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The Xbox Story, Part 3: Facing the Public

With the Xbox project finally greenlit, the Microsoft team prepared to show it to the world. Patrick Garratt tells the story of the GDC and CES Bill Gates reveals and why you were nearly playing the "Microsoft 11X".

Hit this for the previous installment, “The Xbox Story, Part 2: Gunning for Greenlight”.

With Gates and Ballmer now fully on-side and Xbox greenlit, the team prepared to go public. Microsoft announced Xbox at GDC 2000, and Kevin Bachus, Seamus Blackley and the rest of the group knew that, for the console to be taken seriously, it was essential that Bill Gates was seen as personally backing the initiative.

The public also told the team that the technology presented must be clearly ahead of the competition: namely PlayStation 2.

“We did a lot of focus testing," said Bachus. "I wanted to prove the point that I’d been saying to these executives, that it was all about the games. We brought in people in a bunch of different cities around the US.

“The first thing they said was that Bill Gates would make sure that there are games for this thing. Bill’s the richest man in the world. He’ll make sure there are games. That was number one. Games availability was super-important.

“Number two: Microsoft has its fingers in all these technology pies. There’ll be some sort of advanced technology feature that will be better than the competition.

"That’s a big part of the reason we launched in 2001 instead of 2000. Bill Gates came back to us and personally said, ‘The way I see these specs, if there was such as thing as a benchmark for consoles, we’d probably beat PlayStation 2, but not by enough that consumers would actually notice. If you’re entering the marketplace, you have to have a significantly differentiated product. You need to wait for a year for PC technology to pass PlayStation 2 with such significant force that Xbox can truly be marketed as a superior technology product.’ That was reinforced by what people told us in the focus group.

“The third thing they said is that it would probably have some strong network component, as Microsoft is so dominant with Internet Explorer. This is important, because at this point nobody played multiplayer games on console, and, in fact, very few people played them on PCs. But they thought, ‘At some point I may want to do that, and I want my console to be ready.’ That was why we started work on Xbox Live.”

It wasn’t only the man on the street pushing for Gates’ head to be put on the block over Xbox: EA’s Larry Probst had demanded it as well.

"Larry Probst said: ‘I want to know who gets fired if Xbox fails. I want to know, Robbie, that if Xbox fails, you’re fired. And we want to see Bill Gates on stage at GDC. We want to know that this has support all the way up to the top. We want his name associated with it so we know how committed you are.’"

“You’d think that Microsoft, the most valuable company in the world at the time, going out to games developers and saying we were going to do it would make everyone fall in line, but it was exactly the opposite," said Bachus.

"When we went to meet with Electronic Arts, they said, ‘We’re very skeptical about this initiative, because you have a tendency to put your toe in the water and then abandon your partners when things don’t go your way. We know that if Nintendo fails, they’re done. They have no other products. But if you guys fail you lose a billion dollars; it’s a rounding error on your balance sheet and no one even notices.’

“For example, at the time, Robbie Bach wasn’t only in charge of Xbox, but also of all Microsoft’s printing software and retail initiatives. Larry Probst said: ‘I want to know who gets fired if Xbox fails. I want to know, Robbie, that if Xbox fails, you’re fired. And we want to see Bill Gates on stage at GDC. We want to know that this has support all the way up to the top. We want his name associated with it so we know how committed you are.’

“We lobbied aggressively for Bill to be the guy that went out on stage and did it," said Bachus. "We knew that it would get promotion, but we also knew what it would say to the rest of the world. We hadn’t seen the head of Sony come to GDC. It was very, very important to show how serious the whole company was about Xbox.”

That's not PC

Gates agreed. It was his personal appearance at GDC and support for the console that would allay initial fears of another Jaguar or 32X - a machine with no software. That Gates would come out on stage and confirm Microsoft was to launch a super-powered, American-built videogames console was a fantasy to the western games trade. A dream. At GDC 2000 it became a reality.

Gates wasn’t the only star of the show, though. The prototype console revealed at GDC that year certainly grabbed attention. As you’ll no doubt recall if you’re old enough, it was a giant silver “X”. There was method in the madness.

Watch on YouTube

Bill Gates, Ed Fries and Robbie Bach talking at
GDC 2000 in the wake of Xbox's tech reveal.
This is edited from a CMP sizzle roll.

“I’d gone to Seamus and said, ‘You’ve got to help me make something that doesn’t look like a PC,’” said Bachus.

“We knew there was a lot of skepticism out there about Microsoft getting into the games business. Everyone thought it was just going to be PC games."

