Last month we looked at the impact that PlayStation 3 had on Sony and the industry as a whole. We delved into the mistakes they made and how their course correction is still being felt to this day. The story of Xbox is very different to that of PS3 but their legacies have plenty in common. Both established modern industry standards, both taught their respective companies many lessons going forward and both retain sizable user bases despite being widely criticised for various reasons back in their day.
A Little Context
It’s said that Bill Gates himself wanted in on the console market once he heard of PlayStation 2’s capabilities. Believing that Sony’s coming machine would be a multimedia powerhouse, Gates was concerned that PS2 would eat Microsoft’s PC market-share.
While it may seem unthinkable in 2021 to launch a new system to compete with Sony and Nintendo, Microsoft’s timing was as good as it could have been. When exactly the top brass in Redmond decided to get serious is known only to a select few but the process of tackling the console industry gained momentum in 1999.
At this point, Nintendo had been struggling with their N64, Sega had been in a steady decline since their peak in the early-90s. If there was room at the top table, it was at the turn of the millennium.
A Best in the Making
On the other hand, Sony was on its way to its first ‘best-selling console’ title. It was also in the process of maintaining the huge hype built for PlayStation’s successor. PlayStation 2 was coming in 2000/01 and was without doubt the most anticipated console of all time. Microsoft may not have known that PS2 would outsell any console in history but they did know they faced an uphill task.
If 2000 was the right moment to break into the console market, Microsoft was the right company. It had pre-existing studios and relationships with a host of other development houses. MS had provided operating systems and environments specifically for gaming before.
Its two main weapons in attempting to slay a giant would be those priors with PC and huge piles of cash.
The X Stands for Xperience (But Mostly DirectX)
Microsoft’s experience in some areas and lack thereof in others was plain to see with OG Xbox.
Xbox’s API was based on DirectX 8.1, so to many houses it was relatively easy to programme for. Xbox had a suite of native graphic effects for devs to exploit with minimal effort. PC ports were a doddle even though the planned use of a Windows OS was scrapped.
Xbox’s networking capabilities and front-end were years ahead of others. Xbox Live offered a centralised and ready-made online infrastructure for devs to easily integrate with their titles. It could offer software to download, something that had only been experimented with on consoles but Microsoft had done for years on PC.
Hardware Hard Times
The hardware was unrefined though. A gigantic, bulging slab with no personality save for a rubbery green blob. It was loud for its time (though much quieter than 360, PS4, Xbox One). Xbox’s controller, in particular, was derided for its size and prompted a redesign within 18 months of the console’s release.
In their defence, Microsoft’s team had designed and built a console in around two years. They had used their nous with PCs by using laptop components to take a shortcut during development and as a result had little flexibility with the size of the innards.
Their inexperience in controller manufacture had led them to design the board for their Duke before the chassis. They had also been rebuffed by electronics production giant Mitsumi when seeking their help in shrinking the Duke board. How much of the Duke debacle can be blamed on Xbox is open to debate.
A Hammering
Sony destroyed all comers in the early-2000s. With momentum, tentpole franchises that had consumers frothing at the mouth and unmissable exclusives (or timed ones), PS2 was unstoppable. Their decision to ship with DVD playback drove early sales. However DVD’s impact upon the eventual 150 million sales was once overstated but now oddly forgotten.
Its year lead over GameCube and Xbox helped a little but Nintendo had faltered by skewing younger with GameCube. Xbox’s problems ran deeper. It had tanked in Japan thanks to the massive console, even more massive controller and a slew of very Western AAA games.
Xbox’s excess power and innovative built-in hard-disk were costly. Each console was losing $125 a pop so aggressive price-drops from the competitive $299 launch price in order to undercut Sony were not possible. In the end, cuts to RRP were only done to match PlayStation 2.
Game Over
By the final whistle, Xbox would sell 24 millions units worldwide. Fewer than one per every six PS2 units sold. But they had outsold GameCube and garnered acclaim for Xbox Live’s robust feature set and a select few exclusives. Xbox had built a core following, albeit in select markets.
Microsoft had made massive inroads in their home continent and the UK. The rest of Europe had given it a promising reception but PlayStation was entrenched in Germany, France and interestingly, Ireland. Ireland was second only to Japan in terms of per-head PS1 sales and 47% of Irish households would end up with a PlayStation 2, beating Japan’s uptake rate.
Network Upgrade
For more detail on Xbox Live 1.0 and its legacy…
PlayStation 2 and Sega Dreamcast both offered networking capabilities but both lacked the foresight to provide such a native service. On the hardware side, PS2 lacked any connectivity out of the box. Subsequently, uptake of the broadband adaptor for the first model were low which discouraged developers from investing in online functionality for their games. This was exacerbated by the lack of a unified service that left devs responsible for developing and maintaining their online services.
