9 Features

Timeline: The complicated birth of Xbox

By Rob Crossley on Monday 20th May 2013 at 9:30 AM UTC

As the world prepares to get a first glimpse of the Next Xbox, CVG will run a special four-part article series that examines the defining moments in Xbox's history and looks at its future. The editorial line-up follows:

Monday (am):
Timeline: The complicated birth of Xbox
Monday (pm):
Next Xbox: Everything we know so far
Tuesday (am):
The Xbox revolution will be televised
Tuesday (pm):
Timeline: The tectonic shift to Xbox 360

Then, on Tuesday 6pm UK time (10am Pacific), CVG will host an Xbox Event live stream and official live video stream of the event.

Timeline: The complicated birth of Xbox

The Xbox was the first major games console developed by an American company since Atari. Its creation at Microsoft was complicated and controversial, with many company executives hoping the project would be scrapped. Yet it achieved more than many expected, and built the essential foundations for a successor that gained huge ground on Sony.

In the timeline below, CVG charts key points in the creation, development and release of the system.

March 1999: Kutaragi, again

In a moment reminiscent of when Nintendo embarrassed Ken Kutaragi in 1991 (a public betrayal that triggered the Sony revolution), eight years later it was the buoyant PlayStation boss's turn to provoke a rival company into action.


In March 1999, Sony summoned the world's media to a lavish PlayStation Meeting at the Tokyo International Forum. It was here where Kutaragi announced the next world-conquering home console, PlayStation 2. This was a moment that galvanised the industry, but also the day that the pugnacious Kutaragi finally caught Microsoft's attention.

"Sony started saying things in the press about how they were, essentially, going to destroy PC gaming," said Kevin Bachus, one of the four founding Xbox team members, in an interview years later.

"Their mantra was something like, 'entertainment content requires an entertainment device,'" he told VG24/7.

Microsoft's fear was that Sony's dominance in home consoles could spread to the PC games market. At the time, Kutaragi had made grandiose claims such as he was developing "the world's fastest graphics rendering processor".

This led to some executives within Microsoft to consider an idea that would change the face of the industry: The Windows corporation began to consider building a games console of its own.

1999: Bill and the Xbox quartet

The four people thought to be the original founders of the DirectX project were Ted Hase, Kevin Bachus, Seamus Blackley and Otto Berkes. The discussion about Microsoft's "DirectX console" began when Hase, a DirectX technician, sent a Powerpoint presentation out to the other three.

During this time, Microsoft co-founder Bill Gates was on a 'think week' - a routine where the billionaire entrepreneur would be given a pile of documents from executives across the company, pitching various ideas and topics. One such paper he summoned was an analysis piece on whether the PlayStation was, as Kutaragi had suggested, a commercial risk to PC games.

On May 5, at Microsoft's Redmond campus, Gates chaired a meeting with the Microsoft entertainment division to further discuss the possibilities of developing a rival games console.

But internally there was deep-rooted resistance to Microsoft moving out of its PC and enterprise comfort zones. Gates, however, believed there remained a clear opportunity to expand into the games space, which PlayStation had proven was a growth industry.

May-June 1999: The other Xbox

It's not unusual for a sprawling multi-billion-dollar software conglomerate to be investing in numerous R&D projects across the business. More often than not, these incubation projects will remain a secret on a need-to-know basis.

In May '99, Hase, Bachus, Blackley and Berkes discovered that another group at Microsoft was working on a games console. It had a different design philosophy to the DirectX box, opting instead to be a multimedia device that carried Microsoft's WebTV service.

Bachus explained to VG24/7: "They were like, 'hold on, we've always secretly planned to build a console ourselves. We've never bothered to tell anybody this, but this was always the plan. That was always the idea. We just kept it a secret from everybody'."

Suddenly there were two teams competing for Bill Gates's signature. What followed was a short rivalry between the two separate teams pitching different approaches to making a Microsoft games console.

According to an interview with games executive Ed Fries, who would later join the Xbox business, what sealed the deal for the DirectX box was the promise that it would bring Windows into the living-room.

"The other [WebTV] group had been working with Sega on the Dreamcast - they had their own proposal for a console that was very much like a PlayStation, y'know, a very straightforward game console," he told Develop some years later.

"Our idea was like a boxed PC at that point. It had an Intel chip. It ran Windows. It had a hard-drive. It was basically a PC running Windows. To imagine what the early prototype was like, think of a PC with a hidden OS, and putting a PC game in there and it going in auto-install and auto-run. So, a little bit like a console."

A final decision was made at a meeting in June 1999 which involved the company's most senior executives, including Gates and Steve Ballmer. During the meeting, Blackley booted the DirectX console and, in under nine seconds, had loaded interactive scenes in Tomb Raider.

J Allard during the Direct X project...

"We said, if we had permission to build this special version of Windows, this is what we would do'," said Bachus.

"We worked with AMD to create a custom BIOS to make a PC that could start up immediately. We said, look, it can do this."

It was this feature that informed one of the DirectX box's central qualities going forwards. Because the Windows operating system required a hard drive, it meant the console would be the first to use on-board storage as standard. Years down the line, the hard drive would go on to become as vital to games industry as GPUs and processors.

Gates's decision was made; the DirectX box project would take priority over WebTV. But this by no means meant that Microsoft had green-lit a console project (there had been much internal resistance to the idea). What had encouraged Gates, however, was the concept of a console delivering Windows into living rooms.

It just so happened that, months later, the DirectX box team had to confess to Gates that Windows needed to be cut from the project.

  1 2 3 4