Microsoft’s intention with the prototype was to show something that looked like a games console, but in such an incredibly over-the-top way that no one could mistake it for a PC. Sony’s PS2 unveil had been fuelled by different motives: the company had shown a custom housing for the console’s motherboard and hooked it up to a screen, the intention of which was to partly show that PlayStation could take on and beat the PC gaming leaders.

Xbox was about to become official, but there were still serious struggles with PC games advocates within Microsoft itself. The GDC hardware had to be so outrageous that no one would ever believe it was the final design.

“That’s why we built that huge chrome 'X'," said Bachus. "Frankly, I would have loved it [as the design], but it was enormous. There was no way it could fit under someone’s entertainment system. It was just a prototype, super-early stuff, but it looked nothing like a PC.

"That was very important. Even the night Xbox went on sale, I still believe there were people that thought they were going to see a Start menu when they fired the thing up.”

Blur Studios created the martial arts demo
involving the tattooed woman and the
robot. It was designed to show what
Xbox was capable of in terms of animation.
Click for a bigger version.


On March 20, 2000, Bill Gates walked out onto the GDC stage in San Jose and, once again, made history. I was in the crowd, sitting next to Criterion's Alex Ward, and the atmosphere was like no other I have experienced at a games event. Seeing Gates on stage, the all-American tech hero, to talk about videogames to videogame developers and announce a Microsoft console, was stunning.

"I knew there was a change. I knew something big was happening," said Ward, who had just joined Criterion from Acclaim.

"I knew that there was this movement happening, and that it was coming from America. It had all been in Japan, and you'd had to read about it from afar. Like, 'Hey, Sony held an event,' and you'd have to read about it in MCV.' I was pretty shocked by it."

You have to put this in context. Console videogaming was all about Playstation and Nintendo. Only Gates was big enough to convince the gaming world there could be a third player, and one that wasn't Japanese.

“We had to say, ‘Listen, everything Sony’s been saying about PC being sub-standard and PC tech being overrun by their alien space technology in the Emotion Engine isn’t true,'" said Bachus.

Xbox's first tech demos: the desk; the
Japanese garden; and the ping pong balls.
Click for a bigger version.

"'PC technology has continued to advance and develop, and let us show you some of this stuff that we’re going to be capable of doing with this Xbox.'"

In one of gaming history’s few, genuine, “Were you there?” moments, Gates announced Xbox and marked the occasion by putting on a leather jacket, resplendent with a stitched green “X”. He received a standing ovation.

It was cool Gates. Microsoft was no longer just spreadsheets. Anyone in that crowd, which was built primarily of US developers, will tell you the same thing: the atmosphere verged on hysteria. Gates was here to save games.

“It was entirely by design,” said Bachus. “Seamus and I and a few others on the team had come from the games industry and we were basically talking to ourselves. To a large extent, and this is absolutely indisputable, we tried with Xbox to create the console that we wanted to develop for. We were ultimately validated that other people felt the same way. We knew that if we captured the hearts and minds of developers then the battle was won. We wanted to build demos that we, ourselves, wanted to see.”

The demos consisted of a camera flying around a desk, the intention of which was to show the level of detail possible with the machine; a Japanese garden, complete with fish in a pond and butterflies that flew together to spell "Xbox"; a room full of mousetraps covered in ping pong balls, which Blackley set off in a chain reaction to show how easily the console could deal with real-time physics; and a dancing duo of a futuristic woman and partner robot, put together by Blur Studios, designed to show Xbox's achievable level of animation.

"We’ve found the name. This is the name. It tests great. We’ve tested it against Xbox and we think it’s fantastic. OK. Here it is: it’s the Microsoft 11X. It’s not 10. It goes to 11. And 'X' is mystery. And it tests great. Everyone loves it."

Gates confirmed that Intel would supply the CPU, and Nvidia the GPU. As reported in Opening the Xbox, the console was to have 65Mb of DRAM, compared to PS2's 40Mb, and would run a theoretical maximum of 150 million polygons per second, compared to PS2's 66 million.

The news that Intel was to supply the central processor was a shock to the AMD reps in the crowd: they hadn't been told by their management that their bid to supply the box had been unsuccessful.

An animation demo for Midway’s Ready 2 Rumble was then shown, featuring lead character Afro Thunder. While the game never appeared on Xbox in any form, it showed Microsoft was in the frame for existing, high profile console content. The truth, though, is that the movie itself was nearly canned.

