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Slower Than A Turtles
The Xbox Story : The Birth of a Console
Xbox celebrates its tenth birthday this year, having launched in the US on November 15, 2001. In this four-part special, Patrick Garratt talks to members of the console’s original team and tells its release story.
“Have you ever seen an Xbox game?”
I hadn’t. Very few people had. I was sitting in a small, bare room at the back of London games show ECTS in September, 2000. I stank of alcohol. I was alone apart from a balding blond man with a big smile. His name was J Allard. I had no idea who he was.
He picked up a Sidewinder PC pad. It was connected to a cabinet, the innards of which were hidden. He played some terrible-looking driving demo. All I remember is a car and a road. He drove along for a few minutes then stopped. He smiled again.
After asking a few questions, the answers to which taught me nothing, I left the room and thanked the PR. The ramifications of what I’d just seen were completely lost on me, a rookie journalist more concerned with drinking through publisher expense budgets than whether or not Microsoft could scale the videogaming equivalent of K2.
We’d all heard of Xbox: it had leaked from ECTS the previous year when Microsoft had first courted potential third-party developers. We knew it was supposed to be a console, a competitor to PS2.
And as such, we knew it would never work.
PlayStation 2 had launched in Japan that March, and was about to release in the rest of the world. Demand was ludicrous. PlayStation was the market. Sony owned consoles. Japan owned console games. And the man with the PC pad in his little room in London wasn’t going to change any of that. Microsoft didn’t understand the console world, as was ably demonstrated by my ECTS appointment.
Not for the first time in my life, I was wrong on every level. My first meeting with Allard came some 18 months after Xbox’s original concept appeared as a side-project at Microsoft’s HQ in Seattle. The story of the people that created the machine, and the impact it would have on the world of games as a whole, is a defining one, as inspirational a business tale as you’ll find in any industry.
That driving demo still baffles me, though.
Released November 15, 2001 in the US; February 22, 2002 in Japan; and March 14, 2002 in PAL territories.
Sold more than 24 million units.
Discontinued in Japan in 2005 and the following year in the rest of the world.
Precursor to Xbox 360, which launched in 2005.
A difficult birth
On March 30, 1999, Ted Hase, a DirectX technician, sent a Powerpoint presentation out to a select group of Microsoft employees that signalled the beginning of a chain of events that would change digital entertainment forever. Hase and three others had been working on a project in secret as a potential way forward for Microsoft’s gaming business.
The following day, the four men told a prep meeting for a Gaming Strategy Review on May 5, 1999 – ordered personally by Bill Gates – that Microsoft should make a videogames console.
Kevin Bachus, Seamus Blackley, Hase and team leader Otto Berkes hardly succeeded in convincing anyone an under-the-TV gaming drive was part of Microsoft’s future, but the seed was sown.
“Everyone started laughing,” Bachus told me.
“They said, ‘This isn’t what we’d intended to get together to discuss, but it’s an interesting idea. Let’s follow up on that.’”
Bachus’s team’s presentation had been made in response to an escalating threat. Microsoft was sick of Sony and its monumentally successful PlayStation program. PS2 had been announced at GDC ’99, and Kutaragi had finally overstepped the mark.
“They started saying things in the press about how they were, essentially, going to destroy PC gaming. Their mantra was something like, ‘Entertainment content requires an entertainment device,’” said Bachus.
“Bill was going on one of his annual think weeks, where he goes off with this stack of documents produced by people across the company on various different topics. He requested that we in the DirectX team do an analysis about what was known about PlayStation 2 and conclude whether, in fact, PC gaming was in danger, whether the PC platform was at risk.”
Seamus Blackley studied jazz piano at
college before, naturally, turning to physics.
He joined Microsoft in 1999, and was the
only member of the original Xbox team to
stick with the console all the way through
The quartet came to two conclusions; firstly, the PC was likely to pass PS2 on a technical level, as it had done with every previous console generation; secondly, PC components had reached a price-performance stand-point where they could easily be transformed into a competitive device.
Gates listened when Bachus and the rest told him that Microsoft “should, in fact, do that”: the process began to accelerate.
“After that, Ted, Seamus, Otto and I started having meetings in the conference room in my office. I remember very clearly that we used to bring this big bowl of jelly beans with us. We’d sit there, eat jelly beans and talk about what this thing was going to look like.”
The initial intention was to launch Xbox at the same time as PS2, to conceptualise, build, market and release the machine before the end of 2000. Bachus and friends were nothing if not ambitious.
Given the tiny development timeframe, the Microsoft console’s ideas were fetal compared to the boisterous teenager that was Sony’s PlayStation 2. In the early stages, Bachus and the others wrestled with basic console concepts, ideas of playing games that were completely alien to Microsoft. It had to “fire up immediately”. It wouldn’t have a desktop, or a Start menu, and you’d be able to simply put in a disc and start playing. The caveat was obvious, though: to all intents and purposes, a programmer had to see the box as a Windows PC from a developer stand-point.
“We wanted to kill two birds with one stone,” said Bachus. “We wanted to get into the console business and also reinforce the PC games business with a platform that essentially ran console-like PC games in the living room.”
Most of the discussion time was taken up with how was the group was going to convince Microsoft to wholly support the idea and launch.
“It was a slow, steady process,” said Bachus. “There was a desire at Microsoft to understand the PlayStation 2 threat. There was a desire in the consumer Windows division to put forward a PC strategy to Microsoft’s hardware departments. There was a desire to understand whether or not there was a strategy at Microsoft to play in the sub-$500 hardware device category.
“We simply went and lobbied people. It was such a controversial idea. We would go and talk to people and they’d say, ‘Well, that’s very clever, but we would probably not do it.’
“Microsoft didn’t take games all that seriously, despite the fact that games were the number one or number two thing that people did with their PCs. It just wasn’t seen as important as corporate stuff.”
Microsoft was so heavily involved in developing its Windows, Office and SQL Server businesses that it struggled to see beyond the end of its nose. Microsoft was not an entertainment business: it made corporate software, and companies spent millions of dollars licensing its highly successful products.
The suggestion that Microsoft should launch something along the lines of Xbox was one of revolution. And Bachus and his team weren’t the only parties looking to stage a coup.
Ted Hase was an original member of the
Xbox team, but, along with Otto Berkes,
decided to return to his original DirectX
role within Microsoft in late 1999. He left
the company in 2006.
A question of perception
Microsoft’s WebTV group was simultaneously lobbying hard to release its own multi-function living room box, a device that could play games as well as act as a TV and media hub.
In a series of bitter meetings over the best route forward for Microsoft in games – recounted in detail in Opening the Xbox, the account of Xbox’s beginnings written by US journalist Dean Takahashi in 2002 – Bachus and the others eventually won Gates over by being the best bet at staving off Sony and recapturing the hardcore gamer. The thinking was that the WebTV solution would forfeit the high performance demanded by the core by spreading itself over other applications and being a master of none.
The last of these face-offs, and the presentation which proved to be a tipping point in the ultimate decision about which way to go with Microsoft’s games effort, took place in June, 1999. It was made to Gates and Steve Ballmer under the auspices of releasing a sub-$500 media box. They showed something new to Microsoft: an instant-on PC.
“No one had ever seen that before,” said Bachus. “We worked with AMD to create a custom BIOS to make a PC that could start up immediately. We said, ‘Look: it can do this.’”
Gates and Ballmer were shown some graphics demos, one of which was an emulated PlayStation game using Bleem!. The main event was a Lara Croft segment: Blackley got her up and running on a screen in front of Gates in under nine seconds from pressing the button on the team’s prototype.
“We said, ‘If we had permission to build this special version of Windows, this is what we would do, and this is what we think the hardware materials would be for a manufacturer to build something like this,’” said Bachus.
