Just finished a huge breakfast with Chris Early, studio manager for Microsoft Casual Games. Heck of a nice guy. He oversees the Xbox 360 s Live Arcade, MSN Games (formerly known as The Zone) and MSN Messenger games.

The breakfast was almost two hours long, mostly because I was hyped up on tea and the half a cow that was stuffed into my omelet in the form of bacon. I also had plenty of time to kill because the Game Developers Conference is just getting underway for us non-developer types.

I taped the conversation we had, meaning I m going to half to transcribe it before I can pull out specific quotes.

But in general we talked about the importance of casual gaming for Microsoft and gaming in general.

Early sees casual games as sort of a petrie dish for game development. Because of the low cost and quick turn around developers can take greater chances.

I m a huge fan of the whole Arcade Live idea. I think it, and systems like it, could help reinvigorate creativity in the industry.

One thing that worries me is that perhaps Arcade has been too success for its own good.

I asked Early if that was a concern. Is it possible that Arcade s initial and tremendous success could cause Microsoft to focus on only the titles they think will work in this particular environment and once more lock out unique and original games?

Early agreed that it was a concern, but said Microsoft s internal goal for Arcade remains unchanged.

He added that while the initial focus for Arcade has been on games that would appeal to hardcore gamers, Microsoft hopes to broaden that focus to include educational titles and games for children.

Early also mentioned that Microsoft Points weren t developed just for the Xbox 360. Apparently, this was already announced long ago, but I somehow missed it.

What that means is that down the line you might be using Mpoints to buy stuff online for your PC. Can you say Steam?

Actually, Early sort of avoided talking about the possibility of Microsoft getting whole hog into the digital distribution business. But I can t imagine they wouldn t.

I wonder if they could get something up and running in time for Vista?