Kapzer's Realm

Xbox 360: An Entertainment System

This is a repost of an essay written in 2008.


History of the Company and Platform

The History of the Company

The Xbox 360 is made by the infamous company Microsoft, which is headed by one of the richest men in the world Bill Gates.  However, Microsoft started small in 1975.  Founded by Paul Allen and Bill Gates, Microsoft started as a pair of computer addicts who had been inspired by the MITS Altair.  When they saw the microcomputer on the cover of computer magazine “Popular Electronics” they realised it was the optimal time to start Microsoft [piesoftware.co.uk, 2009].  The pair started off writing software, in particular operating systems.  They adapted the BASIC (Beginner’s All-Purpose Symbolic Instruction Code) which was a teaching tool used to teach students how to program.  From this they created Microsoft BASIC, which they managed to sell to MITS as the first computer language program for a personal computer [thocp.net, 2009].

Microsoft is also known to have a rivalry with Apple Computers, which was existent from 1976 when Apple was founded.  They created Applesoft BASIC, which was superior to Microsoft BASIC, but by that time Microsoft already had an international office in Tokyo, Japan under the name of ASCII Microsoft [thocp.net, 2009].  This rivalry was one of the reasons Microsoft had some rough early years.  However, the competition also benefitted the company as they strived to do better.  Microsoft’s true success did not start until they had managed to get a partnership with IBM to offer their products on their personal computer in 1981.  This computer used the now IBM-licensed MS-DOS operating system, as well as Microsoft BASIC, and their programming language PASCAL [piesoftware.co.uk, thocp.net, 2009].   This took the public by storm, as well as Apple Computers.  They had recognised the success of Microsoft and were inspired by it, rather than competing with it they took an alternative route.  Microsoft began developing products for the Apple Macintosh, which was deemed a revolutionary computer [thocp.net, 2009].

In 1986 Microsoft became a public company, instead of a private company under the name on Microsoft Incorporated.  By then, Bill Gates, the acting CEO who was no longer directly managing the company became a billionaire [piesoftware.co.uk, 2009].  Soon after, the first version of Windows was created and this also took the public by storm, as it offered a graphical interface to MS-DOS.  By 1993, Windows operating systems were selling a million copies per month [piesoftware.co.uk, 2009].  By the 90s, Gates realised that the next direction for Microsoft was the internet, and to expand into further fields than just hardware and operating systems.  That is where the Microsoft we recognise today truly began.


History of the Platform – The Story of the Father

The Xbox 360 had a predecessor, the Microsoft Xbox.  This product was introduced in2001/2002 when there were competitor products in the sixth generation of game consoles, namely Sony’s Playstation 2 and Nintendo’s GameCube.  As the company’s first venture into console gaming it was accused to be a “PC in a box”.  However, Microsoft aimed for the console to be different, rather than just another game console.  Released 20 months after Sony’s Playstation 2, the Xbox was not as well received and therefore did not sell as well as originally planned [teamxbox.com, 2009].  The competition was fierce but in the end the Playstation 2 was deemed the victor of the sixth generation console war.  However, Microsoft did have one success.  Despite not succeeding and incurring losses with the 24-million selling Xbox, one of the world’s most popular videogame franchises was created – the Halo franchise.  The Xbox’s best selling game was Halo 2, which sold 8 million copies worldwide [Wikipedia.org, 2009].  At start Microsoft was feeling the pain, as EA refused to endorse the Xbox.  Microsoft became desperate and to encourage a partnership between Microsoft and EA, shipped 500 development kits to EA development studios worldwide [computerandvideogames.com, 2009].

It was rumoured that the Xbox was not the original name for the console.  It was originally planned to be called DirectX-box due to the console’s heavy use of DirectX, Microsoft’s graphics accelerator which is the most used accelerator today.  However, references to DirectX still exist in the widely recognised X logo, and the X shape of the console’s case [Takahashi, 2002].  After the poor sales resulting in losses, Microsoft thought it had realised it’s mistakes on the Xbox and sought to redeem themselves by ‘not crying over spilt milk’ and moving quickly onto a successor, the Xbox 360.


Development of the Platform

Learning From The Past – Platform Development

From the start, the Xbox team realised that they had made a mistake in pursuing pure power like they had done in the first console.  This was, however, the very aspect of the console that caught the eye of gamers and the media.  The team decided to make the next console powerful, but in a different way.  They concentrated on making the next console powerful in terms on user interactivity, rather than pure hardware power.  One of the most popular aspects of this interactive power is a well known product called Xbox Live [teamxbox.com, 2009].

Once the new console was in full motion, Microsoft made haste in contacting manufacturers to secure parts for the console.  Once it became common knowledge that the next console was being made, 2003 led Microsoft to make partnerships with ATI Technologies and later IBM to make the core components of the console.  These collaborations resulted in ATI making a graphics processing unit, and IBM making a powerful tri-core processor unseen and unrivalled in the processor market at that time [Wikipedia.org, 2009].

