IGN: Why did you decide to offer two SKUs, isn't that confusing for the consumer?

Peter Moore: If there is a lesson I think we have learned in the previous generation is that gamers want choice. Some gamers want simply to play a game and have none of the, in their estimation, some of the frills of the gaming experience, and price becomes paramount for them. At the same time, we believe it's important to offer them the ability to set up and upgrade. But if price becomes the key factor, we wanted to have that as well for as a choice for the consumer. $299 is a spectacular price point. And certainly in Europe in particular, I think we learned our lesson, that 479 euros and a March launch was not the optimal mix of what was going on.

IGN: How do you see the split between the two prices working out? Will it be different in North America than in Europe?

Peter: I think that a large majority of people all over the world will be buying the Xbox 360 systems ($399). Europe is a much more price-sensitive market, in particular continental Europe, where the primary mode of distribution becomes what is known as the hyper-markets. It's incredibly important for us to offer that 299 euro price point. We've got great aspirations, as you know, to build critical mass in this next generation, and doing that without offering a competitive price point in all markets is something that we thought would be a negative.

At the same time, we wanted to offer a value package system with the Xbox 360 that gave what we believe every next generational gamer is looking for, the ability have storage, to have videos, music, to have photos, great games in minimum 720p, and the ability to use wireless technology, everything we've shown in all the demos we shown you, and everything costs money. But the ability to have a hard-drive alone costs $100. So we really think the consumer will recognize the value and step up. But there are some people who just don't want to do that. They may upgrade later on, and that is what the core system is all about.

IGN: Do you think that gamers will by more of one SKU that the other? Do you have research that proves the higher price point is going to take off?

Peter: My firm belief, and in all of the discussions I've had in the last couple days with the analysts who are starting to look at this and tear this thing apart, is that the great majority of sales will be at $399. That is huge value for the money. We absolutely project that the Xbox 360 will outsell the Core System in the early going. Over the life cycle that balance will probably change, but for $399, it's phenomenal value.

IGN: Will the hard drive come pre-loaded with Halo and Halo 2 on it?

Peter: We want, out of the box, a high definition experience for consumers, and the hard-drive will have content loaded on it at launch. It will contain video, not necessarily related to videogames. I can't get into the details, we're just weeks away from making those announcements, but they will be pre-loaded, no charge for it. We'll be working with partners to ensure its entertaining to the demographic, and that's very important.

We have no plans to have Halo or Halo 2 loaded on the hard drive right now. For us, I believe, we need to focus on high definition experiences. Halo 2 is arguably close to high definition. Halo was built in standard definition, as you know, but the idea of putting stuff on the hard drive is to have an instant, out-of-the-box experience in high definition.

IGN: How do you like the wireless controller?

Peter: Having spent the last three nights with a wireless controller, sitting back 30 feet from the TV almost in a different room, I love it. The ability to turn on your console from the wireless controller is one of my favorite features because now I don't have to move one iota off the couch anymore.

IGN: In what way will you work with third-party peripheral companies to create controllers, memory cards, and other third-party products?

Peter: The quality of the current generation of peripherals for us has been like, if you will, the Wild West. It has not been, I believe, that of a quality or consistent experience. So we are trying to get a better grip on that, quite frankly.

IGN: What's the launch date?

Peter: As you know, we have yet to announce a launch day or date in any territory. We're saving that information for a later date. It's important for us from a strategic standpoint to not reveal that date to our competitors, but we're gearing up and we're on schedule for a holiday launch this year.

IGN: Surely, you know how important launching prior to Thanksgiving is in North American. The Xbox 360 isn't going to launch any time after that date, which is the unofficially kick-off to winter hoiliday shopping.

Peter: Thanksgiving is very important to us, in the US. That's the only country to celebrate that particular holiday, but that time period is very important. Some people say that the holiday season starts the day after, while others say it's early December. The point is we're not ready to reveal that date yet, but when we do you'll be the first to know. We can't talk about it yet.

IGN: What is the status of Perfect Dark Zero? How is that looking? Is it ready for launch?

Peter: Well, I brought home a beta kit last night and I played it for three hours last night with my son, who's a huge GoldenEye and Perfect Dark fan. It's intuitive, it's looking beautiful, and it's come a long way since we showed it at E3. Rare is doing an excellent job with that one. The framerate is solid, and it's good fun. Of course, it's a different experience than Halo or Halo 2 are, but in comparison, you'll be able to do things online with that game, involving many more people, than you could with Halo 2. I can't say anything more than that."

At the same time, we wanted to offer a value package system with the Xbox 360 that gave what we believe every next generational gamer is looking for, the ability have storage, to have videos, music, to have photos, great games in minimum 720p, and the ability to use wireless technology, everything we've shown in all the demos we shown you, and everything costs money.

Peter:At the same time, we wanted to offer a value package system with the Xbox 360 that gave what we believe every next generational gamer is looking for...

Peter: As you know, we have yet to announce a launch day or date in any territory. We're saving that information for a later date. It's important for us from a strategic standpoint to not reveal that date to our competitors, but we're gearing up and we're on schedule for a holiday launch this year.