Inside The Xbox
Seamus Blackley, Ed Fries and others reveal how Microsoft boldly battled its way into the console industry
The idea of Microsoft making a games console in 1999 was fucking ludicrous!” Seamus Blackley’s recollection isn’t wrong, but such a notion seems like ancient history today. Microsoft is now established in the console gaming industry, with a tenure that is soon to match the likes of Sega and Atari’s hardware ventures, so it’s easy to forget a time when journalists openly questioned how such a “terminally uncool” company could make a successful incursion into an entertainment business. But the Xbox did succeed thanks to a band of committed gamers, a forward-thinking approach to development and a boatload of cash – and there’s never been a better time to get into the console than today, thanks to its cheap games.
The Xbox story begins with Seamus Blackley, who in the late Nineties was at Microsoft and in charge of entertainment graphics on Windows – essentially, getting multimedia and gaming applications working nicely. “Sony announces the Playstation 2, and they say it’s going to replace the PC,” recalls the industry veteran. “I had the roadmaps of all the graphics card manufacturers – 3DFX, Nvidia, ATI. I was visiting my girlfriend who was at that point living in Boston, flying there, and I realised that the roadmap for graphics from the guys making cards for the PC was going to far exceed the performance of what Playstation
MICROSOFT IS ONE OF THE TITANS OF TODAY’S CONSOLE GAMING WORLD, BUT IT WASN’T ALWAYS THIS WAY. NICK THORPE SPEAKS TO THE MEN BEHIND THE MACHINE AND ITS GAMES TO FIND OUT HOW THE WINDOWS COMPANY INVADED THE LIVING ROOM…
was going to do.” The only problem for Seamus was the PC platform itself. “I’d been making PC games at that point for many years. You have to pander to the lowest common denominator, so you can never make a game that actually uses the full performance of any of these things, whereas on console you can because obviously you’ve got a single hardware target.”
The appeal of a single platform was somewhat rooted in Seamus’ recent development history. “I had nothing to lose but I was also passionate, because I had this titanic and horrible failure with the game Trespasser,” notes Seamus. The Jurassic Park tie-in was ambitious – its environments, physics engine and rendering techniques were far beyond what most games had to offer in 1998, but it was shoved out of the door early and required a monstrously powerful PC to run acceptably. Together with fellow Directx engineers Kevin Bachus, Ted Hase and Otto Berkes, Seamus drew up a plan for a “Directx Box” console. “Our entire goal was to make a box for developers, because we were all developers,” Seamus explains.
Rather than using the custom components of its competitors, the team chose to employ largely off-the-shelf PC parts in the hardware design. “At that time, everybody made games on the PC. All the Playstation games – even Nintendo, the PC was the development platform. They would have a target, and then they would compile it for this other platform, because the PC had all the tools,” explains Seamus, explaining the philosophy behind this choice. “So the basic, simple thought is why don’t we just have the target platform also employ that architecture? Then it’s super trivial and nothing gets in your way.
If we can do that, then we should have a huge advantage in making better content, and in a content business that’s the win.”
To get that content, the Directx team would have to work with Microsoft’s established gaming division. “I’m someone who loves games, and
I had left the Office side of the company to run Microsoft’s game business because of that,” remembers Ed Fries, former vice president of game publishing at Microsoft. “I had worked for about four years to grow Microsoft’s game business on the PC and we had done well there, so we were just starting to think about how we could grow more and faster. That involved thinking about getting into the console world, where we hadn’t really done anything yet. So that was what was in my head when the guys from the Directx team first walked into my office and proposed the original Xbox.” Ed would soon find himself as part of that team, managing Microsoft’s internal Xbox software development efforts, and after launch he became responsible for third-party relations, too.