This setup was unchanged until 2007, almost 2 years after the console’s release.  After this, better and more reliable processors were put into newer models of the Xbox 360.  The two original versions of the console were the “Core” and the “Premium” versions.  The more expensive version included a 20 gigabyte detachable hard drive, a wireless controller rather than a wired one, a wired headset, and a high-definition component AV cable.  The core version was discontinued and replaced by the “Arcade” version in 2007.  The only noticeable difference between the two was the wireless controller, and the inclusion of a HDMI port, which all versions then had.  In the very same year, a more ‘advanced’ version of the console, or so it was marketed as, was released as the “Elite” version.  It included a larger hard drive in the space of 120GB, a HDMI cable, and a black aesthetic, compared to the white of the other versions.  In August 2008, the premium version was changed to include a 60GB hard drive, and the latest range on processors, which made the consoles virtually failure-proof [Wikipedia.org, 2009].


A Whole New Challenge

When the Xbox 360 was released in 2005, it took the world by storm, as such an advanced console came out at that time.  Many would say it was a little ahead of its time, as the console’s technical problems were soon revealed.  Attracting the attention of the media, it was discovered that the Xbox 360 was an imperfect console – the consoles had a high rate of failure.  At first these discoveries were ignored and perhaps covered-up when Microsoft would say that it was only a small number of consoles these failures affected.  However, by 2006 it became common knowledge that a large part of the products were failing.  The most common problem was a general hardware failure, in particular the motherboard.  This was indicated on the front of the Xbox 360 by three red lights where the controller indicators are.  This became infamous and was called the “red ring of death” [Wikipedia.org, 2009].  These failure problems have cost Microsoft £2.3 billion and the failure rate was nearing 50%, which is more than a significant figure [guardian.co.uk, 2009].

It was later discovered that Microsoft were originally aware of these defects and were warned on several occasions by the engineers working on the console.  These people and signs were ignored and the console was still pushed out into the world [venturebeat.com, 2009].  Once it became common knowledge, Microsoft were severely criticised for pushing out a faulty product onto the market.  They tried various modifications to the new products being made including a second heat sink to keep the machine cool.

It wasn’t until 2007 when Microsoft openly admitted that the console had problems and gave the owners a temporary solution.  Microsoft offered a three year extended warranty from date of purchase where they would retake users’ machines and attempt to repair them and replace the parts to make them up to date, or in the worst case scenario give them a brand new console.  Microsoft said that the reason for this was because they were getting an unacceptable number of returned products [venturebeat.com, 2009].  In August 2008 when the new 60GB models were being sold, the product contained the ‘Jasper’ chip, which has so far been deemed virtually failure-proof, suggesting a solution to the Xbox 360’s severe failure problems.


Milestones – Sales

The Xbox 360 took the world by storm.  Released over a year earlier than the Playstation 3, this proved iconic in its success.  Originally it was predicted that when the Playstation 3 was released, it would soon overtake the 360 in sales – July 2008 to be precise [kotaku.com, 2007].  This was proven wrong as the Xbox 360 proved to be the preferred choice of console, as far as sales figures went.  The Xbox 360 became the first console to sell more than 10 million consoles in the United States.  However it was surpassed by the Nintendo Wii in September 2007.  As of January 6, 2009 the 360 has sold 28 million units [Wikipedia.org, 2009].  One of the redundant accessories – the HD-DVD player which has now been discontinued and completely abandoned has lowered in price due to the discontinuation.  However, this lowering of price proved popular as sales of it rose by over 1000% [kotaku.com, 2007].


Milestones – Games

Since release more and more gamers have flocked to the Xbox 360.  The games industry recognised the console’s popularity, and a cumulatively increasing number of games were and are being developed for the platform.  This popularity becomes obvious when it can be said that the Xbox 360 was expecting to have over 1000 games by the end of 2008 [kotaku.com, 2008].  Another milestone would be that the number of 360 sales doubled soon after the release of Halo 3, one of the console’s defining titles, along with Gears of War.  Those titles sold 8.1 and 3 million units respectively [Wikipedia.org, 2009].


Industry Reactions

Xbox Live

Everyone reacts differently to situations.  However, there was a common reaction to the 360’s online gaming service Xbox Live.  Although it had proven itself with the original Xbox, the 360’s interactivity collaborated with the service perfectly.  The service had become unparalleled within the gaming industry and was unmatched by anything, including PC gaming.  The service included gaming, voice chat, video communication, a shopping service (Marketplace) from an early stage.  It was executed brilliantly and that is why the 12 million Xbox Live subscribers make the service go unmatched [Wikipedia.org, 2009].


