In an interview with Venturebeat Microsoft's Zulfi Alam went into detail about the work on the Xbox One controller.
"We looked at concepts like adding displays to the controller. We looked at concepts like adding smell. We built small slugs of different types of smells that could actually come out of a controller. Like, as you walked through a jungle, you'd smell the flora..."
Everything from small screens to speakers were tested, but the result ended up being that the user lost focus, and that was something Microsoft wanted to avoid.
"I don't want to go into specifics, but it's over $100 million for sure. Between the tooling of the device, the investments we made in process technology, and the engineering work that went into it, we invested a lot to get this thing right."