What about DVI or HDMI? Those are popular connections on HDTVs these days.  
 
TH: We believe that we have the right set of outputs right now to meet the requirements of people who have HDTV sets today. We're continuing to look at what's going on in the future, and as things change, we've developed a very flexible system, so we can adapt to the different demands that are out there.

So, to be clear, yes it can to 1080p, or no it can not?  
 
TH: It does not support 1080p. It supports all of the TV sets that are out on the market right now. All the sets that people are using to play games right now.

Inside the Box
 
ET: A lot has been said about the CPU and the GPU so far, but there really hasn't been much said about the rest of the system. Can you go into any detail about what the rest of the system is like?
 
TH: The I/O processor, developed with SiS, is responsible for enabling all of our input/output connectivity. It's responsible for the wireless controllers, the USB ports we have on the front of the box, the Ethernet port, the hard drive access.  
 
ET: What sort of wireless technology do you use in the controllers? Is it Bluetooth, or something proprietary?
 
TH: It's a proprietary technology that we developed. In order to do great games in a wireless fashion, you want to make sure you address some latency issues and some bandwidth issues. So we developed a proprietary technique in order to do that.  
 
ET: Speaking of the TV Encoder and output in general, that was something of a focus with the original Xbox. It was really a priority to have a higher quality TV output than the competition. Some of that goes away when you have a pure digital output, but not everyone is going to have that. What sort of work have you done in the TV encoder?
 
TH: Quality always takes precedent in what we do. We have a great experience in both high definition and in standard definition. It's a very high quality signal, we meet all the specifications that are out there worldwide. Many of the people on the team we had working on the product came from the WebTV space where they spent a lot of time developing TV encoders and they understand that space very well. We also spent a lot of time working with ATI, and ATI is a leader in developing technology for high definition TV sets. You take that group of people, the expertise that they have. A lot of that is our internal technology. You take our people and the ATI people and you put them together, and you develop a very efficient, effective, high-quality TV encoder.  
 
ET: What sort of connections can we expect to our TVs, out of the box? The original Xbox comes with just composite video, and you have to go buy another pack if you want S-video, or another pack if you want component.
 
TH: With the Xbox 360 you'll be able to connect to composite or component out of the box. There will be other things that we support like VGA.  
 
ET: So you will support VGA this time around?
 
TH: Yeah. We'll also support some of the SCART type adaptors in Europe. It will support S-video, but not out of the box.  
 
ET: What about DVI or HDMI? Those are popular connections on HDTVs these days.
 
TH: We believe that we have the right set of outputs right now to meet the requirements of people who have HDTV sets today. We're continuing to look at what's going on in the future, and as things change, we've developed a very flexible system, so we can adapt to the different demands that are out there.

DVD Output and a 20 Gig Hard Drive
 
ET: Let's talk about the DVD output. Are you upscaling to 720p or 1080i?
 
TH: For DVD playback? We can output 720p or 1080i, whatever content you have.  
 
ET: But is it upscaling? If you have a standard definition DVD movie—I go out to the store and I buy Spider-Man 2 and put it in my Xbox 360 to watch it.
 
TH: That will be 480p. I don't think it upscales on standard definition content.  
 
ET: All Xbox 360 games have to support 720p at a minimum but will have standard definition modes as well, some games are supporting 1080i. What about 1080p? Some new displays can handle 1080p…
 
TH: We have developed a box that supports all the devices that are out on the market right now. And we'll continue to look if there are other things that are being developed, we'll continue to consider those things.  
 
ET: So, to be clear, yes it can to 1080p, or no it can not?
 
TH: It does not support 1080p. It supports all of the TV sets that are out on the market right now. All the sets that people are using to play games right now.  
 
ET: It comes with a 20GB hard drive, with the ability to be upgraded in the future.
 
TH: One can imagine that there are scenarios where you could fill up more than 20GB, in the future. Downloading demos or full games, you'd have more media space, all that sort of stuff. The way to look at it is, we're trying to make the system as flexible as possible. If you have a detachable hard drive, if there are other things you can do with the box in the future, you have something that is scalable to those different environments.  
 