“We went and talked to 3dfx, we talked to Nvidia, we talked to ATI and got their thoughts on what this might cost. We talked to AMD.
“We talked to hard drive manufacturers. Windows, at that time, required a hard drive, which is why, frankly, there was a hard drive in the original Xbox. You need a hard drive for Windows. That was the genesis of that.”
Otto Berkes was the leader of the original
Xbox team, and the last to leave Microsoft.
He resigned in May, 2011.
Bachus was less than kind about the WebTV proposal.
“They were like, ‘Hold on. We’ve always secretly planned to build a console ourselves. We’ve never bothered to tell anybody this, but this was always the plan,’” he laughed.
“‘That was always the idea. We just kept it a secret from everybody.’”
The approach the other group pushed forward was more radical. The WebTV idea was to copy Sony and Nintendo, to internally create a custom machine built on bespoke processors with software other than Windows.
Bachus waited for “Old Testament Bill Gates” to appear, but there was no shouting. The DX team had a clear understanding of what was happening in the console and PC games businesses at the time, and posited that it was better to lose PC gamers to a Microsoft console than to one made by Sony or Nintendo. Bachus also understood that console gamers played PC games, and vice versa, but they used different platforms to play different software.
The DirectX team emerged from the meeting victorious, but it was far from final approval. Bachus and the others were keenly aware that their console project could be cancelled at any moment. This was not simply a question of logistics and infighting: Xbox was ‘not Microsoft,’ and few people believed it would ever happen.
“I remember very well that Bob Herbold, the chief operating officer of Microsoft at the time, was primarily responsible for Microsoft’s global brand strategy, its global advertising,” said Bachus.
“A fair bit later in the process, once we’d been given permission to proceed, we were sceptical about Microsoft’s ad agency’s ability to communicate to consumers. We asked Bob for permission to do a nationwide search of ad agencies to try find one that could really go toe-to-toe with Chiat/Day, which was the agency that did the PlayStation campaigns.
“He said, ‘Yeah, absolutely, but give McCann Erickson, our agency, the opportunity to pitch,’ so at least we could say, ‘You’ve had your shot but you failed.’
“So we did that. Their pitch, as I recall, wasn’t terrible, but it wasn’t great, and we found a small boutique ad agency in New York that we really liked. They had really creative ideas; they really understood the marketplace and they understood the consumer. We were very excited.
“We went back to Bob and said, ‘OK. Now this thing is about to be announced, and it’s really going to take off, we’ve found these guys that we like and it’s not McCann Erickson.’
“He said: ‘You can’t do that. If I had ever thought you’d really get permission to do this thing I would never have let you go and do that. You have to use McCann Erickson.’
“It was indicative of the attitude within the company. They were like, ‘They’re never going to be able to do this.’”
Lobbying the games boss
In the battle to get the console project greenlit within Microsoft, Bachus and the rest aggressively targeting specific executives for support, one of the first being Ed Fries.
Fries, then Microsoft’s vice president of game publishing, ultimately became one of Xbox’s best known faces, first taking responsibility for the machine’s first-party line-up before assuming control of both first- and third-party software once Xbox launched. Gates liked Fries because of his successes in PC gaming, and he was a critical ally in the war against the WebTV box.
Ed Fries headed up Microsoft’s PC games
business before managing the Xbox
project’s software portfolio. He was a
key player in Microsoft’s purchases of
Bungie and Rare.
Fries was attracted to the DX team’s plan because it was essentially one to take PC games onto the television. Fries headed up Microsoft’s entire PC gaming effort, and Bachus saw he understood Xbox because it was a way to extend his business without a huge amount of additional investment.
Fries himself was well-used to being lobbied in this way, but had rebuffed all efforts up to this point.
“I had been approached by groups in the past who wanted to do console things, and in general I had sent them away,” he said.
“I was focused on running our PC gaming business, and getting a lot of traction there. But the DirectX guys came to me at the right time with the right proposal. I had previously turned down, for example, the Windows CE guys, who were working with Sega on Dreamcast and wanted us to port some of our stuff to that.
“But what I liked about the DirectX guys’ proposal was that this new machine would be a lot like a PC. Our PC gaming business had grown a lot, and I was starting to look beyond that and think about how I could take our group into the console world, but the existing consoles were very different; we just didn’t have a lot of console experience on the team.”
While the original machine being pitched was appealing because it had a hard drive and an Intel processor, the fact it was running Windows was a major draw.
“The idea that my group could get into the console business in an easy way was the original appeal for me to getting on board,” he said. “I didn’t realise how much it would change over time, but I think we all learned a lot over the next couple of years.”
Fries never fully moved over to the Xbox project, though, and always maintained command of Microsoft’s PC games while he worked on the machine.
J Allard joined the Xbox story later than the
rest, taking over as project manager. He was
famous within Microsoft for alerting Bill
Gates to the rise of the internet.
“He wanted, I think at least initially, to maintain some semblance of independence from us, and some semblance of neutrality, but we played very hard to enlist his support,” Bachus said.
Fries’s reticence to drop his PC day job, however, wasn’t out of anything as rudimentary as loyalty to his PC games output: it was a question of common sense.
Fries said: “I never moved onto Xbox full-time. That was actually a sore point for Rick Thompson, who was the original guy that was running the Xbox project.
“Everybody else at the start of Xbox in a big way, people like Kevin and Seamus and Rick, quit their other jobs and dedicated themselves full-time to Xbox. They were kind of mad at me, because I didn’t quit my other job – running the PC game publishing business – to run the Xbox game publishing business.
“To me that made no sense. I was running this big group, hundreds of people making games, and we wanted to make games for this machine. It made sense for me to add to my existing group and make games for that too, leverage what we’d already built.
“I was always continuing to do our PC gaming business in addition to the console business.”
Fries added: “When I was there, I thought constantly that they were both important, and we should invest in both business. And I believe, to this day, that they’re both important.”
As people like Fries became involved and the imminent threat of the WebTV group fell away, the Xbox project entered a new phase within Microsoft – and with it came a new level of difficulty for the growing team.
In the second part of the story of the original Xbox’s launch, Patrick Garratt charts the terrific obstacles facing the console’s team as it pushed towards a final greenlight from Microsoft boss Bill Gates.
The Xbox project had beaten off a rival console bid from Microsoft’s WebTV group, but the team’s real troubles in getting Xbox to market were only just beginning. It was time for some hard questions.
After the final stand-off with WebTV in front of Gates and Ballmer in June, 1999, there followed a meeting in Ballmer’s “tiny” private conference room with Bachus, Blackley and Bill Veghte, the head of the consumer Windows division.
“He started off by ridiculing us,” said Bachus. “He’s a very large personality. Bill sat down and said very quietly, ‘Now, Steve, I don’t know how much you know about what the DirectX guys are doing with the Xbox project,’ and Steve puts on this screaming voice and goes, ‘It’s going to be the biggest thing ever, it’s going to sell billions of units,’ basically taunting us about this hype he’s hearing within the company.
“But then he turns. He says, ‘Listen. You guys have some serious problems that you have to work out. What’s your cost? What’s your retail mark-up? What’s your reserve for returns?’ He’s a salesman. He understands that part of the world really well. He’s a very smart guy.”
Ballmer asked them what the retail price was going to be. They told him.
“OK,” said the Microsoft head. “Your cost is going to be $200 more than that. I think you guys need to go back and think about this a little more.”
“He really shamed us,” said Bachus. “There were a lot of uphill battles.”
At this point, the struggle to seat the Xbox project within Microsoft was intense. Bachus suffered a constant stream of executives through his office grilling him on the console’s USP.
As the fantasy of the Xbox situation turned
to reality, Steve Ballmer and Bill Gates
were forced to decide whether or not
Microsoft should risk losing $5-6 billion on
console gaming over five years.