“We could never get Bill to talk about fighting games like Mortal Kombat,” said Bachus. “He always referred to them as boxing games. It was hilarious. The night before the keynote we were showing him the demos on the big screen, and we’d been told that we couldn’t show that video. His PR people said, ‘There’s no way you can do this,’ because the game used this character called Afro Thunder, and they thought it was demeaning to black people.

“Microsoft had just had this weird thing where somebody had gone into some photo database in Office, and there was a black family at a playground sitting in front of a swing set, a jungle gym and a slide. If you put in ‘jungle’ it came up with a picture of black people, where the word actually referred to the piece of equipment in the background. People were like, ‘Microsoft is racist.’ They’d just settled that, and Bill’s PR people were panicked about this video. They said we couldn’t have it.

“So, we’re showing the demo, and I, being young and stupid, said to Bill, ‘There’s one more video that we’re thinking about doing, but your people are kind of concerned about it.’ He asked to see it. I showed him the video and he goes, ‘I think that’s great. That’s an actual character that’s really entertaining. I don’t have a problem with that.’

Gates' PR people shot Bachus daggers, fearing headlines along the lines of, "Bill Gates ridicules black people" the following day.

Bachus responded: "You don't think maybe the headlines will read, 'Microsoft announces games console'? You don't think that's maybe slightly bigger news?"

Watch on YouTube

The original Afro Thunder tech demo from
GDC 2000. This came close to never being
shown as Gates' people were worried it
might be construed as racist. Ready 2 Rumble
never released on an Xbox console.

Hedging the bet

In fact, most of Gates' GDC presentation was about PC games. The Xbox tech demos only took up the very end of the keynote.

“Part of that was hedging the bet,” said Bachus. “There was a lot of resentment inside of the company about whether or not this was going to destroy the PC stuff. Bill had never been to GDC before, and had never talked about PC gaming; he’d never really gotten behind it.

"The bargain we had to make was, ‘OK, we’re going to introduce the fact that we’re getting into the console business. We’re going talk a little bit about Xbox. But first we’re going to give tremendous love to the PC gaming space because we don’t want people to think that we’re abandoning it.’

"That was very important. We had to first reinforce our commitment to the PC gaming space, really underscore the fact that we were very bullish on it and we believed it had a strong future, and introduce the concept that we felt PC games and console games were distinct and not competitive.

“Plus, candidly, I kind of think some thought that, ‘Well, if we decide we’re not going into the console business on February 14, at least there’s going to be something for Bill to talk about.'”

The wariness was there for all to see. In the announcement press release issued on the day of the presentation, Don Coyner, director of marketing in the newly-formed Microsoft games division, attempted to assuage PC gaming’s fears in plain language.

"The PC and Xbox are complementary devices. Each has very distinct audiences," he said.

"PC games are more cerebral, while console games are more visceral. If you look at the top ten games lists for these two platforms, you'll see that they don't really match up."

The giant silver 'X' console used in the
original reveal demos. Blackley was
charged with creating something that
looked nothing like a PC, but was so
over-the-top no one would ever believe
it was the final design.

With the cat completely out of the bag, Bachus and the rest of the project were thrown under the glaring eye of both the trade and the world’s press, and many were incredulous. Bachus was confronted by developers at GDC after the reveal wanting to know when he’d sold his company and the Xbox concept to Microsoft: they couldn’t believe it was a homegrown initiative.

Despite Microsoft's bluster, the skepticism was thick.

"I was apprehensive, not very sure what was going on," said Ward. "I was very openly skeptical."

He added: "I remember that leather jacket thing. It was terrible. I remember meeting Microsoft staff afterwards and making fun of that, and they were like, 'When we launch this, we're not going to have Bill Gates wearing a leather jacket.'"

The disbelief isn't so hard to understand: Bachus and the others had achieved the unthinkable. They'd convinced Microsoft to throw itself cold into a console business dominated by Sony and Nintendo, and they'd got the public backing of Bill Gates.

In reality, what had happened was confusing on several levels. Firstly, Bill Gates had appeared in a leather jacket. I can't stress how amazing and wholly weird that was at the time. Secondly, the case on show certainly didn't look like a PC, but many in the crowd were baffled as to whether or not it was the final box. There was no doubt it was ridiculous, but the whole thing was so surreal that anything was possible.

While the GDC presentation was awesome for so many reasons, it raised many more questions than it answered.

It doesn't matter what you think, Bill

Xbox's next public appearance, at CES 2001 in Las Vegas, went a long way to solving the public riddles surrounding the project. Gates, again, led the stageshow, which included the first ever look at the console itself and its initial, giant controller. Unfortunately, the first images of the machine were leaked from a magazine and posted online a few days before, but the crowd clapped nonetheless.