ET: One of the problems people have with the current Xbox is getting data off their hard drive, backing it up. Some games simply don't let you copy their saves to the memory card, even if they fit. If your Xbox dies, all the stuff on your hard drive is gone forever. Is there a scenario in place to save the stuff on your Xbox 360 hard drive? If a higher-capacity hard drive did come out, how do I get my stuff off the 20GB hard drive and onto the 80GB one?  
 
TH: We're not talking about the other scenarios right now, but we're certainly looking into ways to do what you're talking about.  
 
ET: Even with the backwards compatibility…right away it's a problem. I want to play Fable on my Xbox 360; all my old Fable saves are on my Xbox hard drive and won't let me transfer them to a memory card.  
 
TH: We're looking at different ways to do that right now, but we don't have a proposal that we're going forward with. We want to make sure it's something that we consider, and we understand the issues associated with it. If you do ever go to a different size hard drive, there's the issue of getting the data off and onto the new drive, and we want to make sure we satisfy that. I think Microsoft is well-positioned to be able to do that. The box is certainly powerful enough to do that. We just want to make sure we have the right set of tools to do that in the most efficient and effective way. One of the things that's so great about Xbox 360 is that it's just fertile with opportunity with what you could do with the box. You want to make sure you pick the right scenarios and you pick the right solutions to them. So we want to make sure we apply the right amount of thinking to solve those problems.

WiFi, Heat, and Noise
 
ET: WiFi—is it built into the system, or added on?
 
TH: Ethernet is built-in, WiFi can be added on. It was designed so that it's very seamless not only from a physical standpoint of snapping in and being flush with the box, but from an electrical standpoint where you plug it in and it recognizes the WiFi. It'll be a seamless thing.  
 
ET: Is it going to be 802.11b or g?
 
TH: It's a, b, and g.  
 
ET: Will it be available on Day One?
 
TH: Yes.  
 
ET: The original Xbox had an audio DSP in the Xbox MCP chip. Is there a DSP in the Xbox 360?
 
TH: The audio is handled on the CPU cores. Part of the flexibility of the whole system is that you can have these three cores and six different threads, so you can choose to do a lot of audio there, or if you have a game where you don't have a lot of audio you can do other stuff. We want to continue to give developers the tools to realize their vision of high-definition games.  
 
ET: So the SiS I/O chip contains the digital to analog conversion, but all audio processing is host-based?
 
TH: Yeah, the DAC is in the south bridge.  
 
ET: With these big fat hot chips…that's a lot of heat to bleed off. You have a heat pipe cooling solution and fans, but a lot of hot air still has to come out of the system. So how well does this thing play in a component rack, where you're a bit more space constrained?
 
TH: It plays very well inside something like that. When you design a box like this you want to make sure you take into account the worse case scenarios, and then you can go above and beyond the worst-case environments. You want to make sure you really stress it out. What we've done is absolutely that. We have a very innovative solution with respect to our heat sinks; we spent a lot of time analyzing our thermal solution to make sure it's well-balanced between thermal performance and also acoustic performance.  
 
ET: What's your noise floor under load?
 
TH: It will be less noisy than the Xbox 1 under similar situations, just to use it as a reference. We also have a lot more flexibility in terms of the thermal algorithms we're using. When you're using DVD playback, you have the ability to turn off two of the CPU cores, for example. Then you're operating under a lot less power, you can turn the fans down and spin at a much lower speed.  
 
ET: Is the power supply integral to the box? Or do you have a separate power supply in-line on the power cord?
 
TH: Some of the power delivery mechanism is internal to the box, but there is also an external power supply that delivers DC voltage to the box

Meeting Demand and Comparing the Xbox to Playstation 3
 
ET: Manufacturability seems like it would be a concern, seeing as how the chips are so large and advanced and you're launching in three territories before Christmas. It's already typically hard enough to satisfy demand in one region at a launch. Are you going to be able to build enough of these things? Can you get a million, million and a half in stores in each territory in time for Christmas?  
 
TH: We will be able to meet our expectations in the different regions we're launching in. We have parts in hand; we're well on our way. We're doing a lot of great work right now; our partners are all geared up. We think we can meet the appropriate amount in each territory.  
 
