Xbox has become a household name in console gaming, standing tall next to the likes of PlayStation and Nintendo. The early years of the Xbox console (and the launch of one heavy-hitting exclusive) solidified the company as a potential gaming giant, and over the years, have gradually established their dominance in the market. But where did it all begin, and how did we get here now? In celebration of the 20 year anniversary of Xbox, let’s take a trip down memory lane…
An Early Rivalry
The late 90s of console gaming were primarily dominated by the original PlayStation and Nintendo 64. In the background, renowned software developer Microsoft were aiming to break into the console market as well. Microsoft had great success with the API DirectX, which enabled them to launch successful PC titles like Microsoft Flight Simulator and Age of Empires. However, then Microsoft CEO Bill Gates envisioned a gaming console that could tap into all aspects of home entertainment without necessarily replacing the PC – something that Sony hoped to achieve with the launch of the PlayStation 2. Gates knew well that entering the gaming market would put them in a direct rivalry with the PlayStation 2, but they pushed forward.
Enter the father of the Xbox, Seamus Blackley. Together with a team familiar with DirectX, Blackley began discussions about creating a console that would harness Microsoft’s DirectX technology. The console, codenamed “Midway”, saw the joint efforts of Blackley’s team and the engineering team behind WebTV – the acquisition being a result of some disputes between the teams about the architecture of the console. This hardware would eventually evolve into the DirectX Box, and finally, the Xbox touted as being more powerful than the PS2. However, Microsoft knew they needed a game to showcase this power…
Around this time, a team named Bungie were developing an RTS for the Apple Macintosh platform. They found some success releasing games on Apple’s hardware, but in 2000, Microsoft would roll around and acquire Bungie – leading to this strange sci-fi RTS game being repurposed into a first-person shooter called Covenant. The decision to make it a first-person shooter was not easy, as they had some concerns about the Xbox’s controller. However, the controller was designed to emulate the experience of a PC mouse and keyboard (where most first-person shooters thrived on), which convinced Bungie enough to turn Covenant – now Halo – into the FPS game we know today.
Bungie was tasked with creating a game that would be a day-one launch title on the Xbox, and be one of its greatest selling points – so no pressure. Luckily, it worked in their favour. Halo: Combat Evolved, among many other launch titles for the Xbox, released with the console in 2001. To say that Halo: Combat Evolved was instrumental in Xbox’s success would be a massive understatement. Many fans still refer to the Xbox brand as “the house that Halo built”, and it’s not hard to see why. Critics praised Halo: Combat Evolved at the time – the title still stands as one of the highest-rated games of all time on Metacritic. Halo became Microsoft’s “killer app”, and had basically led them to establish a strong foothold in the gaming world.
Of course, Microsoft still had to worry about entering a market where Sony’s PlayStation 2 was already making waves as it had a two-year head start on the Xbox. While it never quite achieved the PS2’s monumental success (no console ever did to this day), Xbox made a very strong first impression in the gaming market. It was sold as being more powerful than the PS2, and had the added benefit of exclusives that would come to define Xbox as a brand.
In its short life cycle, the Xbox saw the release of Halo 2, which was at the time the highest-selling single piece of entertainment in history. Lionhead Studios’ Fable also managed to cause a stir, but thankfully, for mostly the right reasons (mostly). The hugely successful Forza Motorsport released around this time, along with Ninja Gaiden – yes, that was an Xbox exclusive for a time. Thanks to a diverse line-up of titles, Xbox managed to sneak its way into living rooms and achieve solid overall sales of 24 million units worldwide – but still only one-fifth of the PS2’s lifetime sales. That was just the beginning for Microsoft.
360 Strikes Back
Getting a clever jump start on the next console generation, Microsoft released the follow-up to the Xbox, the Xbox 360, in late 2005 – a full year ahead of the PS3. This helped them kick off the new era by prioritizing the Xbox 360 as the first taste of the future – it worked. The Xbox 360 was almost universally sold out at launch, helped by a stellar first year line-up of games, many of which included Call of Duty 2, Saint’s Row, The Elder Scrolls IV: Oblivion, and Dead or Alive 4. Microsoft also heavily leaned into producing high-quality AAA exclusives for the 360, establishing well-known franchises like Gears of War, Forza, Fable and Halo that would come to define their gaming division.
