Eurogamer: So what can Milo do?
Peter Molyneux: Milo can recognise the emotions on your face and the emotions in your voice. He can recognise certain words you say. You can have conversations with him, you can read stories to him. We're trying to bring all these things together. Some of them are tricks - I'll be absolutely honest with you - to make you believe Milo's real.
He can recognise what you're wearing. If he notices you've got dark bags under your eyes he will say, 'You look tired today.'
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Eurogamer: You said he only understands certain words. So presumably you can't have a conversation about the situation in Palestine?
Peter Molyneux: The number of words he understands is built up over time. For Claire [the lady who demoed a conversation with Milo during Microsoft's conference], it's something like 500 words.
But we haven't cracked the real problem, which is him understanding the meaning of it all. He'll give you the illusion he does that. The interesting thing is you can only talk to him when the Talk icon appears at the bottom of the screen. That's when he's listening to you; the rest of the time, he's not. He's listening to you because there's a context in which you can talk to him.
One of the journalists who came in before you had obviously read up on the Turing test. He asked Milo one of the questions in the test - 'Do you remember when we met yesterday?' Well, of course, we haven't cracked the Turing test. If we had, then applying it to a computer game would be the last of the solutions we'd use it for.