XNA And The Sistine Chapel
During the keynote you also announced XNA Studio. Do you think that tool will help keep the spiraling costs of development down?
Well, let me tell you a story about another guy who moved from the 2D era to the 3D era to the HD era once. It was Michelangelo. He started painting on these little canvases. Then he graduated from 2D to 3D, and he started doing sculpture. One day a guy comes in and says I want you to paint my church. And he said, "I guess you haven't heard, I gave up on painting. I'm a 3D guy now. You're talking to the wrong guy, and I never did exteriors." The other guy says, "come on, I'll buy you a cup of coffee. I want you to paint this." And Michelangelo, for probably the first time in his life, had his imagination intimidated by the task ahead of him, when the Sistine Chapel was presented.
And he said, "I need scaffolding, I need workers, and I need this, and I need that." It was no longer a simple painting, it was an enormous construction project. That's what game developers are facing in this HD era. They are jumping from something where they could do it themselves, they could bring in the marble and get the chisels out, envision it all and execute it themselves. And now they have this army of people they need to put it together.
In Michelangelo's case, if he were building the scaffolding, he wouldn't be focused on his vision, and that's what game creators are doing today. They are focusing on the scaffolding. So think of the XNA Studio as the scaffolding, the palette, and the paint and everything else. We are bringing everything there, so you are just focused on one thing.
Now that has a cost - it is going to cost more. You will have an army of artists working on things, but you are not paying highly specialized artists to do things they are not necessarily good at. And that holds them back from doing what you want them to do. That's where we are right now. XNA studio is going to be very, very important.

In the next part of the interview we will ask him even more of your questions.
That's it for part one. Keep checking back to tomshardware.com for the next part of the interview, where we ask him more of your questions about Xenon, micro-transactions, and developer feedback on his recent announcements.