The box looked like an old VCR, the controller was comically large, and it was made by one of the most boring companies on earth. Somehow, the Xbox triumphed and gave Microsoft Corp. the first—and last—successful video game console brand from an American company since Atari.
Twenty years later, Bloomberg asked two dozen people instrumental in creating the Xbox to recount how they did it. Microsoft broke into an industry dominated by Japanese companies and reshaped the business around shooting games and online play. Efforts by Amazon.com Inc., Apple Inc., Facebook Inc. and Google to crack the industry in the years since have come nowhere close. Video games now account for more than $11 billion a year for Microsoft and have established the Xbox as a premier brand.
The team also looked to tap Microsoft’s deep financial resources to secure exclusive games. It approached various companies to propose an acquisition.
BOB MCBREEN (head of business development) The first company we reached out to buy was EA. They said, “No, thanks,” and then Nintendo.
BACHUS Steve made us go meet with Nintendo to see if they would consider being acquired. They just laughed their asses off. Like, imagine an hour of somebody just laughing at you. That was kind of how that meeting went.