Thinking Outside the Xbox: The History of Microsoft in Video Gaming

(Written as of 2014)

By the end of the fifth generation of gaming, the two dominant forces in the industry were Nintendo and Sony. Nintendo, by that time, had lost their number one spot, following Sony’s PlayStation outselling the Nintendo 64. In the early 2000s, the sixth generation of gaming came about, with Nintendo releasing the GameCube, and Sony releasing the PlayStation 2, which would later become the highest selling console of all time. Another long-running company, who unfortunately failed to make as big an impact in the sixth generation was Sega, as many gamers chose to opt for the PlayStation 2 ahead of the Dreamcast, which although an excellent console with an already decent library of games, could not play DVDs, which were becoming evermore popular at the time, as VHS tapes had become well and truly obsolete. But little did they know of the level of competition they would soon be faced with on the release of a new fourth competitor, when Microsoft released their home console back in 2001 in America, and 2002 in Europe and Japan; the Xbox.

It all began in 1998, when Otto Berkes, Kevin Bachus, Seamus Beakley and Ted Hase of Microsoft’s DirectX team disassembled a series of Dell laptop computers in order to make a prototype video games console based on Microsoft Windows. They hoped to make this console in order to mainly compete with the PlayStation 2, which gamers seemed to be aligning with in favour of PC games. The combo approached Microsoft’s then head of game publishing, Ed Fries, and plugged what they had come up with, under the name of the DirectX Box. Fries was lukewarm to the idea, and decided to support it. The name of the console was shortened to the Xbox some time during the early stages of development.

However, Microsoft’s marketing department were not at first adamant about the name Xbox, and suggested many alternatives; among them being the MAX (the Microsoft Action Experience), and the AIO (All In One); that last one, in particular, being a prelude to the ideas behind the Xbox One’s marketing strategy, interestingly enough. However, further marketing research showed that consumers favoured the name Xbox over Microsoft’s other suggested names, and thus it finally became the official name of the product and brand.

The Xbox would actually be the second console produced by an American company since the Apple Pippin, which was discontinued in 1997, which followed the release of the Nuon in 2000, co-developed by Samsung, Motorola and Toshiba. It was also the first time that Microsoft had looked into releasing a home console since they had collaborated with Sega to create the Windows CE add-on for the Dreamcast. I suspect that America’s unwillingness to release many gaming consoles had a lot to do with the video game crash of 1983, which almost finished the industry. Due to a number of factors, video games were no longer seen as a viable form of business, and when the original Nintendo came out, gaming was a much more casual interest in America than it had been throughout the 70s and early 80s.

Since Bill Gates first publicly announced the console back in 1999, it was continuously delayed. But Gates was obviously desperate to get this effort right, as he expressed in an interview that gaming/multimedia devices were the future, and were essential for multimedia convergence at the time. He even suspected that if they didn’t release the Xbox and had not looked into console gaming at all, Microsoft could have very well faced falling behind their main competitors; Apple.

The Xbox was officially announced on March 10th 2000, at the Game Developer’s Conference, and it got audiences extremely excited ahead of its release, being impressed with the console’s staggering level of technology and number of features. It was at this time that sales of the Sega Dreamcast started to fall and the PlayStation 2 was released in Japan. At Las Vegas’s Consumer Electronics Show in 2001, the Xbox was unveiled to the public by Bill Gates and a celebrity guest, professional wrestler, The Rock. The release date of November 15th, 2001 was announced at the E3 conference the same year, along with the reveal of most planned launch titles, such as Dead or Alive 3, Project Gotham Racing, and the future blockbuster, Halo: Combat Evolved.

Microsoft decided to delay the release of the game in Europe and decided to first release the console in Japan, due to video gaming being considered a cultural phenomenon there. But despite this, the console was still more of a commercial success in Europe, following its release in 2002.

