Dave McCarthy is the Head of Xbox Operations and General Manager of Xbox Services, meaning he’s been deeply involved in the lead up to the reveal of Xbox One X. We had a chance to sit down with McCarthy at Microsoft’s E3 event space in downtown Los Angeles and talk about a range of topics, from how the company plans to explain native 4K to potential customers, how Minecraft has influenced Sea of Thieves, and why the company’s press event had fewer big budget first-party games and timed downloadable content (DLC) exclusives.

Let’s start with the DLC.

This interview has been condensed and edited for clarity.

On the absence of downloadable content exclusives

We saw “Console Launch Exclusive” through the Xbox E3 presentation, but we didn't see what had become really common in the last five years: timed downloadable content exclusives. Is Microsoft is still pursuing these partnerships with third-party developer or did any of those games show have DLC partnerships?

So the launch exclusive terminology that we use basically means, in simple terms, it's either going to appear first on Xbox or only on Xbox. And we can provide the breakdown of that afterwards, if you want to see that title breakdown. All of the AAA blockbusters are going to be across the Xbox One family of devices. They're going to play great on One, they're going to play spectacularly on Xbox One S. And they'll play even better on Xbox One X overall.

To clarify, it sounds like you're saying you're not focusing on third-party exclusives with DLC and that it's more about the best place a game’s going to run is on the Xbox One X? 

We firmly believe that the best place to play these titles, all these titles, would be on the Xbox One X. 

And no third-party exclusives for DLC?

The only exclusives were the ones we shared onstage yesterday. 

Will Windows 10 get Xbox backwards compatibility?

You just got the first taste yesterday of what we're doing with original Xbox compatibility. We'll have a lot more titles obviously to announce. I was saying to somebody, the audaciousness of supporting three generations across the Xbox One family of devices. The first couple of times that Phil [Spencer] brought it up in the leadership team, you got kind of the nervous chuckles around the table, like oh, he's probably not serious when he says, hey, wouldn't it be cool if. He stuck with it, and when he sticks with everything in the leadership team discussion, they're like okay, I guess we're going to make this happen. So it was really cool to see us release the news on Crimson Skies yesterday as the first one, but there will be more to come! It's the same team that actually worked on the Xbox 360 backward compatibility overall. So these are our best and brightest compatibility minds looking at things. So watch this space! 

How Microsoft will distinguish Xbox One X’s 4K from the PS4 Pro

Seeing is believing, obviously, with a lot of this stuff, right? You see the difference with the weather effects and the heat coming off the car and the details [in Forza 7]. You know, if Anthem looked great from Bioware on the amazing 4K screen in The Galen Center yesterday. So a little bit of it is seeing is believing. But I get back to more of this: you're going to notice a difference on your existing games, you're going to notice a difference where developers in both first-party and third-party do these free 4K upgrades that we noticed yesterday, across a large number of titles overall. And then when somebody's taking advantage of the frame buffer and you know, Dolby Atmos, and the wide color gamut, and all of the bells and whistles, it's going to be hard not to notice the difference. 

Are you concerned that, right now, a lot of people don’t have 4K TVs? Even if they do, things don't probably stream in 4K from their cable box. Maybe they aren't even watching 4K on YouTube because of their wireless connection. What steps are you taking to put people in these environments where they're going to see what you’re describing? 

Sure, right. There will be obviously some retail partnerships that we look at. Demo experiences that we'll do. I wouldn't say from a 1080p TV perspective you're going to be all that disappointed either, right? I mean you have automatic super sampling from the Xbox One X to your 1080p TV. It's still going to look pretty damn amazing. In fact, at home, I've been running this setup. We've had the kits for a couple of months now, and it's remarkable how I literally took the Xbox One X home, I put it on top of my Xbox One S. I pulled the HDMI cable out of the S, pulled it into the S. I literally re-synced my controller, using the one button touch. I had all my games on my external hard drive, plugged it in [to the X]. There was no install time. It was all running. 

