This is a huge step into AI utilizing such technologies, the next step would be to integrate said character (Milo) with the Operating system, being able to have him find websites for you, or files for you, which you touch and they open.
This stuff is amazing and REALLY could be powerful stuff!
What is required for AI,
The ability to "think" or execute processes by it's own
The ability to recognize shapes and objects
The ability to communicate with another item, or person
The ability to recognize it's user or whom ever is in front of it.
The ability of control and growing it's knowledge database, also known as Learning!
If Microsoft play their cards right, this Milo, this VR game could be a massively serious step towards ultimate computer user interfacing and improve the whole world's standard of computer operating!
I am seriously impressed, and would love to see said item grow to such a point that it could surf the web for us, recognize what is REAL information, and what is bull----. Think about it...
A computer that can research complex tasks for us, and present the correct answer... A computer that could answer MANY near impossible questions. A computer program with the capacity to learn everything, that anyone has ever known and put on the net. This is almost unbelievable to the extent of the jump towards creating a real computer program that can be so much like a real person, but without the physical limitations!