Selling the Xbox vision was easier said than done, in part because the Xbox as a consumer entertainment device didn’t fit the company culture of selling business software. “One of the huge problems we had was that we were at the Windows company,” Seamus explains. “We said, ‘Hey, we want to make this games console,’ and every Microsoft guy who had been steeped in operating systems said, ‘Oh yes, Windows for the living room – it’ll run Windows and we can upgrade it,’ and we would freak out and say, ‘No, it’s fixed, that’s not how this business works.’ We had to explain to them that the console business was a business in which you sold content, and made money from the content, not from the operating system.” Seamus and the Xbox team would have to fight an uphill battle against corporate caution, and soon learned that the best way to fight it was to make out that there was no battle at all. “There were a lot of people who said it should be Windows for the living room, and we surfed on that – we let people believe that because it helped us. Members of our tiny little rogue tribe, we understood that the end result was going to have to be no operating system.”
While an internal political battle is no surprise, what comes as a shock is that despite being aware of the company’s power and resources, the games industry was also sceptical of Microsoft’s chances
WHEN IT WAS LOOKING BAD, PEOPLE CALLED IT ‘COFFIN BOX’ - YOUR CAREER’S IN THE COFFIN IF YOU WORK ON THAT! Seamus Blackley
in the console market. “For the first six months, Xbox was me and Kevin going around and giving a presentation for developers,” recalls Seamus. “We had a meeting with the president of one of the big Japanese game companies. He proceeded to tell me that Xbox was going to fail, that no American console could succeed, and that I was going to be unable to get Microsoft to do it, and that nobody was going to believe that Microsoft would carry through.” That wasn’t the only hostile response Seamus endured, as another incident at a large publisher’s Canadian studio illustrates. “The guys who ran that office took me aside and told me I couldn’t speak there because they didn’t believe Microsoft would do a console, and that I could pull it off. The whole audience was waiting for 40 minutes while they grilled me.”
Right up until the green light was given, other people wanted to have their say, and the Xbox team found itself fending off attempts to turn the project into Web TV, a tablet and other such things that were closer to Microsoft’s comfort zone – as well as attempts to kill it stone dead. “When it was looking bad, people called it ‘Coffin Box’,” remembers Seamus. “Your career’s in the coffin if you work on that! People would say this to me and I’d say ‘No, it’s going to succeed’ and then I’d drive home crying.”
What ultimately kept the project from failing was the support of the company’s old guard, from the early Windows days. “A few people who were around from that era, and remembered what it was like, were reminded of it by what we were
doing with Xbox and helped us out,” Seamus recalls. “Chief amongst them was Bill Gates, but also Rick Rashid who ran Microsoft Research and Rick Thompson who ran the hardware group, and many, many others who loved the spirit of the thing, and backed us up politically in ways that I didn’t even understand that we needed.”
After getting the green light, Ed had less than two years to put together a launch line-up. As well as commissioning games from respected external studios, Microsoft employed what Ed calls an “all hands on deck” approach to game development internally. The teams that had been responsible for the company’s successes in PC gaming were involved, but for various reasons didn’t bring the old properties across. “It didn’t really make sense to take Flight Simulator over, but it was certainly considered at times,” Ed recalls. “The guys at Ensemble Studios looked at Age Of Empires and had multiple Xbox prototypes that they were developing, but none of those ended up turning into something real. The FASA group had a lot of contributions, Crimson Skies is a well-loved original Xbox game, and that came out of a PC game that the group had developed a few years earlier.” While not a conscious choice, this ultimately gave the Xbox an identity distinct from Microsoft’s PC gaming heritage.
For all of the gaming expertise that already existed within Microsoft, the team that would ultimately make the biggest impact was a new acquisition, Bungie. The team had a good reputation from the Marathon and Myth games,
but had hit financial trouble and was up for sale. “As far as Bungie goes, I definitely bet everything on Halo,” says Ed. “I had to do a deal with [minority Bungie owners] Take-two, and basically the way we put the deal together was they got the back catalogue, all the old work and brands from the past, and all I was going to get was the team and Halo.” The promising first-person shooter had already been revealed for PC and Mac, but Microsoft decided it’d be a great Xbox exclusive.
