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Just before today's launch announcement, we interviewed Albert Penello, Director of Global Marketing for Microsoft's Xbox 360, and asked about the processor inside the Xbox 360 Elite, upcoming partnerships for the Marketplace Live download service, and future plans for IPTV.


Most of our conversation was about denying 65nm process chips and quieter disc drives, but he did confirm that new marketplace announcements would be made later in the week. Is that related to the Netflix speculation we were toying with yesterday?

Gizmodo: Will there be a new processor inside the Xbox 360 Elite, perhaps one using a cooler-running, 65nm process?


Penello: It's interesting. There's been a lot of questions about that, and the answer is, the insides of the boxes change all the time. There's nothing specific going on with Elite regarding anything like that. We make changes to the boxes all the time, just as part of cost reductions and continuous improvement, so no, there's nothing really interesting to talk about there.

Gizmodo: There was talk about how the processor was going to be cooler-running and perhaps quieter.

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Penello: No. we haven't announced anything like that.

Gizmodo: So it's pretty much the same innards, except for that HDMI connectivity and a 120GB hard drive?

Penello: Right. It still plays all the same great games that the core system plays and the regular Xbox 360 plays. It's just the black finish, the HDMI and the upgraded hard drive, right. And obviously it also includes the cable, which we feel is important—to make sure that no matter what HD interface you have on your TV, when you take the console out of the box, we provide you with the cable that you need.

Gizmodo: That's good, a lot of big box retailers are selling those HDMI cables for about the same price that's the difference between the regular Xbox 360 and the Elite upgrade.


Penello: Yep. Exactly right. HDMI cables are pretty expensive. I would say the average price is about 50 bucks just for the cable.

Gizmodo: Is this same release date going to happen with the outboard hard disk as well?

Penello: Yes. It'll be out at the same time, as well as the black accessories.

Gizmodo: So pretty much what we're going to report is that all the rumors are true.


Penello: Yes, there are a couple of things that they didn't get. They obviously didn't know about the inclusion of the cable, and there are a lot of questions about whether it was going to be a limited edition or not. But yes, a lot of the stuff that I've seen was pretty close.

Gizmodo: You can't give us any sort of information about the future of the processor and how that might be upgraded?

Penello: Again, the thing about that is, it's not going to really be particularly newsworthy. Components have changed since we launched it and will continue to change. There's no upgrade of the processor. We might be doing cost reductions and things like that, but it's nothing that the consumers will ever notice.

Gizmodo: You did change the DVD drive, didn't you, so that it's quieter?

Penello: What's interesting is, that was a rumor that was going around that's also interesting in its propagation, but the reality is, we have several different manufacturers of DVD drives, and people claim that they believe that they've heard ones that are quieter, which is interesting, because I don't really know anything about that.

Gizmodo: That's not true, then? You're denying that?

Penello: What I'm saying is people seem to have observed quieter drives, and I obviously can't say that they're not observing something, but what I am saying is we have multiple vendors of drives. There isn't a louder drive and a quieter drive.


Gizmodo: So one week you might have one in there, and then another week you might have another, depending on availability?

Penello: We have a lot of different components in the box. There are 1,500 different components in the box. I'm really not trying to be flippant, because a lot of the sites are sort of claiming that there is these specific components that are going to do specific things, and the truth is, there are infinite numbers of combinations of the console in terms of components and who they're manufactured by.

Gizmodo: That 120GB drive in the Elite and the stand-alone drive is big enough to hold a lot more HD movies. Will there be more downloadable content with the Xbox Live Marketplace service?


Penello: There's going to be a couple of other announcements coming later in the week around Marketplace and some new partnerships we have there. I can't really share a lot of the details right now, but there's going to be some more exciting news around Marketplace later in the week.

So there's a lot of excitement around HD right now, particularly around the success of Xbox Live, and the digital distribution that's really blown us away. We had good expectations for it, but it's exceeded our expectations. There's been 135 million downloads from Live Marketplace, and 70 percent of the people connected to Live are downloading something.

Since we launched the service, there's been a 4x increase in Marketplace activity since Video Marketplace launched. People are spending about 40 percent of their time using the Xbox 360 for a lot of these entertainment-type experiences like music, movies and TV. So Marketplace has been a tremendous success, and something we're very excited about.


It was important for us, and one of the pieces of feedback we previously had was that for heavy Marketplace users, our existing storage capacity was not exactly where people wanted.

Gizmodo: Tell us more about the partnerships.

Penello: It depends on a lot of things coming together. We'll get back to you with more on that. We're not making any announcements right now, but there are going to be some later this week.

Gizmodo: It must have something to do with IPTV, right?

Penello: No, it's going to be an announcement around partnerships that we're going to have coming onto the Video Marketplace service.


Gizmodo: When will we be able to record live TV and have some of the same networks that are on cable using Xbox 360?

Penello: That's the announcement we made at CES around the IPTV and Xbox 360.

Gizmodo: When is that going to be available? How's that going?

Penello: What we're saying is that we'll be in trials later, late in the summer, and possibly consumer rollout in the fall, but we haven't made any...what we were really showing at CES was the two technologies, the IPTV technology which has already been announced, and then we actually had it running on an Xbox 360. We haven't really announced any specifics about when that's rolling out. Of course, IPTV was already rolled out last year in many markets.

Gizmodo: How's it going with games on the 360?

Penello: It's really about the games this year. This is going to be an unbelievable year for games. We feel really good about our game lineup. We've had the number one title across all platforms for four months in a row with Gears of War, Lost Planet and just most recently, the release of Crackdown. We have multiple million units sellers on the console, with Call of Duty, Gears of War, Ghost Recon, Advanced War Fighter and Madden. So we've got a really great ecosystem of titles out on the market right now.


There's also a sea change going on around exclusivity, and I'm sure you're familiar with the recent announcement around Devil May Cry coming to Xbox. Many franchises that were previously associated with the PlayStation brand, like Guitar Hero, Grand Theft Auto and Virtual Fighter are all coming on Xbox.

On top of that, we have our own exclusives, with things like Forza 2, Mass Effect, BioShock, Splinter Cell, and obviously Halo 3. So, for us right now, it's really important to emphasize, because there are a lot of discussions and a lot of things going on around Xbox Live and Video Marketplace that are really exciting, but it's important for us—it's still all about the games, and clearly this is going to be an amazing year for games. I don't know where people are going to get the time.

For more, check out our lead story about the Microsoft Xbox 360 Elite:
100% Official: Xbox 360 Elite Moves from Fanboy Wet Dreams to Reality