The Birth of the Xbox

Back in 1998, Sega was trying to leap ahead of the competition from Nintendo and Sony. They had been losing market share so they needed to come up with a really innovative console idea.

You may be asking how are Microsoft and the Xbox are connected to Sega? Microsoft was looking into the console gaming market and how to get their foot in the door. Peter Moore (then President and COO of Sega) and the Sega Dreamcast team needed an operating system to power their new ‘next gen’ console, the Sega Dreamcast. So in May 1998 Microsoft and Sega announced a collaboration agreement for work on the Dreamcast. Microsoft built an optimized version of Windows CE with DirectX for Sega and the Dreamcast was the first console to use CE as an operating system. Both Microsoft and Sega were excited about the partnership and the future looked outstanding for the Dreamcast.

As the partnership progressed however, Sega’s and Microsoft’s visions started to part ways. Microsoft wanted games written for Windows to be portable to the Dreamcast through the common DirectX interface. They also wanted Dreamcast games to be ported to Windows again through the same interface. Sega however decided they didn’t share Microsoft’s vision. Sega chose to abandon the DirectX architecture and instead have game developers make their games using exclusive Dreamcast technology.

Out of this divide came the ‘Xbox Group’ led by Mr. Blackley and consisting of Mr. Bachus, Mr. Berkes and Mr. Hase. This group, in May 1999, met with Bill Gates and the WebTV leaders to pitch the idea of a Microsoft console. The WebTV group thought a console should be spawned out of the WebTV appliance while the Xbox Group was pitching a specialized PC approach with a hard drive. Gates was sold on the idea of having a lasting foothold on the living room and told the two groups to continue researching. In a meeting later in May with Gates, Ballmer and industry heavyweights like Tim Sweeney of Epic Games, Mr. Blackley got support for his specialized PC approach and the Xbox Group was given the go-ahead.

In July 1999 Rick Thompson, the head of the hardware division was brought into the group. His division made mice, keyboards, joysticks etc. In August, J. Allard was put in charge of the Xbox Group. He had helped transition Microsoft into the Internet age. With these changes, many of the original Xbox Group left the group to other assignments while others took non-lead rolls. Mr. Blackley would end up assisting game developers and creating demos. The project was no longer his but he wanted to remain close and involved.

In September 1999, Gates signed off on spending 5-6 billion dollars on development, manufacturing and marketing of the Xbox console. In Jan 2000, Mr. Blackley did a month-long marketing trip in the US, Japan, and Europe visiting game developers and publishers selling them on the idea of the Xbox.

During various dates late in 1999, Microsoft met with hardware component manufacturers to tell them what they have planned and requested proposals. For graphics ATI, Nvidia, 3Dfx and GigaPixel were brought in. For the processor, Intel and AMD were approached. For the sound, Creative Labs pitched an audio solution. In March 2000, thanks largely to Mr. Blackley’s manipulation, Microsoft signed an agreement with Nvidia (who by December 2000 had bought 3Dfx and GigaPixel anyway). Mr. Thompson had wanted to go with GigaPixel’s more economic solution but Mr. Blackley again appealed to the game developers and won support for the more costly Nvidia solution. Also in March, the Xbox Group selected Intel for the processor. It took until October for an agreement to be reached with Western Digital to provide the hard drive for the Xbox.

On January 6th 2001, Bill Gates demonstrated a fully working Xbox at the Consumer Electronics Show in Vegas. Mr. Blackley was on stage to demonstrate the system running Malice and Munch’s Oddysee. Then on May 16th 2001 at E3, Microsoft announces the Xbox system will have 15-20 games at launch and the launch date will be November 8th 2001. The price is revealed to be $299 and 27 online games are in development for their online gaming service.

The Xbox console launches November 8th 2001 as announced at E3. It’s a sell out and Bill Gates gives the first system away at Toys R Us in NY at Times Square. At the 2002 CES, Microsoft announces the Xbox sold 1.5 million units and Mr. Blackley demos Jet Set Radio Future and shows off a bit of the Xbox Live service that’s in the works.

Samus Blackley, the Godfather of the Xbox quits Microsoft on April 22, 2002. He had proposed to his girlfriend on November 8th in Times Square when the Xbox launched and most likely wanted to settle down and start a family.

Work on Trinity aka Xenon aka Xbox360 would start in 2002 with new processor designs and ATI starts work on Trinity’s GPU. The rest is history.

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