Did I know then that Halo would be the killer app? In a lot of ways, we didn’t really know what we were doing,” confesses Ed. “We had never done a game in the console world before. We were getting a lot of mixed feedback – a lot of people looked at Halo and thought it looked like a PC game, they thought it wasn’t colourful enough, the characters weren’t cartoony enough. There was a nagging feeling that because we had come from a PC heritage, that this was the game that appealed to us, but it wouldn’t to the regular console audience.” Knowing that the office favourite might not be universally appealing, the team made sure to back a safer bet too. “At the same time we were working with Lorne Lanning, who is a super talented guy with his Oddworld franchise which had been proven successful on the Playstation,” Ed explains. “That was another game we were excited about, so we launched both games with a pretty similar amount of marketing support.”
What helped every team was that the system was easy to work with. This was the biggest goal for the system, and by all accounts the team delivered on this front. Chris Sutherland was at Rare as the company transitioned from Gamecube to Xbox, and remembers the move being relatively painless.
“As you’d expect with Microsoft, there was plenty of documentation so it wasn’t too tough to move over,” the programmer recalls. Former Bizarre Creations developer Stephen Cakebread was also impressed with the developer support, particularly when it came to tools. “They were a significant step up from the tools on other platforms, and eventually they even surpassed what was available on the PC,” he explains. “Even though the Xbox had better raw performance numbers over the competition, I think the improved environment for devs is what made the most difference.” It was a big win for the team, and one which Seamus considers to be a signature achievement for the platform. “Sony and Nintendo got away with treating their developers terribly,” he says of the pre-xbox years. “The thing that I’m most proud of, that I think everybody can be most proud of, was that Sony suddenly had to do developer support.”
It also didn’t hurt that as a piece of hardware, the Xbox was a beast. The system packed a 733MHZ Intel Pentium III CPU, a custom Nvidia Geforce 3-based GPU, 64MB shared RAM and
AS FAR AS BUNGIE GOES, I DEFINITELY BET EVERYTHING ON HALO… ALL WAS GOING TO GET WAS THE TEAM AND HALO
ED FRIES
a DVD drive. The machine also included an 8GB hard disk – a first in console gaming. This was a big advantage, as former Bizarre Creations programmer Stephen Cakebread explains: “The HDD was faster than a DVD, so if you copied files from the DVD to the HDD you could load them much faster next time around, with the additional bonus that you could load from both the HDD and DVD at the same time! (eg, loading levels from one and streaming music from the other).” Overall, the Xbox had the specification of a decent PC of the time (which still would have cost twice as much as an Xbox on launch), but as the Xbox wasn’t burdened with the task of running Windows and its developers didn’t have to worry about supporting lesser systems, its gaming performance was astonishing.
When the press finally got their hands on the Xbox, reception was broadly positive though there were some reservations about the console’s look, as well as the enormous joypad nicknamed the ‘Duke’ by players. “You should ignore
the naysayers and doom merchants who have ignorantly dismissed Xbox out-of-hand,” opined Edge after taking delivery of the finished product. “It’s expensive, corpulent and the joypads aren’t entirely ergonomic – but by the gods is it powerful.” What’s more, the software accompanying the machine delivered. In particular, Halo was hailed as “the most important launch game for any console, ever” by Edge and received the magazine’s fourth 10/10 score. Other reviewers were similarly impressed, as evidenced by its score of 97 on review aggregator Metacritic.
I THINK THE IMPROVED ENVIRONMENT FOR DEVELOPERS IS WHAT MADE THE MOST DIFFERENCE Seamus Blackley
The first territory to receive the system was North America, on 15 November 2001. Propelled by the popularity of Bungie’s Halo and demand generated as a natural result of the holiday season, the Xbox sold an impressive 1.5 million units in the region before the end of the year. It was an encouraging start for a system that had faced so much scepticism, and North America would remain the console’s stronghold for the duration of its lifetime – for every Xbox sold in the rest of the world, Microsoft sold two on its home continent.