And I was sitting with my son and I didn't even tell him what the box was. He turns to me within five minutes and he's like, "Dad, what's happening with this box? Why is it running faster? Why does my game look different and better overall? And I said, "Well, I can't tell you right now, son. But--" 

How Xbox One X will improve older games without custom patches

Can you explain how a game made by a third-party developer that doesn’t have Xbox One X will be improved? What type of differences specifically can we expect to see on the Xbox One X?

So you'll definitely see faster load times, because you've got a faster hard drive than Xbox One S.  Most titles are doing some notion of dynamic frame rate and their titles and if they will, you will see, unless they're locking at a certain number, because certain developers make the choice to do that, you're going to see a smoother frame rate. You're going to see better texture filtering, with them doing nothing overall, and then you're going to see most of them make use of dynamic resolution in their design right now. So you should see the highest possible resolution of textures in the game as well, without them touching a thing. All of those things will be true without them touching a thing.

So on older games, if the frame rate isn't capped, we’ll see frame rate improvements?

Yeah and consistency, for sure. Yeah, exactly.

What to expect from Microsoft’s mobile gaming

Is Microsoft working on mobile game projects anymore, or is that on the back burner? Will we see Play Anywhere games on smartphones?

I mean in addition to Minecraft, some people kind of laugh at this, but Solitaire is one of our huge Live drivers on Windows 10 right now. I think it's moving into other interesting areas as well. You know, Mixer had a huge presence in the show yesterday, right? We talk about this split between the hour spent watching and playing games overall. The mobile client for Mixer's huge for us overall, in terms of consumption. Again, Live links that altogether overall. So I think you'll see more of us doing stuff across devices with Live at the center of all that we do and Mixer is the next big push as part of that.

Why they didn’t show more big budget first-party games  

Dave McCarthy: Franchises like Halo and Gears of War are still hugely important in our ecosystem. We made a really conscious decision with [the E3 event] and we were linked in arms throughout the leadership team on this: that we wanted to show every type of game for every type of gamer. And that was different from what we've done before, but it was a really conscious decision about where gamers are right now in the landscape. There are some that value 4K showcases. For some, community games really speak to them. [Showing] PlayerUnkown’s Battlegrounds was a big deal, right. I think console users — there's a lot of them out there that don't understand how big Battlegrounds is going to be. And it is, it is a huge deal, it's such an innovative format that really sucks you in when you try it.

We needed to create space in our briefing for that. We needed to create space for games around the world. We consciously chose to go around the globe a bit. And we wanted to showcase indie developers with titles like Cuphead and Artful Escape.

It's just a really conscious decision for us to go across the board and show the variation in the gaming landscape right now, which I think Xbox is well-positioned for because we do have the strong service for devices — because we do have Windows 10 in the same company — and we work closely with the team to make stuff happen there.

So it's a matter of consciously saying, hey there's a story we want to tell, that we're offering a ton of choice, regardless of what kind of gameplay type that you gravitate to.

How Microsoft is applying Minecraft’s model to other games

The Verge: A couple of years ago, a number of Xbox employees spoke with me about Minecraft as a template the company could learn from, and build upon. Moving forward to the present, are there any examples of Microsoft is building off the Minecraft template with a new project?

Dave McCarthy: I would say some of the learning from Minecraft has even made its way into Sea of Thieves. So when we take a premiere studio like Rare “offline” for the past couple of years, there's been a lot of good learning from the team back and forth, especially around things involving the community in design. So what I really like about what the Rare team has done, they've really embraced this using our insider program to bring the community onboard. They're regularly giving feedback across both PC and our Xbox One panel of devices on how to design the game, what those sort of multi-screen considerations are. They're both going to be doing some interesting and innovative things with Mixer, both from an interactivity standpoint and things like co-streaming that have come out out there. So I do see it filtering into some of the studios, I think we'll see more around the idea of in-game marketplaces, I think Minecraft is really leading the way there overall. So it really has been a good education piece for us, but I think it's really interesting to see how it affects new IP development and I've seen some really neat interactions between the teams there.