Many of them could not grasp its function, and demanded to know if its “silver bullet” was that it ran IE, or did photo editing, or was a consumer Office device.
Bachus had to constantly explain to people that Xbox was a games console: it ran games. It was an unending conversation that ultimately hoisted the the DX team on its own petard.
“When we finally saw what the industrial designers had done with the original Xbox, we weren’t particularly blown away,” said Bachus.
“It was disappointing compared to what we had in our heads. But the product was so relatively expensive to build that they economised a bit on the plastic on the outside.
“They were like, ‘Well, you told us it was all about the games; it shouldn’t matter what it looks like.’”
It wasn’t just within the company that the team faced serious perception problems. Bachus ran into immediate prejudice to Microsoft entering the console space when he ventured into the outside world with the group’s idea.
“I had to go out and meet with all these developers and publishers and they said we were going to be crushed by Sony,” he said.
“Microsoft was a spreadsheet company, with blue-screens and crashes and installations. Nintendo hadn’t done much that generation and Saturn had been demolished by PlayStation, so how was anybody able to hold up against Sony?”
Fries, the man in charge of creating Xbox’s first-party launch line-up, faced the same views over whether or not Microsoft stood any real chance in the console game, but was world weary in that respect.
“Let’s just say I was used to it,” he laughed. “Microsoft had been in the games business, really, from the very beginning, putting out versions of Flight Simulator a long time ago, and releasing games like Decathlon. But it had never really been a serious player in games.
“When I took over the games group at the end of ‘95, beginning of ‘96, it was my intention to try to change that, and there were a set of people there who were already in the process of trying to change that.
“I have a shirt in my closet I was laughing about the other day. It was from our first E3, and our marketing guy came up with this self-conscious slogan: ‘Microsoft gets games.’
The original leak about the existence of the
Xbox project, according to Kevin Bachus,
was down to Konami: “Konami went and
told Next Gen about the fact we were going
to do a games console. That’s how it
started leaking out, as we found out several
“It sort of showed how much we didn’t get it; we felt we had to say it on our shirts.”
At the time Fries first took on Microsoft’s games division, some of the company’s first true “gamer” titles were being created, including Ensemble’s original Age of Empires, which released in 1997.
“I think that was our first true hit in the hardcore gaming business on the PC, and it let us establish some credibility and gave us the resources to grow,” said Fries.
“We did things like acquiring FASA Interactive and bring in Jordan Weisman, and that added Mech Warrior and Crimson Skies and his other properties, and more people from the hardcore games business into our world.
“By the time Xbox rolled around, I felt that we were reasonably well-established in the PC gaming space. We didn’t have to run around wearing shirts telling people that we ‘got games’.”
Not far enough
Microsoft first started talking about Xbox with third-party developers at ECTS in 1999. Jez San and other well-trusted figures were briefed on the project.
At the point third-parties became involved the inevitable happened: Xbox sprang a leak.
Said Bachus: “We had this deal with Konami. Konami had the rights to do special PlayStation versions of Microsoft’s PC games, things like Age of Empires. We had the rights to do PC versions of things like Metal Gear Solid.
“Konami went and told Next Gen about the fact we were going to do a games console. That’s how it started leaking out, as we found out several years later.
“But we were mostly able to do it very quietly, much more quietly than I expected us to be able to, and we gathered a huge amount of feedback.”
Away from London, Bachus and the team targeted the likes of Tim Sweeney and John Carmack for consultancy. The team started to process the data it had acquired from meetings with various publishers and developers, and the concensus was that Microsoft hadn’t gone far enough: those conversations were instrumental in forcing Xbox away from being simply a rebranded PC.
Bachus and Blackley took their prototype hardware to Vancouver to show it to EA and Microsoft Game Studios and, again, were told that their concept was too great a departure from the current console business. They liked the idea of being able to program games in Windows, but they were sceptical about the machine looking or feeling anything like a PC.
While the team spoke to third-parties about software, the hardware side of the project was being pushed towards a self-built box. Dell, specifically, made the decision that it couldn’t make the machine as it didn’t have a slice of the software business involved, meaning hardware price-cutting would never be off-set by an increase in software sales.
Nvidia, too, became a problem. The GPU-builder’s initial estimates for supplying Xbox’s graphics centre became “a lot more expensive,” according to Bachus, when Microsoft finally came to placing an order. Nvidia eventually did build the console’s GPU, but it was a custom design created with Microsoft: the two companies ended up in court over their partnership when Microsoft tried to push the chip’s price down in 2002.
“There was a lot of challenge and a lot of struggle with that, and it felt very contentious. Bill, I think, was a huge propellant of what we were trying to do. Steve was a huge opponent. But ultimately, I don’t know, those two guys must have got together in a room: ‘Steve, I’ll let you raise the price of Windows in Afghanistan if you let me do Xbox,’ or something like that,” Bachus joked.
The team continued to grow. Bachus and the rest searched Microsoft for staffers who’d already worked in the console world, finding people in the hardware division with first-hand experience of Nintendo and PlayStation. The project was moved onto the consumer side of the company under Robbie Bach, and J Allard took over as project manager.
“He was brought in mostly to be our adult supervision,” said Bachus. “The guys running the Microsoft hardware group felt they needed more Microsoft veterans on the project, so that J could go into Ballmer and say, ‘Remember how I told you the internet was going to be a big deal and it was? Well, now I’m telling you that Xbox applications need to run in kernel mode.’”
As the obstacles to launch began to fall, Bachus and the rest of the team were given permission to quit their DirectX day-jobs and move onto Xbox as a full-time project. As insane as it seems now, everything accomplished up to this point had been a sideline. This was in September, 1999, six months after the project was initially born.
At this point, the original DirectX group split. Otto Berkes and Ted Hase decided to stay within their original roles: they were long-time Microsoft staff, and had strong ties to their divisions. Bachus, however, had only been at the company for two years, and Blackley had been there for an even shorter time. They both moved onto the Xbox project as a priority.
“We were very passionate about Xbox, and when we had the opportunity to follow it we did,” said Bachus.
Gameplay from Ensemble’s original Age of
Empires. It released on PC in 1997, giving
Ed Fries his first core gaming hit for Microsoft
and part of the traction he needed to move
forward into the console space.
Even now, there was no final greenlight on Xbox. It could easily have been cancelled.
“Our task was really to try to prove out every outrageous assertion that we’d made: that we could get publishers on board, that we could build this thing, that it could be done, that it could be successful. There was definitely risk there.”
Bachus and Blackley started serious talks with hardware manufacturers, including a trip up to Canada to see ATI in a rented Bug.
“We were quite the couple in our bright yellow VW Beetle,” Bachus recalled.
This period lasted for around six months. Publishers and developers were rounded on again, and decisions were made on ATI versus AMD, 3dfx versus Nvidia, and so on. Bachus’s role shifted, with him moving from finance to hardware planning, making decisions on how many connectors the final box would have and which cables would be included in the pack.
When full-time engineers joined the team, it changed again, and he was given the responsibility of looking after third-party software relations while Fries readied the first-party line-up.
Blackley eventually moved onto developer support, but Bachus and Blackley both found this period of escalation difficult.
“We struggled to find our identity,” said Bachus. “When J was brought on board it was like, ‘You have to look after Kevin and Seamus,’ but he wanted to bring in his own people. We were trying to sort out the organisational structure as well as talking to all these people outside of the company, trying to figure out how to do it and be clever about it.”
Ultimately, though, the team coped with its growing pains and succeeded in creating a solid plan. Six months after moving onto the project full-time, the Xbox unit sought final approval to release Microsoft’s first videogames console.
The key meeting with Ballmer and Gates took place on February 14, 2000, just before the first, legendary Xbox tech demos were shown at GDC in San Jose, California. This was a tough call: Fries calls it the “Valentine’s Day Massacre,” and it decided not only the shape of Xbox’s future, but that of the overall direction of Microsoft, the world’s largest company.
