Xbox (console)

The Xbox is a home video game console and the first installment in the Xbox series of video game consoles manufactured by Microsoft. It was released as Microsoft's first foray into the gaming console market on November 15, 2001, in North America, followed by Australia, Europe and Japan in 2002. It is classified as a sixth generation console, competing with Sony's PlayStation 2 and Nintendo's GameCube. It was also the first major console produced by an American company since the Atari Jaguar ceased production in 1996.

Announced in 2000, the Xbox was graphically powerful compared to its rivals, featuring a 733 MHz Intel Pentium III processor, a processor that could be found on a standard PC. It was also noted for its PC-like size and weight, and was the first console to feature a built-in hard disk. In November 2002, Microsoft launched Xbox Live, a fee-based online gaming service that enabled subscribers to download new content and connect with other players through a broadband connection. Unlike online services from Sega and Sony, Xbox Live had support in the original console design through an integrated Ethernet port. The service gave Microsoft an early foothold in online gaming and would help the Xbox become a competitor in the sixth-generation of consoles. The popularity of blockbuster titles such as Bungie's Halo 2 contributed to the popularity of online console gaming, and in particular first-person shooters.

The Xbox had a record-breaking launch in North America, selling 1.5 million units before the end of 2001, aided by the popularity of one of the system's launch titles, Halo: Combat Evolved, which sold a million units by April 2002. The system went on to sell a worldwide total of 24 million units, including 16 million in North America; however, Microsoft was unable to make a steady profit off of the console, which had a manufacturing price far more expensive than its retail price, despite its popularity, losing over $4 billion during its market life. The system outsold the GameCube and the Sega Dreamcast, but was vastly outsold by the PS2, which had sold over 100 million units by the system's discontinuation in 2005. It also underperformed outside of the Western market; particularly, it sold poorly in Japan due to its large console size and overabundance of games marketed towards American audiences as opposed to Japanese-developed titles. Production of the system was discontinued in 2005, with Microsoft fully ceasing out-of-warranty support in 2009 and ending Xbox Live support for the system in 2010. The Xbox was the first in an ongoing brand of video game consoles developed by Microsoft, with a successor, the Xbox 360, launching in 2005, followed by the Xbox One in 2013.

Creation and development
Before the Xbox, Microsoft had found success publishing video games for their Windows PCs, releasing popular titles such as Microsoft Flight Simulator and the massively successful Age of Empires. However, Microsoft had not delved into the home console market of video games, which was dominated at the time by Sony's PlayStation. Sony was working on their next video game console, the PlayStation 2, announced officially to the public on March 2, 1999, and intended for the system to act as a gateway for all types of home entertainment. Microsoft CEO Bill Gates saw the upcoming PS2 as a threat to Microsoft's line of Windows PCs, worrying that the all-encompassing system could eliminate consumer interests in PCs and drive them out of the market. With video games rapidly growing into a massive industry, Gates decided that Microsoft needed to venture into the console gaming market in order to compete with Sony. Previously, Sega had developed a version of Windows CE for its Dreamcast console to be used by game developers. Additionally, Gates had directly approached Sony CEO Nobuyuki Idei prior to the public announcement of the PS2 in regards to letting Microsoft develop programming software for the console, but the offer was declined by Idei in favor of having Sony create proprietary software.

In 1998, four engineers from Microsoft's DirectX team - Kevin Bachus, Seamus Blackley, Ted Hase and DirectX team leader Otto Berkes[13]- began discussing ideas for a new console which would run off of Microsoft's DirectX technology.[14] Nat Brown, the Windows Software Architect at Microsoft, would also become a regular contributor to the project after meeting Hase in November 1998. The project was codenamed "Midway", in reference to the World War 2 Battle of Midway in which Japan was decisively defeated by American forces, as a representation of Microsoft's desire to surpass Sony in the console market. The DirectX team held their first development meeting on March 30, 1999, in which they discussed issues such as getting a PC to boot at a quicker pace than usual. The console would run off of Windows 2000 using DirectX 8.1, which would allow PC developers to easily transition into making games for the console, while also granting it a larger processing power than that of most other home consoles. According to Blackley, using PC technology as the foundation for a video game console would eliminate the technological barriers of most home consoles, allowing game creators to expand further on their own creativity without having to worry about hardware limitations.

The 4 DirectX team members encountered disagreements with the Silicon Valley engineering team behind WebTV, which joined Microsoft after they purchased the rights to the device. Microsoft executive Craig Mundie wanted the project to be led by the WebTV team, who believed the console should be built from the ground-up as an appliance running off of Windows CE; however, the DirectX team were adamant about the idea of repurposing PC hardware components, such as a hard disk drive, arguing that they were cheaply manufactured and could easily be updated every year. The 4 developers gained the support of Ed Fries, the head of Microsoft's gaming division, who believed the use of a hard drive in particular would give the console a technical edge among competitors despite its high manufacturing cost. The two opposing teams both pitched their arguments to Gates on May 5, 1999 at a meeting attended by over 20 different people. WebTV's team, among whom were Nick Baker, Dave Riola, Steve Perlman, and Tim Bucher as well as their sponsor, Craig Mundie, made the case that creating an appliance would be far cheaper, highlighting that most consoles were generally sold at around $300. They also wanted to use a custom-made graphics chip, the likes of which could be shared across several different home devices. Conversely, Fries, vouching for the DirectX team, argued that using a PC hard drive would and set Microsoft's console apart from competitors by allowing for the direct implementation of online access, an argument which Gates sided with. When Gates questioned if PC games could be effectively ported to the new console, Blackley explained that the machine would utilize DirectX hardware, meaning that they could be converted easily. Gates heavily favored this proposition over WebTV's, whose concept relied on Windows CE, a heavily stripped-down Windows variant that wasn't compatible with DirectX. As such, Gates sided with the DirectX concept, and gave Berkes' team the go-ahead to create a new video game console. Despite this, WebTV would still play a part in the Xbox's initial launch.

The DirectX team began constructing prototype consoles, purchasing several Dell computers and using their internal parts. Among the names considered for the new console were a number of acronyms, including "Windows Entertainment Project" (WEP), "Microsoft Total Gaming" (MTG), "Microsoft Interactive Network Device" (MIND), and "Microsoft Interactive Center" (MIC). Also among the names considered was "DirectX Box", referring to the system's reliance on Direct X. At one point, Hase jokingly came up with the names "XXX-Box" and "DirectXXX-Box" as a nod to the system's higher volume of adult content compared to Sony or Nintendo's consoles. "DirectX Box" was quickly shortened to "Xbox" through an e-mail conversation, and was ultimately favored by the development team, though a number of spelling variants were tossed around, such as xBox, XboX, and X-box. Microsoft's marketing department didn't like this name, suggesting "11-X" or "Eleven-X" as alternatives. During focus testing, the company put the name "Xbox" on the list of possible names during focus testing simply to prove how unpopular the Xbox name would be with consumers. However, "Xbox" proved to be the more popular name on the list during consumer testing, and was thus selected as the official name of the product.

When the physical design of the controller began, circuit boards for the controller had already been manufactured. Microsoft had asked their supplier, Mitsumi Electric, for a similar folded and stacked circuit board design used in Sony's DualShock 2 controller, but the company refused to manufacture such a design for Microsoft. This led to the controller being bulky and nearly three times the size of Sony's controller. This initial controller design was never launched in Japan, where the console instead launched with a smaller, redesigned version named "Controller S" that did use the more compact circuit board design.