However, things weren’t nearly so rosy in Japan. Microsoft brought 250,000 consoles into the country for launch, and attracted some very high profile Japanese developers. Tecmo jumped in with both feet and provided some great exclusive
games, and Sega did the same while also building its Chihiro arcade platform around the console. However, others were more cautious. The likes of Capcom, Namco and Konami all jumped aboard, but didn’t necessarily bring their big hitters with them – Resident Evil and Tekken didn’t appear at all, for example. Companies like Square, Enix and Atlus stayed away completely. The Xbox never shed the perception that it was a product built by a foreign company for foreign audiences, and never gained a foothold in Japan as a result, selling a miserable 450,000 consoles over its entire lifetime.
Trading also proved difficult in Europe. The Xbox launched to great fanfare on 11 March 2002, but sales quickly dropped off and after just five weeks Microsoft announced that it would slash the price of the console by a third, cutting it from £299 to match the Playstation 2’s £199 price tag. The move understandably upset early adopters, who were offered two free games and an extra controller to make up for the unprecedented price drop, but it did serve to stabilise the system – during the week of the cut, Xbox sales were neck and neck with PS2 sales. The move also sparked a price war. Nintendo cut its Gamecube price before even launching, and two subsequent price cuts brought the Xbox down to just £129 by April 2003. Cutting the price of the console by over 50 per cent in a little over a year did eventually convince European consumers to pick up the machine, but also ensured that Microsoft took heavy losses on every piece of hardware sold.
Microsoft also took other measures to ensure the success of the Xbox. A major one was the purchase of Rare, long considered to be one of Nintendo’s key studios – a shock to players at the time, but something that had been brewing behind the scenes for some time. “I was equally shocked when they approached me and there was an opportunity to work with them,” Ed reveals, surprisingly. “They had an interesting deal with Nintendo. Nintendo owned 50 per cent of Rare, and when they put that deal together, it was done well. They didn’t want to sell half of their company and never be able to sell the other half. So they had a deal where [Nintendo] buys half, and then has the option to buy the other half within a number of years – and if you do not buy the other half, then [Rare] has the right to buy back your half at fair market value.” The deal had already expired by 2000, but Nintendo paid for a two year extension and then declined to buy the company when the opportunity came around again.
Microsoft’s $375 million purchase of Rare was made public on 24 September 2002, the day after Rare’s only Gamecube game was released. “I’d known there was a decision to be made between Activision and Microsoft,” recalls Chris, who didn’t perceive any shift in focus after the deal. “Rare wanted to carry on making the kinds of games it had been making and that would have been the wish of Microsoft too!” Ironically, though, Rare actually produced more games for Nintendo’s Game Boy Advance than it did the Xbox during this time – only Grabbed By The Ghoulies and Conker: Live & Reloaded appeared on Microsoft’s console, though it wasn’t the only project Rare was working on. “Kameo was being built on the original Xbox, but it was brought over with a visual overhaul to the Xbox 360 as a launch title,” explains Chris.
In November 2002 Microsoft launched its online gaming service, Xbox Live. The high-end service relied on broadband internet connections and required an annual subscription, but was far in advance of the decentralised online experience on PS2 and the near-total lack of online games on Gamecube. Players enjoyed relatively lag-free and stable sessions, had a single username across all games, as well as systems for adding friends, sending messages and even voice chat. In
November 2004, the service was extended to include downloadable game distribution via the new Xbox Live Arcade service, which allowed players to buy small, download-exclusive games such as Bejeweled and Ms Pac-man for relatively low prices. As it arrived late in the life of the Xbox, this was a relatively short-lived service that hosted less than 30 games in total.
While players looking for online console gaming were undoubtedly best served by Microsoft, it’s worth remembering that those customers were still a relatively small market – Xbox Live picked up a million subscribers by July 2004 and doubled that to 2 million by July 2005, but take-up of the service was never beyond ten per cent of the total Xbox user base at any given time. “I think Xbox Live truly took off with the 360,” says Stephen, who points to the technical limitations of the era. “Having a wired internet connection to whatever room you had your gaming system setup in was a big ask for a lot of people, while Wi-fi is ubiquitous now.”