My Bloody Valentine
A positive outcome for this meeting meant Xbox would exist. A thumbs down would send the console team back to developing Windows.
Rick Thompson moved from Microsoft’s
hardware division to become general
manager of the Xbox group in July,
1999. He resigned just after the
console was greenlit.
As Rick Thompson told Dean Takahashi in an interview for Opening the Xbox: “We looked around at each other around the table and asked if we really wanted to lose billions of dollars over eight years.”
Bachus told VG247: “We got together on February 14. This is Valentine’s Day, right? Everyone’s supposed to go home and be with their wives; this thing drags on for hours.
“It was very contentious. At one point I remember Bill saying, ‘If we don’t have something like Xbox in the marketplace, we don’t have a comprehensive consumer strategy. If we’re not going to do Xbox, I see that the decision is that we’re either an enterprise software company like Oracle, or we are a more comprehensive software company that encompasses consumer issues as well. So, either we do Xbox, or we sell the games division to Electronic Arts, we ditch MSN, we get out of all this other stuff, and we just focus on servers, Internet Explorer, and so on.’
“And no one really wanted to do that. I think that was what ultimately broke the loggerheads. Up to that point, and I’m sure beyond that, but certainly up to that point, there were a lot of things that could have caused the project to be terminated.
“We really didn’t make it easy for ourselves in that things changed from the original concept. Now we wanted Microsoft to build the hardware, and the components were more expensive than we thought. We didn’t want it to run Windows software, but instead something that was API-similar, in the same way that iPhone apps are similar to MacOS apps.
“You can’t run a Mac app on an iPhone, and you can’t run a PC game on an Xbox. That’s why the homebrew scene was so active on Xbox when it first came out: it’s similar to Windows, but it’s not running Windows.
“There was a lot of brain damage with that. But we were still able to go through with it.”
Said Fries: “It started at four o’clock. Bill and Balmer yelled at us for hours and hours, until seven or eight at night. In the last five minutes of the meeting they changed their minds. They decided to approve the project.
“A big part of why they were mad was because we were telling them that we were dropping Windows, and that we were doing this custom OS for it.”
The team had been told time and again that Xbox needed to be a “true console,” as Fries described it.
“It needed to have a very thin, light operating system that we had a ton of control over, and that meant dropping Windows,” he said.
“And that was a very difficult discussion when we brought it up with Bill Gates.”
Changing the Xbox OS was a huge deal for Gates, although it’s not easy to see why looking back from so far away.
“You have to put yourself in their shoes,” said Fries. “They run this big company, and they’re trying to coordinate the actions of lots and lots of different groups, and every group wants to go off in its own direction. They all have their own reasons for why they should reinvent everything – developers love to do that – and why they shouldn’t share, or work together, or coordinate, because they don’t trust the other groups to get everything done on time. It’s always easier to go out on your own than to work together.
“They’re trying to wrangle all these groups to do what, in their view is the right thing: working on big, strategic initiatives for the company that are bigger than any one team, and in general that’s the right thing for them to do.
“But in the case of Xbox, what was really the right thing to do, and what they ultimately approved, was to separate us, to really say, ‘What you’re doing is completely different. Go off on your own and make it work.’”
They’d won. Microsoft would launch Xbox. The Valentine’s meeting was held just before GDC that year, and Gates himself was booked to speak, which was, in itself, previously unthinkable. There was great excitement in the western games world. The week before the GDC keynote on March 10, 2000, Bachus went to Gates’ office, showed him the Xbox tech demos and “got him ready”. They connected up one of the prototype machines to a monitor and showed him the presentation software.
This was the start of Xbox’s public push. We were about to see Bill Gates in a leather jacket.
With the Xbox project finally greenlit, the Microsoft team prepared to show it to the world. Patrick Garratt tells the story of the GDC and CES Bill Gates reveals and why you were nearly playing the “Microsoft 11X”.
With Gates and Ballmer now fully on-side and Xbox greenlit, the team prepared to go public. Microsoft announced Xbox at GDC 2000, and Kevin Bachus, Seamus Blackley and the rest of the group knew that, for the console to be taken seriously, it was essential that Bill Gates was seen as personally backing the initiative.
The public also told the team that the technology presented must be clearly ahead of the competition: namely PlayStation 2.
“We did a lot of focus testing,” said Bachus. “I wanted to prove the point that I’d been saying to these executives, that it was all about the games. We brought in people in a bunch of different cities around the US.
“The first thing they said was that Bill Gates would make sure that there are games for this thing. Bill’s the richest man in the world. He’ll make sure there are games. That was number one. Games availability was super-important.
“Number two: Microsoft has its fingers in all these technology pies. There’ll be some sort of advanced technology feature that will be better than the competition.
“That’s a big part of the reason we launched in 2001 instead of 2000. Bill Gates came back to us and personally said, ‘The way I see these specs, if there was such as thing as a benchmark for consoles, we’d probably beat PlayStation 2, but not by enough that consumers would actually notice. If you’re entering the marketplace, you have to have a significantly differentiated product. You need to wait for a year for PC technology to pass PlayStation 2 with such significant force that Xbox can truly be marketed as a superior technology product.’ That was reinforced by what people told us in the focus group.
“The third thing they said is that it would probably have some strong network component, as Microsoft is so dominant with Internet Explorer. This is important, because at this point nobody played multiplayer games on console, and, in fact, very few people played them on PCs. But they thought, ‘At some point I may want to do that, and I want my console to be ready.’ That was why we started work on Xbox Live.”
It wasn’t only the man on the street pushing for Gates’ head to be put on the block over Xbox: EA’s Larry Probst had demanded it as well.
The Xbox GDC reveal Bill Gates personally announced Xbox at GDC 2000. The man operating the ping pong ball demo is Seamus Blackley.
“You’d think that Microsoft, the most valuable company in the world at the time, going out to games developers and saying we were going to do it would make everyone fall in line, but it was exactly the opposite,” said Bachus.
“When we went to meet with Electronic Arts, they said, ‘We’re very skeptical about this initiative, because you have a tendency to put your toe in the water and then abandon your partners when things don’t go your way. We know that if Nintendo fails, they’re done. They have no other products. But if you guys fail you lose a billion dollars; it’s a rounding error on your balance sheet and no one even notices.’
“For example, at the time, Robbie Bach wasn’t only in charge of Xbox, but also of all Microsoft’s printing software and retail initiatives. Larry Probst said: ‘I want to know who gets fired if Xbox fails. I want to know, Robbie, that if Xbox fails, you’re fired. And we want to see Bill Gates on stage at GDC. We want to know that this has support all the way up to the top. We want his name associated with it so we know how committed you are.’
“We lobbied aggressively for Bill to be the guy that went out on stage and did it,” said Bachus. “We knew that it would get promotion, but we also knew what it would say to the rest of the world. We hadn’t seen the head of Sony come to GDC. It was very, very important to show how serious the whole company was about Xbox.”
That’s not PC
Gates agreed. It was his personal appearance at GDC and support for the console that would allay initial fears of another Jaguar or 32X – a machine with no software. That Gates would come out on stage and confirm Microsoft was to launch a super-powered, American-built videogames console was a fantasy to the western games trade. A dream. At GDC 2000 it became a reality.
Gates wasn’t the only star of the show, though. The prototype console revealed at GDC that year certainly grabbed attention. As you’ll no doubt recall if you’re old enough, it was a giant silver “X”. There was method in the madness.
Bill Gates, Ed Fries and Robbie Bach talking at
GDC 2000 in the wake of Xbox’s tech reveal.
This is edited from a CMP sizzle roll.
“I’d gone to Seamus and said, ‘You’ve got to help me make something that doesn’t look like a PC,’” said Bachus.
