Another aspect of it is the community, whether it's kids or adults, and bringing the community more to the forefront of the entertainment experience. You could be watching Lord of the Rings on your 360, I could be playing Perfect Dark Zero, but we could have a conversation over voice while we're doing that. We could talk about those experiences. I could invite you in to play Perfect Dark Zero while you're watching the movie.

Then the last thing that we're really thinking about is the content itself and making it more inviting. We have this notion of Xbox Live Arcade, which is aptly named. It's like walking into an arcade, but over the network. And you'll be able to download everything from casual, time-killing games to the classic arcade games like Pac-Man.

Q: The big hit on Xbox has been the Halo series. When will we see a version of Halo for Xbox 360?

The Bungie Studios guys have had development kits for a long time now. So, they're cooking some interesting stuff for 360. I think it won't disappoint in any stretch of the imagination.

We have one formula with Halo: Ship it when it's ready. We did it with Halo 1. We did it with Halo 2. And we haven't disappointed the audience yet. That's Bungie's philosophy; that's the Xbox team's philosophy.

Q: How much is the Xbox 360 going to cost?

Not sure. It's probably about two months away before we make the decision on that.

Q: The last Xbox went out at about $300 initially. Will the 360 be priced higher, lower?

It's going to be in the neighborhood.

Q: When exactly will you release the 360?

When it's done and we've got enough of them. We're going to do something that's really unprecedented in the industry by launching the console in all three major markets for the same holiday. It's never been done before. So, that's some of the logistics that we're working through now.

The chips are in production, the machines aren't. So we've got a little bit of work left to do.

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