By 2004, the Xbox had gone from office punchline to legitimate knockout artist. The enormously popular Grand Theft Auto games made their way to the platform, as did Konami’s Pro Evolution Soccer. EA launched its first Xbox Live compatible sports games, and in November, Halo 2 became the biggest entertainment launch of all time. But despite its successes, the Xbox was not a tremendously long-lived console. On 12 May 2005, just three-and a-half years after the Xbox had initially gone on sale, Microsoft unveiled the next-generation Xbox 360 for release later that year. On the same day, Nvidia announced that Microsoft had ceased orders for the Xbox GPU and wouldn’t be taking any more after 1 August – effectively shutting down production of the original console for good. Xbox owners would still enjoy a full slate of games into 2006 thanks to third party publishers, but releases dropped off following that year’s holiday season, with just a handful of licensed games and annual sports updates arriving in 2007. The last Xbox game to be released was Madden NFL 09, in August 2008, and original Xbox Live shut down on 10 May 2010 (some weeks after its original 15 April termination date, thanks to some dedicated Halo 2 players).
IF I HAD REALLY KNOWN HOW POWERFUL SONY AND NINTENDO WERE, I WOULD HAVE PROBABLY GIVEN UP AND THERE WOULDN’T BE AN XBOX Seamus Blackley
For all of Microsoft’s clout as a company, and its considerable financial expenditure, the Xbox could only manage second place in its generation. “If I had really known how powerful Sony and Nintendo were, I would have probably given up and there wouldn’t be an Xbox,” admits Seamus. 24 million Xbox consoles were sold, scraping ahead of Nintendo’s Gamecube by just over 2 million units but falling massively short of the 155 million Playstation 2 consoles that Sony sold. However, Microsoft gained many positive things from the original Xbox. It successfully established itself as a major player in the console market, building consumer recognition and developer relationships that would pay dividends for the Xbox 360. What’s more, the Xbox allowed Microsoft to influence the wider console market, as the console shaped the future development of games consoles on a technical level. Every major console released since the Xbox has included some form of mass storage, built-in broadband internet support and support for downloadable software.
If you missed out on the system first time around, now is a great time to catch up as the Xbox is possibly the best value platform in retro gaming right now. Very few games are anywhere near their original price, and most are ridiculously cheap – even the very best on the platform. Original hardware isn’t too hard to come by, and if you’re stuck for that the Xbox 360 will run certain games (be sure to check before you buy). Microsoft has also announced plans for original Xbox backwards compatibility on the Xbox One.
Looking back at the impact of the Xbox, Chris feels it comes down to the skills transferred from Microsoft’s other business. “This was really Microsoft’s first sizeable foray into gaming
entertainment; yes, they’d had Flight Simulator before and had built joysticks, but creating their own console was in many ways an unexpected move for a company that was more associated with operating systems and business software,” he explains. “Their experience with working with developers on those more conventional products would have helped them build a system that would also be easy to develop for by game studios.” But that’s far from the only factor, as Stephen reminds us. “Halo defined the Xbox,” the coder states. “There were plenty of other good games, but Halo was why you bought one in that first year after launch.”
However, the last word must go to Seamus, for whom all of the political battles and the frustrated car journeys home were worthwhile because of the players themselves. “There are all of these times in my life when, wandering around, I meet somebody who tells me that Xbox stopped them from killing themselves during their divorce, or was the only reason they could survive as a kid in some horrible situation, or got them interested in studying science and now they have a PHD in chemistry. Every time that happens I choke up because I see a person in front of me whose life is better, and there’s really nothing like that. That’s what it’s about.” And he’s right – the Xbox made an impact on the gaming industry and on Microsoft, but the real legacy of the Xbox lies in every Halo LAN party, your moral choices in Fable, and all those times you stayed up a little too late on Xbox Live.
Special thanks to Seamus Blackley, Ed Fries and everyone else who contributed to this article.