“We knew there was a lot of skepticism out there about Microsoft getting into the games business. Everyone thought it was just going to be PC games.”
Microsoft’s intention with the prototype was to show something that looked like a games console, but in such an incredibly over-the-top way that no one could mistake it for a PC. Sony’s PS2 unveil had been fuelled by different motives: the company had shown a custom housing for the console’s motherboard and hooked it up to a screen, the intention of which was to partly show that PlayStation could take on and beat the PC gaming leaders.
Xbox was about to become official, but there were still serious struggles with PC games advocates within Microsoft itself. The GDC hardware had to be so outrageous that no one would ever believe it was the final design.
“That’s why we built that huge chrome ‘X’,” said Bachus. “Frankly, I would have loved it [as the design], but it was enormous. There was no way it could fit under someone’s entertainment system. It was just a prototype, super-early stuff, but it looked nothing like a PC.
“That was very important. Even the night Xbox went on sale, I still believe there were people that thought they were going to see a Start menu when they fired the thing up.”
Blur Studios created the martial arts demo
involving the tattooed woman and the
robot. It was designed to show what
Xbox was capable of in terms of animation.
Click for a bigger version.
On March 20, 2000, Bill Gates walked out onto the GDC stage in San Jose and, once again, made history. I was in the crowd, sitting next to Criterion’s Alex Ward, and the atmosphere was like no other I have experienced at a games event. Seeing Gates on stage, the all-American tech hero, to talk about videogames to videogame developers and announce a Microsoft console, was stunning.
“I knew there was a change. I knew something big was happening,” said Ward, who had just joined Criterion from Acclaim.
“I knew that there was this movement happening, and that it was coming from America. It had all been in Japan, and you’d had to read about it from afar. Like, ‘Hey, Sony held an event,’ and you’d have to read about it in MCV.’ I was pretty shocked by it.”
You have to put this in context. Console videogaming was all about Playstation and Nintendo. Only Gates was big enough to convince the gaming world there could be a third player, and one that wasn’t Japanese.
“We had to say, ‘Listen, everything Sony’s been saying about PC being sub-standard and PC tech being overrun by their alien space technology in the Emotion Engine isn’t true,’” said Bachus.
Xbox’s first tech demos: the desk; the
Japanese garden; and the ping pong balls.
“‘PC technology has continued to advance and develop, and let us show you some of this stuff that we’re going to be capable of doing with this Xbox.’”
In one of gaming history’s few, genuine, “Were you there?” moments, Gates announced Xbox and marked the occasion by putting on a leather jacket, resplendent with a stitched green “X”. He received a standing ovation.
It was cool Gates. Microsoft was no longer just spreadsheets. Anyone in that crowd, which was built primarily of US developers, will tell you the same thing: the atmosphere verged on hysteria. Gates was here to save games.
“It was entirely by design,” said Bachus. “Seamus and I and a few others on the team had come from the games industry and we were basically talking to ourselves. To a large extent, and this is absolutely indisputable, we tried with Xbox to create the console that we wanted to develop for. We were ultimately validated that other people felt the same way. We knew that if we captured the hearts and minds of developers then the battle was won. We wanted to build demos that we, ourselves, wanted to see.”
The demos consisted of a camera flying around a desk, the intention of which was to show the level of detail possible with the machine; a Japanese garden, complete with fish in a pond and butterflies that flew together to spell “Xbox”; a room full of mousetraps covered in ping pong balls, which Blackley set off in a chain reaction to show how easily the console could deal with real-time physics; and a dancing duo of a futuristic woman and partner robot, put together by Blur Studios, designed to show Xbox’s achievable level of animation.
Gates confirmed that Intel would supply the CPU, and Nvidia the GPU. As reported in Opening the Xbox, the console was to have 65Mb of DRAM, compared to PS2′s 40Mb, and would run a theoretical maximum of 150 million polygons per second, compared to PS2′s 66 million.
The news that Intel was to supply the central processor was a shock to the AMD reps in the crowd: they hadn’t been told by their management that their bid to supply the box had been unsuccessful.
An animation demo for Midway’s Ready 2 Rumble was then shown, featuring lead character Afro Thunder. While the game never appeared on Xbox in any form, it showed Microsoft was in the frame for existing, high profile console content. The truth, though, is that the movie itself was nearly canned.
“We could never get Bill to talk about fighting games like Mortal Kombat,” said Bachus. “He always referred to them as boxing games. It was hilarious. The night before the keynote we were showing him the demos on the big screen, and we’d been told that we couldn’t show that video. His PR people said, ‘There’s no way you can do this,’ because the game used this character called Afro Thunder, and they thought it was demeaning to black people.
“Microsoft had just had this weird thing where somebody had gone into some photo database in Office, and there was a black family at a playground sitting in front of a swing set, a jungle gym and a slide. If you put in ‘jungle’ it came up with a picture of black people, where the word actually referred to the piece of equipment in the background. People were like, ‘Microsoft is racist.’ They’d just settled that, and Bill’s PR people were panicked about this video. They said we couldn’t have it.
“So, we’re showing the demo, and I, being young and stupid, said to Bill, ‘There’s one more video that we’re thinking about doing, but your people are kind of concerned about it.’ He asked to see it. I showed him the video and he goes, ‘I think that’s great. That’s an actual character that’s really entertaining. I don’t have a problem with that.’
Gates’ PR people shot Bachus daggers, fearing headlines along the lines of, “Bill Gates ridicules black people” the following day.
Bachus responded: “You don’t think maybe the headlines will read, ‘Microsoft announces games console’? You don’t think that’s maybe slightly bigger news?”
The original Afro Thunder tech demo from
GDC 2000. This came close to never being
shown as Gates’ people were worried it
might be construed as racist. Ready 2 Rumble
never released on an Xbox console.
Hedging the bet
In fact, most of Gates’ GDC presentation was about PC games. The Xbox tech demos only took up the very end of the keynote.
“Part of that was hedging the bet,” said Bachus. “There was a lot of resentment inside of the company about whether or not this was going to destroy the PC stuff. Bill had never been to GDC before, and had never talked about PC gaming; he’d never really gotten behind it.
“The bargain we had to make was, ‘OK, we’re going to introduce the fact that we’re getting into the console business. We’re going talk a little bit about Xbox. But first we’re going to give tremendous love to the PC gaming space because we don’t want people to think that we’re abandoning it.’
“That was very important. We had to first reinforce our commitment to the PC gaming space, really underscore the fact that we were very bullish on it and we believed it had a strong future, and introduce the concept that we felt PC games and console games were distinct and not competitive.
“Plus, candidly, I kind of think some thought that, ‘Well, if we decide we’re not going into the console business on February 14, at least there’s going to be something for Bill to talk about.’”
The wariness was there for all to see. In the announcement press release issued on the day of the presentation, Don Coyner, director of marketing in the newly-formed Microsoft games division, attempted to assuage PC gaming’s fears in plain language.
“The PC and Xbox are complementary devices. Each has very distinct audiences,” he said.
“PC games are more cerebral, while console games are more visceral. If you look at the top ten games lists for these two platforms, you’ll see that they don’t really match up.”
The giant silver ‘X’ console used in the
original reveal demos. Blackley was
charged with creating something that
looked nothing like a PC, but was so
over-the-top no one would ever believe
it was the final design.
Blackley ran around the game world as a small girl with a large hammer, smashing cockroaches. He called her “badass”. The visuals really were amazing for their time: self-shadowing and bump-mapped walls were on display. No one had ever seen a console do anything like it.
I was in the CES presentation with Ward, and, again, Gates was faced with a tough crowd.
“I though Abe looked pretty good,” said Ward. “I wasn’t convinced by Malice. I’d seen it before as a PS2 game at Fox Interactive. I wasn’t convinced by that, although the screenshots looked good. I was very skeptical. It was only when I actually got the machine from America that I became a big believer.”
