When Bill Gates, founder of Microsoft, took to the main stage at the Game Developers Conference in San Jose, California on 10 March 2000 to announce the company’s long-rumoured entry to the home video game console market, he was full of hyperbolic promise. The X-box (as it was written at the time) was to be a system three times as powerful as Sony’s PlayStation 2, transforming the way in which we consume media in the living rooms of our homes.
It was bullish enthusiasm that few industry watchers shared. Sony was at the height of its success, having clambered over rivals Nintendo and Sega to lead the video game industry into the new century. Each of these three console makers had its own niche on the gaming landscape: Nintendo as purveyor of primary-colour game worlds that fired our childhood imaginations; Sega as the creator of adrenaline-rich arcade thrills; and Sony as the mainstream giant in whose slipstream the others were pulled. There appeared to be no room for another to muscle in on the bright-lit frisson of home video games, let alone a developer of routine office software.
The idea for the system came not from the top, but from the middle of the corporation. In the run-up to the launch of Sony’s PlayStation 2, a number of Microsoft engineers became concerned at the Japanese company’s claims that their new console was set to wipe the PC from the home. Ted Hase, Otto Berkes, Seamus Blackley and Kevin Bachus came together to design a home games machine, one based on PC architecture, but that could compete with the traditional games consoles in the living room. Originally known as the DirectX-box, the project took off when James ‘J’ Allard joined the group. An avid game player Allard was sceptical that an ‘eMachines for games’ device, with a custom version of Windows would be able to compete in the console market. He argued that the console shouldn’t run Windows, the company’s ubiquitous operating system, but instead something tailored to the machine’s strengths. Likewise, it was Allard who maintained that the systems should ship with broadband-only Ethernet connections, sidestepping the dial-up modem users to ensure that online multiplayer gaming was fast enough to allow for competitive play.
While Allard is often cited as being the ‘father’ of Xbox, in truth, there were many creative minds responsible. It was Ed Fries who managed the team that would design and build the system over a course of 24 months, while it was Seamus Blackley’s experience in game development that convinced game makers of the system’s potential. A video game console is only as good as its games, and without Bungie’s exclusive launch title Halo: Combat Evolved, a game that brought about a sea-change in console-based first person shooters and added legitimacy to Microsoft’s bulky box, the story may have been very different. But even with a skilled team of visionaries behind it, Xbox’s place at the console gaming table was, to a large extent, paid for. Following the system’s launch Microsoft fast muscled into second place in the console arms race, but at a cost to the wider company of $6 billion in losses, a financial punch that few corporations could take.
In part, the long haul success of the machine was down to Xbox Live, an online service that allowed subscribers to play online games with others around the world and to download new content directly to the system’s hard drive. While Sega’s online Dreamcast service predated Xbox Live by some margin, Microsoft benefited from a proliferation of faster internet speeds, enabling games such as Halo 2 to be played at a competitive level remotely.
The system suffered in its later years at the hands of modders, who circumvented Microsoft’s system protections to install their own operating systems and run pirated games. But arguably modding helped build grassroots support for the machine, which by the time of its discontinuation in late 2006 had sold 24 million units worldwide. In five short years Microsoft established itself as a leading developer of console hardware, finding success through a combination of deep pockets, tall luck and a clutch of strong games.