With the release of XNA Game Studio Express just behind them, Gamasutra met with Microsoft Game Studios' corporate vice president Shane Kim, and Microsoft Game Developer Group director of marketing Dave Mitchell in the heat of the 2007 Game Developers Conference.

The first half of this interview is available here. In this concluding installment, Kim and Mitchell discuss their feelings toward Nintendo as competition, Microsoft's strategy of funding game development in Japan, the upcoming episodic Halo content, Peter Jackson, and more.

GS: I heard you mentioned at the Blogger Breakfast that there are some things that Nintendo is doing that feel like areas that you would want to get into. Can you be more specific about that?

SK: I can't remember exactly what the question was and how I responded, but in general, I applaud Nintendo for their success. I think what they're doing is very important. They're trying to bring more people into the industry and -- objectively speaking -- I think it's Nintendo and Microsoft that are really generating the excitement for the industry. And that's important for the industry.

The fact that Nintendo and Wii have launched strong and that people who are not traditional gamers find excitement in the video game industry is a great thing for the business, and for us as well, since we're going to compete for that customer segment as well.

I don't view Nintendo as a direct competitor, simply because they're not trying to do the same things as we are on the higher end -- they don't have the same online aspirations as we do -- but Sony and Microsoft really need to compete for that customer segment if we want to get to the mass market and win this generation. Nintendo's certainly done a lot of great things. That's more what I think of as what we need to do a better job of as we go after that.

GS: Do you think that XNA Game Studio Express is a step toward doing that?

SK: Absolutely. Xbox Live Arcade, Game Studio Express, the content that we're building from Rare, the content from third parties -- at the end of the day, this business is about great content. If you don't have the content that inspires and excites customers, it doesn't matter what kind of services you put into Xbox Live, and it doesn't matter if you can actually execute PlayStation 3's Home. It's about content, and we've seen that on the platform that we've built on Xbox Live when Halo 2 released. That's when we saw the big jump in membership. When Gears of War launched, we saw another big jump. It is about content, and Game Studio Express has had over a quarter million downloads since it launched in December. We know there are going to be great ideas coming.

Dave Mitchell (via 4gamer.net)

DM: In no other platform is the gaming consumer going to have as much choice as on the Xbox 360. From the great triple-A content to the 320 games that Shane talked about, all the way down to what we talked about earlier with the "YouTube for games" -- where the consumer is going to have absolute breadth and variety of choices -- are just going to be astonishing. And that's what we're really focused on enabling with Game Studio Express, and very much complements what Shane is talking about.

GS: Speaking of Home, Microsoft is the last to anthropomorphize its interface. Is that something that you have any desire to do?

DM: We don't let the competition dictate what we are going to do from a strategy standpoint. I think we've been really clear about that. What Sony talked about yesterday is a big, ambitious vision, which is not too dissimilar to other big industry visions they've promised in the past.

The interesting thing that they've talked about there is that it's all about software. When you talk about trying to bring together YouTube, MySpace, The Sims, and Second Life, that's a massive undertaking.

It's interesting that they use the "home" metaphor, because if you want to build a home, you need a strong foundation. I don't see that today. Certainly I see that with what we've developed over the last five years with Xbox Live and the infrastructures we've put in place there, we feel really good about what we've done in terms of services that we've brought to consumers.

I don't feel any greater pressure today than I did two days ago to anthropomorphize the interface, and it's unclear whether or not that's what most customers want. Like I said, with six million members on Xbox Live, mounting that over Windows, we think we've got a lot to offer with the services and the interests we've got from that.

GS: Are you still helping fund games in Japan?

SK: Yes.

GS: Are the results of that going as well as you've expected? They seem to be doing better in the U.S. -- games that are funded in Japan seem to do better here than they do there.

SK: I think we're very realistic about our prospects in Japan. When we launched Xbox 360 there, we didn't say we're going to win Japan. We said we need to do better in Japan, and for a couple of reasons. One, it's a big market. Two, we know that in order to do more there, we've got to develop more great Japanese content from Japanese developers, and that's why the partnership with Sakaguchi is so important.

It's also important to do well there because there are great Japanese creators and developers. I think developers and publishers in Japan are looking at the success the Xbox 360 is having in the West with titles that came from Japan like Dead Rising and Lost Planet, and realizing that it's an important business opportunity for them.

That all feeds on itself, and I think that while our expectations in Japan are still very realistic -- Blue Dragon was a big success for us, and I think Lost Odyssey will be an important success -- those titles will also do well in the West.

Lost Odyssey

GS: Is Game Studio Express also going to launch there? I know Japan has an incredibly good independent games community that has not been tapped by the 360 yet.

DM: We've actually launched XNA Game Studio Express internationally, and that 250,000 download figure includes a pretty good contingent of folks in Japan that have downloaded, and all throughout Asia as a matter of fact. I can show you samples of what a Japanese game developer has done, picking this up and creating a very Japanese looking and feeling game based upon that.

SK: And then also the universities.

DM: Yes, we've got over eighty universities from eight countries that are teaching, including Japan. In Japan, we've got Iwatani-san, the creator of Pac-Man, extremely excited about getting into the possibilities of Express. As a result, when he retires, he is going to be teaching at Tokyo Polytechnic University, using Game Studio Express to teach game design to future game developers.

We also have the University of Tokyo -- the list just keeps growing in terms of Japanese university support of Game Studio Express, and localization for the Japanese language is also planned on the horizon as well, to expressly support Japan.

GS: Do you know if Bungie has a second team working on their episodic games?

SK: Bungie is a pretty big studio, and I think the way you should think about most studios is that there's a difference between production teams and creative design teams. A lot of studios have multiple design teams that are thinking of their next thing. Some of those things are known, and some aren't.

I don't think Bungie's any different. I know that we are working with Peter Jackson on the next installment in the Halo series and that we've had that planning going on, and when one production team is finished with Halo 3, they need to be ready to move on to the next thing. That's really how you manage the life cycle of a studio.

GS: How involved is Peter Jackson?

SK: He's very involved. There's great collaboration going on between Bungie and Peter, which is really fun to watch.

GS: He's kind of a crazy guy.

SK: You think so? I found him to be one of the most normal Hollywood people I've ever met, though he's from New Zealand, so that's could explain it.

GS: I've seen his early movies.

SK: He does have an interesting background. When I visited him down in New Zealand, I saw some movie posters for those. He's a big horror guy. He's a great guy -- he's in this for the right reasons. It's not about a Hollywood guy wanting to make games -- because there's plenty of those guys -- or a guy who wants to see games made out of his movies. He really wants to try to create something new.

GS: Now it's Spielberg versus Peter Jackson, so we'll see what happens there.

SK: Fortunately those guys are good friends. I don't know that they look at it [as a competition], and I wouldn't want to position it that way!

Peter Jackson

GS: Any plans for Zune and Xbox 360 interconnectivity in a bigger way?

SK: Nothing specific to announce, but the strategy and the vision for Robby Bach's entertainment device division is about connective entertainment and about bringing all forms of entertainment together via software, which is something we feel like we're in a position to do. Obviously Zune is part of Robby's division.

We've already built great digital entertainment integration directly into the Xbox 360, and also provided connectivity to your home media network through Media Center integration. I think it's logical that the Zune with those scenarios as they start to get more and more integrated in the future.

GS: Can you say what [Panzer Dragoon director] Yukio Futatsugi is working on?

SK: Mr. Futatsugi is working closely with Sakaguchi-san on Sakaguchi-san's projects. As an MGS Japan employee, he's working really closely on those projects. Those are the big things we're really working on in Japan.

GS: Thanks Shane!