The Las Vegas reveal was a far glitzier affair than the GDC presentation. Wrestling star The Rock joined Gates on stage, and the two engaged in a comedy routine. He told Gates that, “It doesn’t matter what you think, Bill,” which raised a genuine laugh. A THQ-published WWE game was confirmed for the machine. Activision also became involved at this point, saying it would release a Tony Hawk title for Xbox.
What’s in a name?
The CES hardware reveal took place in January, 2001, and the name “Xbox” was now a permanent fixture for the November launch. Finalising the console’s public identity, though, had not been an easy process.
“At first we called it the Windows Entertainment Platform, or WEP, and then we came up with a codename for it,” said Bachus. “We called it Project Midway. That was because, candidly, the Battle of Midway was the turning point in the battle with the Japanese [in World War II], where, through deception, we were able to fool the Japanese into thinking something was actually another. But we had to have a cover story for it, so we said it was ‘midway’ between a PC and a console.
Jez San’s Malice. The game had been
originally intended for PS2. Blackley
showed it as part of the CES 2001 demo.
“But we started referring to the hardware internally as the DirectX team’s box, or the DirectX box. It just got shortened to Xbox, although we could never figure out if it was X-Box, or whether or not it had a capital ‘b’ or a lower case ‘b’. But that was always the codename, and we figured marketing people would come in and come up with something snazzy for it later.
“We had this very expensive naming company that comes up with all kinds of names. They asked us things like, ‘If Xbox was a car, what type of car would it be?’ J Allard came up with the predictable, ‘It’d be a Ferrari.’
“They came back with a bunch of names that I thought were ridiculous. Most of them sounded like car names, like the Atlanta, the Altera; things that sounds good from a sonic standpoint. And they were like, ‘No, we don’t like those names either. We were just gauging your reaction to them. I was like, ‘Right.’
“Ultimately they came back and said, ‘We’ve found the name. This is the name. It tests great. We’ve tested it against Xbox and we think it’s fantastic. OK. Here it is: it’s the Microsoft 11X. It’s not 10. It goes to 11. And “X” is mystery. And it tests great. Everyone loves it.’
“And I turned to our marketing guy and he turned to me, and we said, ‘Well, I guess we’d better go buy Xbox.com.’”
Bachus conceded that Xbox ended up as the machine’s name “mostly because we couldn’t think of anything better. It was just as simple as that.”
When the team decided to ultimately call the console Xbox, it then faced the challenge of ousting previous owners.
“Xbox.com, I believe, was owned by a German pornography site,” said Bachus.
“The hardest one, though, was a really tiny company, a public company on NASDAQ, called Xbox Technologies: I can’t even remember what they did. But their ticker symbol on NASDAQ was XBOX. Fortunately for us, they were actually in the process of going bankrupt, so we basically offered them, I don’t know, $100,000 just to give us the name, and they were thrilled just to get something as they were going bust.”
The final hardware was public. The final name was in place. Bill Gates had personally endorsed the machine. They were ready to launch. There were just a few things left to confirm before going live: we still knew nothing of Xbox’s games.
The name was decided and the hardware shown: but what of the games? Patrick Garratt looks at the original Xbox’s launch line-up and the console’s release in the final part of our four-feature special.
Xbox was now locked into a launch time-frame. Slated to ship in late 2001, the machine had been pushed back a year at Bill Gates’ command to ensure there was a discernible difference between Microsoft’s effort and PlayStation 2, and the race was well and truly joined to form a suitable launch line-up in a cripplingly short window.
“For me, the challenge was that I only had a couple of years to pull together a set of console games,” said Ed Fries, the Microsoft executive in charge of creating Xbox’s first-party launch output.
“My group had never made a console game. We’d never produced a console game. We were developing for a machine that didn’t exist, and we had to convince developers that Microsoft was actually going to do this thing, that the machine was going to ship and that it was actually going to sell in sufficient quantities.”
Ever the understated, Fries noted that these were “hard” discussions. It was Fries’s job to gather and create exclusive content for Xbox’s launch. Triple-A developers don’t make money unless their game sells in large quantities: Fries was asking for exclusive videogames for a platform that wasn’t available, had no track record and would only be running at half speed six months before launch. How could it be trusted to sell tens of millions of units?
Fries did have one trump: he worked for Microsoft.
“I had a good bizdev team, and they were out talking to a lot of people, and I was out talking to a lot of people, and we found opportunities here and there,” he said.
“Bizarre Creations was a good example. They’d completed Metropolis Street Racer for Dreamcast, which was, in our opinion, a great game. We thought that it could easily be moved onto the new platform and modified in time to be a launch title for us. That’s where Project Gotham Racing came from. That’s an example of something that was relatively easy to do.”
Oddworld’s Lorne Lanning was also quick to get on board: Munch’s Oddysee was a launch title, and was the first ever game shown running on Xbox, played by Seamus Blackley at CES in January, 2001.
“That was a big one for us,” said Fries. “To take what was, at that time, a very high profile Sony developer, a Sony product, and to have it as a launch title on our new console; that was a really important one.”
The US Xbox launch titles – November 15, 2001
Halo: Combat Evolved Oddworld: Munch’s Oddysee Dead or Alive 3 Project Gotham Racing NFL Fever 2002 Air Force Delta Storm Mad Dash Racing Cel Damage Arctic Thunder Fuzion Frenzy Tony Hawk’s Pro Skater 2X 4×4 Evo 2
You are a cybernetic warrior. In the future.” In May, 2001, at E3 in LA, Microsoft officially announced Xbox’s launch details: it would release in the US on November 8 for $299. Between 600,000-800,000 units would be available day one, with the number rising to 1.5 million before the end of the calendar year.
While the news was good, the E3 presentation was not. After a failed attempt to show an updated version of the GDC 2000 ping pong ball demo, Robbie Bach introduced a wooden showing from a clearly terrified Joe Staten from Bungie. Halo itself looked fantastic to those of us sitting in the audience, but Staten began the viewing with the immortal words: “You are a cybernetic warrior. In the future.”
It creased us up: we should have been looking at the game, and instead we were laughing about the delivery.
Halo itself became a focal point of the criticism aimed at Microsoft at E3 that year. It was running at a practically unplayable speed on pre-launch hardware on Microsoft’s booth at the show. Many believed that neither the game or console would be ready for November based on the shooter’s showing that year.
Microsoft had bought Bungie in June, 2000, confirming Halo – which was previously being developed for PC and Mac – as an Xbox exclusive. While hindsight is a wonderful thing, Microsoft had no idea at the time just how important Halo would be for Xbox.
“Even at the end, it was ‘a’ title for us: it wasn’t ‘the’ title for us,” said Fries. “We had Munch’s Oddysee from Oddworld, and we thought that was a really important title. That was something we had TV behind, along with Halo. We had TV behind our football game, and some behind Project Gotham Racing as well. So, there were a whole set of games that were treated as our big titles for launch.
“It’s easy to try to modify history, to look back and say, ‘It was all about Halo.’ But that really didn’t develop until a little bit later. Halo was the one that everybody was playing at night. It was the one that we really loved to demo. When I was out on the road in the months leading up to launch, I was showing a lot of Halo, just because it looked awesome. It really showed off the machine.
Halo: Combat Evolved emerged as Xbox’s
defining game, but Microsoft saw it as part
of a portfolio, not a leading title. Said Fries:
“It’s easy to try to modify history, to look
back and say, ‘It was all about Halo.’ But
that really didn’t develop until a little bit
“But when I talked to the press, it was really the one that had a lot of controversy associated with it. Coming out of E3, there was a lot of skepticism about the game. It surprised me how much there was. Next Generation, which was the really influential magazine here in the US, had some pretty mediocre things to say about it coming out of E3.