While Dreamcast shipped with a modem, a broadband adaptor was sold separately. This left potentially amazing online experiences held back by the lowest common denominator, dial-up connections. While it did have a unified service for each major region, a lack of resources and a very late launch hurt the quality of their product. And worse, they hurt the perception of the SegaNet/DreamArena brand. (Xbox Live also launched after the Xbox itself but Sega had marketed their console heavily around its online capabilities and even received censure for its failure to deliver at launch.)
The Personal Touch
Xbox offered profiles, friends list, messenger, voice chat all centralised and standardised. Adding this superb Xbox Live 1.0 functionality to games was trivial compared to its contemporaries. And with every Xbox owner a potential online player the decision to go Live was easy for devs and publishers. This initiated a cycle where more Xbox owners were tempted online which only encouraged the proliferation of Live-enabled games.
Halo 2
The Halo series has seen its esteem decline for the best part of a decade. A decline that has partially occluded the true impact that Halo 2 had on gaming. One fact that was never lost to time though is that Halo 2 was equipped with a bar-raising online experience.
Online multiplayer wasn’t an afterthought or an extra for Halo 2, it was a fully integrated set of fully-fleshed out modes on maps designed solely for online play. Its deployment of skill-based matchmaking was revolutionary. These achievements are accepted as canon in video games’ storied history.
But it’s often forgotten that Halo 2 was an explosion in mainstream interest in video games. Halo 2 was the first video game to hold the outright day one revenue record for all media. The first video game to capture the public imagination in the same way as a movie or music album.
It was a sign of the unseating of Japan as the cultural and financial centre of the medium. First-person shooters were a Western genre that Japanese studios had little interest and experience in. FPS would take over gaming on strength of Halo 2 and its clones, leaving many Japanese developers in the cold for a decade.
Lessons Learned
Microsoft would resolve to not be beaten to market again. Xbox 360’s commitment to launching in 2005, come hell or high water, drove their early sales. Which worked in tandem with a steady stream of titles by third-party publishers groomed during Xbox’s run with a host of first or second-party titles aimed at casual players. Some of PlayStation’s most recognisable exclusives (or timed ones) would appear on Xbox 360 at the same time as PS3. The cycle of sales, where more console sales encourages game development which drives console sales, kicked in hard for Xbox 360.
Xbox 360 would be cost-effective and arguably would have been able to undercut Sony even if Sony didn’t release PS3 at $599. Where each Xbox sold at a huge loss and Xbox as a whole was well-beaten by break-even time in 2004, Xbox 360 per-unit costs broke even within a year of launch.
Leaner
Another area where Microsoft learned their lesson was in sizing. Xbox 360 was much smaller than Xbox and the controller was much, much smaller than the Duke.
Interestingly all three of these – early, cheap and small – would each contribute to 360’s failure rate. The Red Ring of Death is as much a part of Xbox’s legacy as 360’s.
Lasting Innovation; Good and Bad
Some of Xbox’s innovations are standard to this day.
Xbox began the trend to more PC-like architectures. Designing for these types of architectures was cheaper and easier for Western developers to get to grips with. Along with the shifting Worldwide tastes in video games, this accelerated the ascendance of Western studios over those in Japan. Series like The Elder Scrolls and Counter Strike made the leap to console via Xbox. Many more made the leap later because of Xbox’s success with PC ports.
The substantial onboard storage offered more than practically-endless game saves. It offered the ability to download games and rip CDs for use in its music player or for use in-game. Game and media downloads are a core part of modern consoles but back then it was still novel.
A Gamble
The provision of an ethernet port was a stroke of genius. Its inclusion was hotly debated as it wasn’t all that common in homes during hardware development but by the time Xbox Live launched, it had become established outside of offices and savvy PC users. Similarly, broadband networking as standard may have sounded like an expensive inclusion that nobody would use in 1999 but by Halo 2‘s release, its uptake was exploding. By 2004, 25% of US adults had a broadband connection, up from 9% at Xbox’s US release in 2001.
Serving Games
On the services side, that LAN port and broadband networking fostered the absolute best online console multiplayer that money could buy. Xbox had built interest in marquee online titles and could figure it all out with no real competition.
Xbox Live remained the standard bearer for console services for the 7th generation. The service had a head start on services and infrastructure as well as that steady stream of PvP cash. That was, until PlayStation could catch up in terms of quality and feel emboldened to start charging also.
We hope you enjoyed the first in our ‘Enduring Legacy’ series. Our previous legacy was that of PlayStation 3 and our next is the Nintendo 64.
