I know it's under wraps, but you guys are probably feeling pretty okay about Unreal Engine 4.

TS: Yeah, we're starting a behind-closed-doors showing of the engine to developers; this is part of our very early ramp-up cycle. We went through this cycle with Unreal Engine 3 starting in 2003 and 2004. At some point we'll make public announcements and ramp up to the point where developers are shipping games, but it's very early right now. We're aiming very high, and the intended platforms this is aimed at haven't even been announced.

So here's a theoretical question for you -- even though I'm sure that this situation has happened in real life. Say Microsoft or Sony come to you and ask, "What do we need to provide you, with our next generation of consoles, to help you make games better?" What would you tell them?

TS: Really for us, there are two things that are going to be essential for the console market going forward. One is that to bring together all of the features and expectations that gamers have built up from all the great platforms out there today, right?

There are great games with Facebook integration that enable you to hook up to social network sites and find your friends in there. To be able to do that from next generation games and consoles will be really valuable.

To be able to go and easily buy and download games like we do in the iOS App Store on future consoles will be incredibly valuable to us as developers, and make it that much easier to get our games out without over-reliance on manufacturing a whole bunch of pieces of spinning plastic to ship to consumers.

So having all of the things that you expect from the game industry as a whole and the best that's been done elsewhere, and to bring that together on a console platform is really important. We saw with the current generation, we went from consoles as a little fixed, TV connected device to an online network of gaming devices where you can play with your friends over the internet, get updates, even watch movies on Xbox 360.

We love that, and I think a huge portion of the business opportunity in the next generation is extending that concept even further forward. So this is a mainstream computing device that hooks into all of your social circles as well.

Number two is raw performance. The thing that separates consoles from FarmVille is the fact that consoles define the high-end gaming experience. When you look for the best graphics available in the whole game industry today, you look at Xbox 360 and PlayStation 3, and those games are the best out there, bar none. And so the big opportunities for future consoles is to bring that to an entirely new level by delivering a dramatic increase in raw computing power.

We measure that in floating-point operations per second, and now we talk about teraflops -- trillions of floating-point operations per second. What we want is as many teraflops as is economically possible to deliver to consumers, because that enables us to create the best quality experience as possible, and that will drive people to buy a new machine. That's a big challenge with a new console -- that you reset your install base from millions and millions of what you have today with current consoles back to zero. Then you have to convince everybody to buy the new hardware.

To do that you need awesome games that provide a level of graphical fidelity that people have just not seen or even imagined previously.

Developers have told me that they don't want a completely open console, but they were hoping that next-gen consoles would be more open than current consoles. A lot of new games are going to rely on communities, and being able to react to and interact with players more easily, through a console. But there's a decent amount of bureaucracy involved when dealing with consoles. Should the new consoles be a little bit more open than they are now?

TS: Well, you have to draw a fine line in there. If you look at the most open platform today -- that's Android -- Android is anarchy. It's extremely hard to ship a game that actually works on a large number of Android devices, because there's so much variety and so much openness and a lack of cohesive certification process for applications. We do not want open as in Android -- that would be a disaster for the business.

So you certainly want an ecosystem that's curated. The question is, how much do you want it to be curated? iOS is an interesting medium point in between the anarchy of the world and the highly-curated approach of Xbox 360 and PlayStation 3, where Apple certifies all apps, they verify if the app isn't terribly buggy, but it's a less rigorous process than we have on consoles today.

I think it's an interesting direction, especially for smaller products, because it reduces the overhead of bringing something to market. I think you certainly want something somewhere in the spectrum between current consoles and iOS, in terms of curation. Somewhere in there, so it's a healthy medium.