“And some of it was right: at E3 we were running on half-speed hardware. The game wasn’t done. But, those of us that were familiar with it could see what it was going to be, I guess.”
Bach also announced at E3 that year that 200 third-parties were making Xbox games. There were some 80 Xbox exclusives in the works, Bach said, 40 of which would be made by third-parties. Bach added that 27 online titles were in development for the machine.
EA said it was making 10 Xbox games, and showed Westwood’s Pirates of Skull Cove – it wasn’t great. Sega also committed to Xbox, now Dreamcast had officially failed – the console had been brutally discontinued in March, 2001, thanks to funding issues.
A Dead or Alive 3 demo was technically great. The Munch’s Oddysee showing was just old.
It was at this point that Kevin Bachus left Microsoft. The reasons cited in Opening the Xbox are that his wasn’t finding his job enjoyable any more and wanted to get back into making games: he took a job at Wild Tangent, and would later move onto the ill-fated Phantom project. He’s currently chief product officer at Bebo.
The AI’s terrible
And while Microsoft fumbled Xbox’s public perception that year, things weren’t always going to plan behind the scenes. Microsoft had a large investment in Steven Spielberg’s AI. It was announced in August 2001 that two AI games would release as launch titles that November, with a third game to follow.
The US launch in New York. The Rock and Bill
Gates both turned up.
“Let’s just say it didn’t work out,” laughed Fries. “The movie didn’t work out very well, and the games didn’t work out very well.”
None of the games released.
Fries, though, was undeterred by all these set-backs. He’s an idealist. His logic in constructing the console’s initial line-up was borne from one basic premise.
“It starts from me being a gamer,” he said. “What would I like? What do I want to play? Who are the people I want to work with? For me, it was working with the very best game development teams I could find, the best talent I could find, and just giving them the resources that they needed to do their best work. That was my strategy.
“What would you do, right? If you had the resources, the money to go out and work with anybody in the world, what would you do? You’d go and talk to all the people you were really excited about, the people who you have respect for. And what you find is that they’re almost all busy doing something else: they’re great guys, and they’d love to work with you, but they’re all busy.
“That’s when you have to get opportunistic.”
Fries wasn’t only active in the west before launch. He was already spending a lot of time in Japan, and some of the feedback he was getting wasn’t always as helpful as it could have been.
“It was hard to know what to listen to,” he said.
“They told us that we couldn’t call it Xbox, because ‘X’ means ‘death’ in Japan. They said we can’t make it black, because black is the colour of death. Deathbox, you know?
“And I’m like, ‘Isn’t the PlayStation black?’ I remember a meeting where a developer told me the controller needed to have the same weight as water in the hands. Which could be good feedback. I don’t know. You’d get all this feedback translated to you, and it wasn’t always easy to know who to believe, or what was important.”
While Fries crunched on the first-party line-up, Allard and the rest of the team were pushing for third-party software.
“We had to go out and convince publishers that we were serious about getting into the games business, and that we could compete effectively with Sony,” said Bachus.
The UK launch
The British Xbox launch took place at the Virgin Megastore on Oxford Street, London. Richard Branson was in attendance, as was game-loving celebrity Jonathan Ross and a fresh-faced Chris Lewis. Lewis now heads up the European Xbox business.
Dreamcast’s demise formed an opportunity. As developers turned away from Dreamcast, some diverted their projects towards Xbox: had Microsoft not been in the market, they would have had no choice but to turn to PlayStation.
It wasn’t only western development that was immediately interested. Despite the common perception that Xbox was initially laughed out of Japan, several of the large Japanese games firms were involved from the start. Tecmo, for instance, released a launch title in Dead or Alive 3. Sega Japan was also there from day one with Jet Set Radio Future.
“I think a lot of the Japanese companies got on board because they thought that we’d be successful with Xbox 2 even if we weren’t successful with Xbox,” said Bachus. “They wanted to say, ‘Listen, we were there with you during the difficult phase with Xbox, so you can show us some consideration with the next console.’
“Remember that Microsoft has this reputation that it takes three times to get it right, and we didn’t want to do that. We wanted to get it right there first time, but they were like, ‘You know, you’ll probably get it right eventually.’”
Fries, Xbox’s first-party games boss, was removed from the third-party side of the project to an almost complete extent.
“I was so busy with the first-party portfolio at that time that I almost didn’t even see the third-party stuff. I was at TGS that spring, and I was mostly cooped up in a hotel room doing interviews across from the hall, and people were talking about Dead or Alive. I hadn’t seen it. I had to go over to the show to see it, because so many people were bringing it up to me and saying, ‘Wow, that really looked great.’ And I’m, like, ‘Yeah, it’s great, isn’t it? I’d better go look at it.’”
While this sounds absurd, Fries and Allard were actually in competition over their respective Xbox software programs. Fries assumed control of both third- and first-party content after Xbox launched, but pre-release Allard worked separately.
“In a way, the first-party team is a competitor of the third-party teams, in that we all come out with games,” Fries said.
B-roll from Microsoft’s E3 2001 press
conference, showing Robbie Bach
trash-talking Sony’s PS2 launch, Peter Moore
joking about “getting out of the hardware
business,” Halo, Dead or Alive 3, Munch’s
Oddysee, NASCAR Heat and more.
“For example, I was producing a football game, and so was EA. When I later took over managing the third-parties, I had to do it really carefully because of that issue. It’s kind of sensitive. I’m out meeting with third-parties and they’re showing me what they’re doing, but to some extent they know I’m making competing products.”
Fries not only had to cope with ludicrous time constraints and in-team competition: the spectre of mistrust dogged the project even now.
“It was sort of like stepping back to those early days again when we entered the console world. We had to prove ourselves all over again. I think it was doubly hard, because we came from a PC world; in a lot of ways we saw the PC world as being more advanced than the console world, and when I say that, I mean the PC world had become about multiplayer and online. In the console world that still really wasn’t very true. There were attempts to do that on things like Dreamcast, and some even before that, but it wasn’t an important part of the console world.
“So not only were we trying to enter the console world and have credibility, but we were also trying to say to the console world people, ‘Hey, your world is going to change.’ When we showed something like the first Halo, a lot of the reaction from the console people was, ‘Wow: you really don’t get console games.’”
A brown shooter like Halo was baffling to the console section of the games industry, and it wasn’t just an external struggle.
“Someone in the group, I can’t remember where, had done what they called a colour palette analysis, and they’d showed that console games used these bright, cartoony colours, and Halo was using these dark, PC-like colours. They were trying to tell me that we were doing it all wrong, that we weren’t consolely enough. I just remember kicking him out of my office and not ever presenting my analysis to the Bungie people,” Fries said.
“It was the kind of thing that was happening then. It’s funny, because we were learning a lot, and we clearly didn’t know what we were doing going into it, but at the same time we knew a lot about the PC world and we had opinions about where we thought gaming was going. The challenge was choosing which instincts to believe, and which ones to modify as we got new data.”
We are go for launch
Eventually, though, all the wrangling came off. Xbox launched in the US with Halo: Combat Evolved, Oddworld: Munch’s Oddysee, PGR, NFL Fever 2002 and Blitz Studio’s Fuzion Frenzy as its first-party line-up. Europeans got Rallisport Challenge and Amped: Freestyle Snowboarding instead of the football title.
The American launch was delayed a week to November 15 because of production issues, but the New York release party was spectacular nonetheless. Gates himself turned up, as did The Rock, and “the kids” were as enthusiastic as kids could ever be. Halo and Munch’s Oddysee starred as software, and while Japan and Europe would have to wait until the following year for their launches, fact was fact: Xbox was now a real games console with real, exclusive games.