As of may 2006, the original Xbox sold had over 24 million units worldwide, making it the sixteenth highest selling video games console of all time, ahead of many of Sega’s previous efforts, including the Master System and the Game Gear. The best selling game on the console to date is Halo 2, which has since sold over 8 million copies. Although Sony ultimately came out on top with the PlayStation 2 in the sixth generation ahead of the both the Xbox and GameCube, Microsoft were never far behind at the time. In addition, they had big plans for the next generation, and felt as if they could continue to compete with Sony with the Xbox’s successor, the Xbox 360.

Going through another array of alternative names, such as the Xbox Next and the Xenon, development started on Microsoft’s next console as early as 2003. In February of that year, planning for the so-called Xenon software began, with the project being overseen by Microsoft Vice President, James Allard. In a bid to increase third-party support for the console, Microsoft held an event attended by 400 developers in Bellevue, Washington, whist they also recruited former president of Sega of America, Peter Moore. Later on in August, ATI signed on to assist in the console’s hardware development, producing its graphic processing unit. After a deluge of hardware issues and the revelation that IBM had hidden from Sony that the Xenon software used a slightly modified version of the PlayStation 3’s Cell Processor, the Xbox 360 was launched in late 2005 in the US, Canada, Japan and Europe.

Although the console, since before release, was in high demand, it was in short supply. The reason for this was because of an unusually high rate of hardware failure. Many consoles were returned to Microsoft as damaged or defective; the most recurring problem being the fabled Red Ring of Death, which indicates a general hardware error. This naturally led to Microsoft having to repeatedly re-think they’re warranty policies, and has also led to Microsoft releasing a wide variety of different models of it. At first, there was the Xbox 360 Core System. Then there came the Arcade edition, the Pro edition, the Elite edition, and then finally, the Slim edition. But at first, the rate at which the console failed was enough to raise a great amount of eyebrows. Many unusual and impractical techniques to fixing the Xbox 360 were also broadcast across YouTube in a bid to combat these issues, including wrapping the entire console in a towel and powering it on for ten minutes to loosen the solder joints and establish a better connection. But despite Microsoft’s initial issues, the Xbox 360, whilst losing out to Nintendo’s Wii console, outsold the PlayStation 3 and has since become the sixth highest selling console of all time, selling over 80 million copies worldwide. But what I found to be a surprise is that the best selling game on the system was actually Kinect Adventures, which has sold over 18 million copies, being bundled with the Kinect. Wanting to even further capitalize on what success they had garnished with the Xbox 360, The Xbox One was first unveiled at a press conference on May 21st, 2013. Unfortunately, gamers were not so lukewarm to Microsoft’s latest foray into home console gaming.

Reaction was varied following the Xbox One’s unveiling, with critics citing the great extent the Xbox One’s hardware capabilities such as the instant switch feature, permitting gamers to instantly switch from one game to another. The biggest limitation that critics would highlight was the console’s lack of adequate launch titles; many of them being called uninspired. Others were quick to point out that most of the launch titles simply displayed what the console was capable of graphically, and displayed no real gameplay innovations. The term, “Xbone” was insultingly coined by many to describe the system. Another deterrent was that the Xbox One was considerably more expensive than the PlayStation 4 initially, since the Kinect came with it as standard.

Controversy was ignited when Microsoft unveiled a number of seemingly ridiculous policies regarding digital content delivery, which was said to bring benefits to gamers, such as sharing games via cloud-based technology. However, this feature would only be available on the conditions that the console is connected to the Internet all day every day, and failure to do so would result in the games being unplayable until the console is again connected to the Internet. Gamers would only apparently be able to trade games at “participating retailers” at no extra charge, and could transfer games to friends for 30 days only one time. Outrage from gamers at these controversial suggestions prompted Sony fully to emphasize Microsoft’s misfortunes and cited their stupidity when Shuhei Yoshida announced that Sony’s DRM (Digital Rights Management) policies, which would allow for used games and sharing, and that they had been established some time before the unveiling of the Xbox One, citing the public’s reception as “a very useful source” for how to present the capabilities of their console.

After Microsoft announced their abandonment of their initial ideas for a console more closely resembling the Xbox 360, the Xbox One was released in most regions on November of 2013.


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