Naturally, Xbox 360 had the added benefit of having a system-seller like Halo 3 under their belt, which would release in 2007 to equally as impressive success as Halo 2. Gears of War also became a heavy-hitting household name during this period, spawning four games in the franchise over the console’s lifespan. For a large majority of this generation, PS3 was playing catch-up to the 360’s massive sales. Even though Sony’s console barely inched out the 360’s overall sales by the end of the generation, it still cemented Microsoft as a juggernaut competitor in the gaming market. Things were only looking up for them…
Then the Fire Nation attacked. Well, figuratively, as 2013 saw the launch of the Xbox One, ushering in Xbox’s third generation in the console market. Unfortunately, the reveal of the Xbox One was met with… unkind responses from the gaming community. Initially, the console boasted a number of strange features, some of which included always having the console online, locking out support for physical game trading, and a focus on television that didn’t exactly speak to gamers, their core market. PlayStation used this as an opportunity to take jabs at the Xbox One – a move that would drastically tilt the generation in favour of the PS4.
The Xbox One, while still delivering a number of exclusives, failed to really recapture the quality of the 360’s golden days. Each new exclusive was met with frequently mixed receptions from fans and critics, while the PS4 historically pulled ahead with its own acclaimed exclusives. The Xbox One struggled to find its footing again for several years, even failing to dent their core audience with the middling reception of Halo 5: Guardians, their biggest IP. It was clear that Xbox desperately needed a change in direction, and luckily, that would come with the rise of one Phil Spencer.
Advent of Game Pass
Spencer started working at Microsoft in 1988, but would shift his attention to the Xbox gaming division in 2008. Eventually, Spencer would be promoted to the Senior Leadership Team on Xbox, becoming the brand’s Executive Vice President of Gaming. Spencer made several calls in his new position that would more or less start bringing the Xbox back on track – with the most crucial call of all being the introduction of Xbox Game Pass.
Xbox Game Pass was a subscription service that, for a monthly fee, gave Xbox users access to a number of first and third-party games. Some could argue that Xbox were simply ahead of their time, setting their vision on a Netflix-styled platform that bundled an extraordinary amount of games in one quite affordable service. Over the years, Game Pass had grown to accommodate many, many more titles, and even leapt over to PC, broadening the Xbox brand’s popularity across new platforms. This was a very big move for Xbox in winning back consumer trust, and until today, still continues to be great value for money. Spencer’s decisions would lead Xbox to make a few more waves in the gaming industry, each crashing on shores with greater force than the last.
X Marks The Spot
The Xbox One would see upgraded models in the Xbox One S and Xbox One X, but without a compelling reason to really invest in their consoles, Spencer moved to bolstering Xbox’s gaming division. On the eve of the next generation, he’d begin a journey of acquisitions that would further strengthen Xbox’s first-party studios – some of these studios including Playground Games, Ninja Theory, Compulsion Games, and most impressively, Obsidian Entertainment, who were one of the leading Western RPG developers in the industry.
Xbox would unveil the Xbox Series S and Xbox Series X, making a push for the next generation with a rejuvenated focus on gaming. Their biggest chess move was yet to come, though, as they announced in 2020 that they would be acquiring ZeniMax and Bethesda for $7.5 billion – along with every developer under Bethesda’s umbrella. This put them in possession of IPs like The Elder Scrolls, Fallout, DOOM, Dishonored, The Evil Within, and more.
As of writing, the Xbox Series X/S has announced several new games currently in development from their fresh first-party studios. Among these include Senua’s Saga: Hellblade II, Halo Infinite, the next Forza Motorsport, the Fable reboot, Obsidian’s Avowed, and more. In the span of 20 years, Xbox has managed to meet its competitors eye-to-eye, learn important lessons, and revive their brand in hopefully promising ways down the line.
This post was created in partnership with Nexus