The British launch took place on March 14, 2002, in the Virgin Megastore on London’s Oxford Street. From what I drunkenly recall, it was rammed, with a packed bar downstairs distracting from photocalls and demos on the shop’s main floor near the tills. Richard Branson and Jonathan Ross were the star turns, and the UK launch team – made of the likes of Chris Lewis, Paul Fox, Nick Grange and Tina Hicks (now Moore) – was clearly thrilled with the result.
There was certainly no lack of interest. Xbox’s Japanese launch took place a few weeks before, on February 22.
Manufacturer Flextronics opened two plants,
one in Guadalajara, Mexico, and one in
Hungary, to produce the Xbox launch units,
as detailed in this promo movie.
It was only two-and-a-half years since Ted Hase had first sent out a PowerPoint presentation suggesting Microsoft make a videogames machine, but it had been a long road for those involved. While he’d already left Microsoft at this point, seeing the affect Xbox had on global entertainment wasn’t lost on Bachus.
He said: “It was really bizarre when Xbox first launched. For such a long time, it was this thing we were doing in secret. First there were four of us, and then there were maybe 20, 30. I remember going into a room with people from Microsoft licensing, which handles OEM licenses and stuff like that, and these guys had been responsible for thinking about how they were going to authenticate Xbox software, make sure that it wasn’t pirated. There were 100 people in the room I’d never met before, and these guys had been thinking about our little project. It was really weird to see how all these people came together and contributed to what we were trying to do.
“It was weird when I’d be out and I’d see people wearing hats with the Xbox logo on them. Even weirder, was that I’d been going to Japan since I joined Microsoft, and I just went and hung out in Akihabra and went to these different software shops; to go to a floor in a games shop that I’d been to a dozen times and see Xbox displays and banners there, and big giant billboards around Akihabara, for me, I think, was the most breathtaking moment.
“I still had this idea in my head that it was this little concept that we were working away on in secret, and the fact that it became a big part of popular culture is obvious intellectually, but emotionally it was overwhelming. It was really cool.”
One step beyond
While Xbox’s launch draws this story to a close, it was the public birth of a console that had already changed videogaming’s landscape forever. There were still major hurdles to overcome, one of the first of which being the original “fat” controller. There was a problem: a lot of people didn’t like it.
Microsoft’s switch to Controller S from the
original, large pad came initially from
negative Japanese feedback. The new
design was so popular the company made
the change worldwide in 2002.
It was unthinkable that Sony or Nintendo would simply drop a console controller in favour of something “better,” but Microsoft did just that. This was more than a move based on usability: the biggest gripe Japanese gamers consistently came back with about Xbox was the size of the controller. It was too big.
“We came from the PC world,” said Fries. “That original controller was designed by the hardware group, and they had a very similar PC controller that was reasonably successful called the Sidewinder.
“It wasn’t a big stretch. Also, if you look at the Dreamcast controller at the time, it was also relatively large. Even an N64 controller; it’s got a bunch of gaps in it, but, again, it’s a pretty large thing. I didn’t think it was as controversial as it ended up being. I wasn’t one of the people saying this was a big problem.
“We got strong feedback out of Japan that this controller wasn’t going to work. As soon as that happened, they started designing a new controller: that’s the controller that ended up replacing the big controller in the US.
“It was designed originally for Japan, and everyone loved it and said, ‘We should just make the the universal controller for the rest of the world.’”
The EU Xbox launch titles – March 14, 2002
Amped: Freestyle Snowboarding Batman Vengeance Blood Wake Dave Mirra Freestyle BMX 2 Dead or Alive 3 Fuzion Frenzy Halo: Combat Evolved Jet Set Radio Future Mad Dash Racing Max Payne NBA Live 2002 NHL 2002 NHL Hitz 2002 Oddworld: Munch’s Oddysee Project Gotham Racing RalliSport Challenge Tony Hawk’s Pro Skater 3 TransWorld Surf Wreckless: The Yakuza Missions
While tweaks were being made to the hardware formula, the software deals were still being cut. Fries himself will probably be best remembered in the Xbox project for his involvement in the Rare deal. Microsoft bought Rare in 2002 for $375 million, an eyebrow-raising figure which resulted from a bidding war with Activision.
“As we moved on from launch, I was working with the Epic guys to put together Gears of War, and I was working with the Rare guys,” he said.
“I met the Stamper brothers initially when we were starting up Xbox. The games business is actually a pretty small community. If I met people and got to know them, who knows what’ll happen in the future?
“Bungie was like that. I met a guy called Peter Tamte, got to know him and we stayed in touch. He’s the guy that called me originally and said, ‘Hey, things aren’t really working out here at Bungie as an indepedent company. We’re thinking about selling, and as long as we’re talking about that, we thought that maybe we should be talking to you too. That was the start of the conversation that ultimately turned into us buying Halo.
“Likewise, I met the Stamper brothers. At the time, I thought they were 100 percent committed to being part of Nintendo, and didn’t really know if it would go anywhere, but I was honestly a fan of their games. Being a gamer myself, it’s always fun to meet your heroes from the games business. We had a nice meeting, and agreed that if there was ever an opportunity to work together we should talk.”
A few years later, that opportunity arose. Rare’s contract with Nintendo was expiring. Nintendo, owning just under half of Rare, had an option to buy the remaining shares. It had already declined to do so once, and it seemed clear it would again.
“We were very interested,” said Fries. “It had the double benefits of adding a new, very experienced developer to our portfolio, of who’s games I was a big fan, and simultaneously taking them away from a competitor. That was very valuable to us.”
Unfortunately for Microsoft, Activision was also heavily involved in the bidding process, causing the price to inflate.
“Activision actually outbid us, and then they couldn’t close the deal,” Fries said. “We’d put a bid in over Activision, but we thought it was too late: they’d already agreed to go with Activision. When the Activision bid collapsed, our bid got to go through. It was a pretty close thing that it didn’t go to Activision, actually.”
Rare’s output surprised many in the wake of the deal. Fries was guarded on his feelings on the matter.
“It’s hard to comment on,” he said. “I’ve always been a big fan of Rare. I’m still a fan of Rare. I certainly had higher hopes in the beginning than where we ended up. But who’s to blame for that? I don’t know. Whenever you create a new relationship there’s new people on both sides, and new requests. They had to learn a new system, and the world of gaming was changing at the same time. I talked about the way Halo differed from console games at the time: Rare represented more that older world than the newer world.
Ed Fries was instrumental in the Microsoft deal to buy Rare in 2002. The Stamper brothers sold their 51 percent holding in the company to Microsoft, after which Nintendo followed with its 49 percent. Microsoft paid $375 million for complete control of the British developer.
“Although, to their credit, they were the creators of GoldenEye, the game that proved you could do a first-person shooter on a console, and that was something we pointed to a lot when we were pushing Halo.”
Microsoft bought Rare for $375 million, buying both the Stamper brothers’ stake and the Nintendo shares to take complete control of the company. Fries insisted, though, that taking developers over, as it had with Rare and Bungie, was never the original intention.
“We didn’t set out to buy people. It wasn’t our opening position. We were happy to work with people as third-parties. It was only in cases that we needed to do an acquisition that we did it. The only opportunity to work with Rare was to buy the company. The only opportunity to work with Bungie was to buy the company.”
Fries left Microsoft in 2004, a year before the launch of Xbox 360. The original Xbox sold over 24 million units globally and acted as a springboard for Microsoft to build a successful console ecosystem in opposition to Sony. It’s unquestionable that Xbox’s story is an extraordinary one.
In his forward to Dean Takahashi’s Opening the Xbox, released in 2002, Seamus Blackley wrote:
“It is a rare and remarkable experience indeed to be able to take part from the very beginning in something that touches so many people, that inspires and excites the imaginations of so many people, and that in the end changes the lives of so many people as Xbox has.”
Xbox was decommissioned in 2005 in Japan, and in 2006 in the US and Europe. Its Live support ended on April 15, 2010.