New Xbox Experience (NXE)

As of November 19, 2008 Microsoft introduced a new interface for the Xbox 360 in order to keep things fresh and try to show gamers that they are still committed to providing a service, despite the hardware problems the 360 had.  The new ‘dashboard’ was easier to use and things were more clearly laid out.  It also allowed users to install games to the hard drive, utilising the large 120GB space of the Xbox 360 Elite.  Reactions to the update were generally positive since navigating the system became easier compared to the ‘blades’ interface [Wikipedia.org, 2009].



Microsoft’s rival companies, namely Sony and Nintendo were seemingly unmoved by the release of the Xbox 360.  However, it would be obvious that they would have realised that they needed to ‘step their game up’ and work harder on releasing their seventh generation consoles.  Almost two years later, the two competitors released their consoles, the Sony Playstation 3 and the Nintendo Wii.  Both companies released games for each console, but it was clear that they could not match the massive back catalogue of the 360.  Nintendo decided to go in a different direction with the Wii, and targeted casual gamers, for which turned out to be like striking gold for them.  Wii sales surpassed 360 sales and is the highest selling console to date [guardian.co.uk, 2008].



Despite the Wii’s massive sales, they targeted a different audience.  Many more people were beginning to discover what games and interactivity could do, but on a very light level.  Existing gamers would be named the ‘hardcore’ crowd and their allegiance remained with the 360.  The large number of Xbox Live subscribers showed how faithful gamers were to the product and its large line up of games.  At first they complained about the hardware faults of the 360, but once Microsoft announced the extended warranty those complaints were silenced [venturebeat.com, 2008].


Developers and Publishers

Impressed by the 360’s power and capability with high-definition gaming, companies flocked to make games for the console.  It is the very reason why there are over 1000 titles for the platform today.  Microsoft were able to use this interest to get companies to make games exclusively for the Xbox 360.  Examples of this include Square Enix titles such as Infinite Undiscovery and Lost Odyssey.  Some companies were also realising the massive potential for sales with the 360’s audience and were turning exclusives for other platforms into multi-platform games.  Examples of this include Final Fantasy XIII which many PS3 owners had negative opinions about [kotaku.com, 2008] and Resident Evil 5 which even Microsoft employees did not know were coming on their platform [kotaku.com, 2008].


The Future

The Immediate Future

It is inevitable that more games will be released for the platform, with more and more gamers being attracted by the console and number and variety of titles.  It has been revealed that even more exclusives are on the way for the platform [Slashdot.org, 2008].  Further collaborations are inevitable such as furthering the development of services like Netflix through the NXE [softpedia.net, 2008].  There is no doubt that there will be more content available on the new interface, and Microsoft’s move towards increasing digital distribution through direct downloads and downloadable content [ign.com, 2008].  In the same source Microsoft’s Shane Kim also says that the 360 is gearing towards a broader audience including casual gamers, but will in no way abandon the hardcore like Wii has seemed to have done.  With the Wii out of the picture, Microsoft has outdone it’s rival Sony.  It may also be likely that Microsoft will follow the economic trend and make job cuts within their company.


The Longer Term

Although information about the immediate future is existence, as companies announce their upcoming products and services, the long term future is uncertain – it is more a matter of opinion and the companies securing more from their partnerships and collaborations.  Some would predict that with the downfall of HD-DVD Microsoft may be looking to integrate Blu Ray.  However, those rumours have been denied by Microsoft [kotaku.com, 2008].

Many things that Microsoft may have planned for the 360 are unknown to the public because companies like to have ‘aces up their sleeves’ and keep their audience and the industry ( including their competitors) guessing.  This is seen at their plans for their 2009 CES keynote [kotaku.com, 2009].

One thing that is certain is that Microsoft will continue to compete with Sony for dominance of the hardcore market.  There will most certainly be a third Xbox console in the eighth generation of consoles.  However, Sony has said that they plan to give the PS3 a ten year lifespan [gameindustry.biz, 2006] which is increasingly unlikely.  With technology moving so quickly it is inevitable that there will be an eighth generation of consoles within the next few years.  Until then, I predict that more companies will flock to the 360, if not make games for both the 360 and the PS3.  With more exclusives, especially with those of the popular Halo franchise the user base of the Xbox 360 will continue to grow.  This will result in a large core base for when the next Xbox is released.  For now, it is clear that the Xbox 360 has been a successful machine, despite its flaws, and will continue to prosper in the future.





History of the Company and Platform

July 9, 2001

July 10, 2008

May 12, 2005

January 6, 2009

December 13, 2005
Book:  Opening The Xbox, Dean Takahashi, Prima Publishing, 2002


Development of the Platform

May 12, 2005

January 7, 2009


September 5, 2008

November 12, 2008

August 17, 2007

August 2, 2007

March 13, 2008


Industry Reactions

September 5, 2008

January 7, 2009

November 12, 2008

July 14, 2008

July 23, 2007


The Future

January 7, 2008

February 8, 2008

March 14, 2008

January 2, 2009

August 30, 2006

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