service.

EBA:Adding user-generated scores or other feedback in addition to making Community Games easier to find on the dashboard have been kicked around as possible quick fixes. Any plans to implement these or other changes?

AG: We’re confident that this business will only continue to grow as more and more Xbox 360 owners explore the channel and discover all it has to offer. We’re always looking for ways to improve the consumer experience, but we don’t have anything new to announce at this time.

EBA: Sony recently announced the price cut for the PS2. In your opinion, does this have any bearing on current gen console sales whatsoever and could you talk about what factors are in play when deciding to drop the price on a console? Do you think Sony will drop the price of PlayStation 3 this year?

AG: We don’t think the price drop of the PS2 will have significant bearing on the current gen console sales. This move from Sony at the end of the PS2’s life cycle is not unexpected. The future lies in the growth of current generation consoles and for us in driving those PS2 owners to continue to buy Xbox 360 over a PS3.

As far as the PS3 price drop rumors, to be honest we fully expect a PS3 price drop to happen by E3 at the latest.  If you look at the market fundamentals they have no choice but to do so with continuing year over year sales declines over the last 5 months, significant loss of market share and public response from consumers, retailers and publishers.  It is also a very difficult time economically to try and sell a product at twice the price of your competition.

We’ve always managed our business focused on deliver a great value and maintaining a price advantage over the PS3 was part of the original Xbox 360 strategy from the beginning. In many ways, we feel that dropping the price to $199 last fall has helped us fare better given the current economy but it is really just one component that adds up to Xbox being an overall better entertainment value for consumers. Xbox 360 simply gives you more for your money with double the games library of PS3, the highest rated games in the industry by a large margin and twenty times the number of movies and TV shows. Then you add things like our exclusive Netflix content and access to Xbox LIVE, the leading online community and I think you can see why consumers month and after month are voting with their wallets and selecting Xbox 360 as their console of choice.

EBA: Your recent comments about GTA:The Lost and Damned “outselling Killzone 2″ were widely reported and talked about all over the net (including EBA). Was it fair to compare the two considering their varied time at retail, difference in price points, etc? For the record, what are the exact numbers on how many units of the Lost & Damned DLC were purchased?

AG: Good question, the reason for my comment was to really try to covey our excitement around how well The Lost and Damned was doing and that this major part of the story was not being told simply because this content was not sold at retail.  The response from our owners was overwhelming as The Lost and Damned broke first week revenue records on Xbox LIVE Marketplace.  If I could share more specific figures I would, but probably better to ask Rockstar that type of information.

EBA: There’s been talk of Microsoft streamlining the ability for MMOs to appear on the 360, specifically titles like Lord of the Rings Online being kicked around. Knowing what titles like WoW are capable of, how interested in Microsoft in tapping into this market from the home console perspective?

AG: We’re already tapping into the robust Xbox LIVE community of more than 17 million members to create memorable massively multiplayer experiences on Xbox 360. In fact, we already have MMOs on the console, including “Final Fantasy XI” and “Phantasy Star Universe,” and even more on the way with “Age of Conan.” We’re even introducing the first a whole new type of massively multiplayer online game later this year with “1 vs. 100,” a dynamic, interactive game that lets the LIVE community  play along in front of an audience of thousands and an actual host for a chance to win real prizes.

While MMO games are primarily played today on the PC, we also recognize that they great potential for the future on the console, and I think Xbox 360 is uniquely positioned with the rich online capabilities and leading online community to deliver those kinds of innovative experiences in the living room.

EBA: Some analysts and insiders on the retail level are reporting that the Nintendo Wii craze is just about over; that the supply and demand have leveled off. Do you think Wii sales are slowing because of market penetration or simply the greater economic situation? How can Microsoft capitalize on this situation and increase the install base of 360′s among casual gamers?

AG: Those are probably better questions for Nintendo to answer. But what I do think is clear is that we’re seeing consumers now more than ever seeking out more entertainment value for their money. While the Wii has clearly experienced strong console sales to date, it is really a defined experience, delivering a very particular type of game and not offering the variety of richness you get in the same price range with an Xbox 360.  I believe that long term we are in a better position competitively as we built a multi-purpose system that delivers high definition games, access to a massive library of movies and TV shows and the industry’s leading online community.  Not to mention that we designed the console for continuous innovation, and in fact I would challenge you to compare the consoles we all launched in the market a few years ago with what is available today.  I think it is pretty clear that Xbox 360 is innovating at a much more rapid pace than anyone else in this space and with the resources we have dedicated, I fully expect that to continue for many years to come.

EBA: Alright, we’ll leave it at that for now, but before we go, care to share any teasers about what gamers can expect out of this year’s E3 from Microsoft?

AG: Nothing I can share at this point except to let you know that we have big plans for the show and we’re looking forward to finally sharing our news with the world come June.

EBA: Thanks for your time Aaron!

AG: Sure thing, look forward to sharing more with you and your readers at E3.