"My most important job is to make sure Microsoft Game Studios has a competitive advantage as a first-party versus Sony's first-party. That is my number one job, and we will gladly go head-to-head with Sony's first party with our portfolio, with our titles, with our performance and I think we're going to make a huge difference in winning this generation. Again, it goes back to our objective as a company; our objective is to win this generation and we recognized a long time ago that the third-party environment is changing because you're not going to see as many third-party exclusives and in the past most of those benefits have actually gone to Sony through installed base etc, etc. That's changing now going forward so if the third-party playing field is basically neutral, which I could honestly look at and go "it's neutral," it's going to be up to the first parties to differentiate the platforms from a content standpoint. That's what we've been totally focused on the past three to four years and I think you're starting to see the fruits of that. Gears of War is a great example of that. We have a ton of respect for independent developers that are out there that work with Sony, but when it comes to going head-to-head with them as a publisher, we welcome that conversation."
Also, on the rumors that new 360 hardware is coming:
What I will say is that we're always look at how we can improve the entire experience, whether it's in the hardware or in the services and software itself. I think it's a lot easier to address the hardware changes that customers would want and that we would want as well than it is to actually deliver the software and service innovations that we have, particularly on Xbox Live. So I look at that as saying, "Of course we're going to listen to customers." When we launched Xbox Live Video Marketplace last year, which I think was a great innovation, it's been super successful and very popular for us on Xbox Live. Of course, customers are saying, "Hey, it'd be nice if we had a larger hard drive with all of this content that we've already been downloading on top of Video Marketplace and now you're adding to it." So that's just one example of where, "Ok, gosh we've heard that people would like a larger hard drive and things like that." Those are things that we're always looking at, and like I said, that stuff is much easier to add to than to think about all of the software innovations that our competitors would have to do to be comparable to what we do.
Tons more: http://biz.gamedaily.com/industry/feature/?id=15529