Microsoft said that Xbox's Nvidia GPU would deliver "more than three times the graphics performance of other consoles, and that the Intel 733MHz processor was to be "the most powerful CPU of any console".

PS2's CPU, by contrast, clocked in at just under 300Mhz. It wasn't confirmed at the time, but the Xbox GPU was intentioned to run at 300Mhz: the final chip ran at 233Mhz, again, much faster than PS2's "Graphics Synthesizer" at just under 150MHz.

And this time, the presentation showed some actual games. Blackley demoed Lanning's Munch’s Oddysee and Jez San's Malice, with Microsoft boasting on stage and in the accompanying press release that the adventure utilised "the same rendering techniques that were used in the Toy Story movies."

The final design with the original "fat"
controller, which was replaced globally
with Controller S after launch. Gates
personally showed the finished box for
the first time at CES 2001.

Blackley ran around the game world as a small girl with a large hammer, smashing cockroaches. He called her "badass". The visuals really were amazing for their time: self-shadowing and bump-mapped walls were on display. No one had ever seen a console do anything like it.

I was in the CES presentation with Ward, and, again, Gates was faced with a tough crowd.

"I though Abe looked pretty good," said Ward. "I wasn't convinced by Malice. I'd seen it before as a PS2 game at Fox Interactive. I wasn't convinced by that, although the screenshots looked good. I was very skeptical. It was only when I actually got the machine from America that I became a big believer."

The Las Vegas reveal was a far glitzier affair than the GDC presentation. Wrestling star The Rock joined Gates on stage, and the two engaged in a comedy routine. He told Gates that, "It doesn't matter what you think, Bill," which raised a genuine laugh. A THQ-published WWE game was confirmed for the machine. Activision also became involved at this point, saying it would release a Tony Hawk title for Xbox.

What's in a name?

The CES hardware reveal took place in January, 2001, and the name "Xbox" was now a permanent fixture for the November launch. Finalising the console's public identity, though, had not been an easy process.

“At first we called it the Windows Entertainment Platform, or WEP, and then we came up with a codename for it,” said Bachus. “We called it Project Midway. That was because, candidly, the Battle of Midway was the turning point in the battle with the Japanese [in World War II], where, through deception, we were able to fool the Japanese into thinking something was actually another. But we had to have a cover story for it, so we said it was ‘midway’ between a PC and a console.

Jez San's Malice. The game had been
originally intended for PS2. Blackley
showed it as part of the CES 2001 demo.

“But we started referring to the hardware internally as the DirectX team’s box, or the DirectX box. It just got shortened to Xbox, although we could never figure out if it was X-Box, or whether or not it had a capital ‘b’ or a lower case ‘b’. But that was always the codename, and we figured marketing people would come in and come up with something snazzy for it later.

“We had this very expensive naming company that comes up with all kinds of names. They asked us things like, ‘If Xbox was a car, what type of car would it be?’ J Allard came up with the predictable, ‘It’d be a Ferrari.’

“They came back with a bunch of names that I thought were ridiculous. Most of them sounded like car names, like the Atlanta, the Altera; things that sounds good from a sonic standpoint. And they were like, ‘No, we don’t like those names either. We were just gauging your reaction to them. I was like, 'Right.'

“Ultimately they came back and said, ‘We’ve found the name. This is the name. It tests great. We’ve tested it against Xbox and we think it’s fantastic. OK. Here it is: it’s the Microsoft 11X. It’s not 10. It goes to 11. And “X” is mystery. And it tests great. Everyone loves it.’

“And I turned to our marketing guy and he turned to me, and we said, ‘Well, I guess we’d better go buy’”

Bachus conceded that Xbox ended up as the machine’s name “mostly because we couldn’t think of anything better. It was just as simple as that.”

", I believe, was owned by a German pornography site."

When the team decided to ultimately call the console Xbox, it then faced the challenge of ousting previous owners.

", I believe, was owned by a German pornography site," said Bachus.

"The hardest one, though, was a really tiny company, a public company on NASDAQ, called Xbox Technologies: I can’t even remember what they did. But their ticker symbol on NASDAQ was XBOX. Fortunately for us, they were actually in the process of going bankrupt, so we basically offered them, I don’t know, $100,000 just to give us the name, and they were thrilled just to get something as they were going bust.”

The final hardware was public. The final name was in place. Bill Gates had personally endorsed the machine. They were ready to launch. There were just a few things left to confirm before going live: we still knew nothing of Xbox's games.

Tomorrow: Part 4 – The Games, the Launch, the Aftermath

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