ET: Without saying what "an appropriate amount" is…
 
TH: We're not talking about that today.  
 
ET: Yesterday, Sony came out with their big unveiling of the PlayStation 3. Have you had a chance to see the specs?
 
TH: A little bit, yeah.  
 
ET: How would you answer those that say they have a performance advantage? They say their CPU is more powerful, their GPU does this many shader operations per second…  
 
TH: I don't really see how they're more powerful when they have one CPU core and we have three…  
 
ET: They would argue they have eight cores.
 
TH: They have one core, they have seven something else.  
 
ET: They're claiming higher gigaflops for their CPU, and a total system performance of two teraflops.
 
TH: I think it goes back to what we were talking about at the start of the discussion. It's really about developing a whole platform. It's not just about having a great platform on which to develop games. You have to have great hardware, but you also have to have great software and great services. When you do that, when you architect it from the ground up and focus only on developing a great game console and a great entertainment experience, then you are able to use every transistor on that design efficiently and get the most out of it. I would say that if you take a look at what's going on in some of these other designs, whether or not they'll be able to maximize all the different functions inside that particular design. You have to take a look at if they can manage all the different cores they have, you have to look at the bandwidth and communications and if they're going to get different bottlenecks.  
 
What we've done is we've made sure that not only is our software and our hardware and our services all balanced so you have this great experience and it's easy to develop to, but we spent a lot of time working with ATI and with IBM, over 1,000 people, and we were only focused on developing this great console. We made sure that there was great balance between the memory and the GPU, and balance between the CPU and the GPU. There's balance inside of the GPU itself. You take a look at the embedded DRAM, for example. We put over a million gates in the embedded DRAM that do processing internal to the embedded DRAM. To do things that would normally be done on the GPU side. It helps with some of the stuff that happens during the rendering process, which means you don't have to shift that stuff back and forth across the memory bus.

The Final Hardware
 
ET: The demos that we've seen so far—the stuff on MTV, and that was running at the press conference last night and will be at the show—is that running on the actual final hardware? The three-core CPU and the final GPU, running at final clock speed?
 
TH: No that's all running on Alpha Dev Kits.  
 
ET: What is in an Alpha Dev Kit and how does it compare to the final hardware? We've heard it's a two-CPU Power PC, not dual-core but two separate CPUs, and basically a 256MB Radeon X850.  
 
 
TH: Right. The best way to look at it is that, well it depends on which functions you're looking at, but in aggregate it's probably 30-40% of what the final product can do.  
 
ET: The final product will be at least twice as fast?
 
TH: Right.  
 
ET: So all the stuff we've seen running so far… Gears of War, Kameo, Perfect Dark Zero, Test Drive, Need for Speed… all that stuff was running on an Alpha kit that is that is half or less the final system's power?
 
TH: Right, right. I mean different games are going to behave differently, but as a rough number, yeah.  
 
ET: When do you plan to get to developers the final dev kits that have the real three-core CPU, the final GPU, the unified memory architecture, all that stuff?
 
TH: That process is happening now.  
 
ET: So it's sort of trickling out to developers as we speak, they're getting their hands on them?
 
TH: It's not really trickling…I would say that the process is happening. We are actively engaged in making that happen.  
 
ET: You could say that within the next couple of months, all the developers should have their hands on the final hardware and can begin running their games like it will run on the final Xbox 360, and optimizing for the architecture?
 
TH: Yeah, that's a reasonable timeframe.  
 
ET: The original Xbox was home to a lot of homebrew development that Microsoft didn't really intend for. But that kind of thing has proven pretty popular, like with all the homebrew development happening around the PSP. Do you guys plan to embrace this notion more this time around, or is it too worrisome with Live always connected and the marketplace and so on?
 
TH: It's very important to have a very secure system, and we're making sure we have a secure system. It's a very private system, very secure.  
 
ET: Can you explain how you're locking it down?
 
TH: We're looking at it from a holistic standpoint, everything from servers to CPUs. We learned a lot from Xbox. We've architected the box to be very secure, and we started thinking about that from the ground up, and how to solve that problem holistically.