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TVTranscript
00:01This is the story of a group of friends.
00:03I took it to my friend Kevin at like 2 a.m.
00:06I called him up at home.
00:07He said, you know, we've got to make a game console.
00:11Of course, Shamus walks in with this whole plant.
00:14Boom, here's the Xbox plant.
00:15So I was like, great.
00:17Boy, I remember thinking, what have we gotten ourselves into?
00:21Who took on the leader in a billion-dollar industry.
00:24So we're sitting in a room with Bill Gates and Steve Ballmer,
00:26and Steve Ballmer is saying,
00:27you're going to go,
00:28wow, we better get this right,
00:30otherwise it could potentially really screw up the industry.
00:36Xbox was the sexiest thing any Microsoft employee
00:39had ever heard of, ever, of the company.
00:41They all wanted to work on it.
00:42This is it. We're not looking back.
00:44I'm waiting for my Xbox.
00:47This is the remarkable story of the Xbox.
00:50Take it to the top!
01:12The Xbox begins with the driving force behind it,
01:16Shamus Blackley.
01:17Shamus grows up in New Mexico,
01:19and early on develops an interest in the world of gaming.
01:22I can remember very distinctly the feeling of playing my Atari 2600,
01:29and not really wanting to finish the games
01:33or to play them so much,
01:34but really wanting to take that excitement
01:37that I felt right in my own games.
01:38And when I got my Apple,
01:40my mom likes to tell a story,
01:41when they gave me the Apple II for Christmas,
01:43I stayed up for 72 hours straight.
01:45The moment they gave it to me,
01:46I was plugged into the TV.
01:47I actually fell asleep on it the first night,
01:51because I was so desperate to write a game.
01:53Despite his love for games,
01:54his career steers him into another direction.
01:57I was working as a physicist,
02:00and I was doing high-energy physics,
02:02and there was this giant particle accelerator
02:05that was going to be built in Texas
02:06called the Superconducting Super Collider
02:07in Waxahachie, Texas.
02:10And that was my future,
02:11and everybody else's future
02:12who was doing experimental energy physics in the U.S.
02:14at that time.
02:15That was what it was about for the most part.
02:17And it got canceled.
02:18It got canceled by Congress.
02:21With no job on the horizon,
02:23Seamus applies for a job posting on campus.
02:25It was Looking Glass Technologies.
02:27They needed somebody to rewrite a car physics model
02:29for a car and driver game they were working on.
02:32And so I went over there,
02:33and met all the guys working on Ultima Underworld,
02:36and met Lerner, an idol of mine.
02:39His flight simulator in days passed.
02:42And I started working on car physics,
02:44and that grew into the physics system
02:47and System Shock and AI stuff and Flight Unlimited
02:50and Underworld 2 and all that stuff.
02:53But new management flies into a completely different direction.
02:57So, you know, these game guys, you know,
02:59we're going to bring in a professional management team.
03:01And at the time I was saying,
03:02look, we need to do combat version of Flight Unlimited.
03:04I really want to do that.
03:06And the management decided that instead they wanted to compete
03:09with Microsoft Flight Simulator.
03:13So I started looking for a job,
03:14and I eventually got recruited to go work at DreamWorks.
03:17At DreamWorks, Seamus goes to work on a game
03:20based on the smash hit movie Jurassic Park by Steven Spielberg.
03:24The future looks bright for Seamus,
03:26but there are storm clouds on the horizon.
03:28So there I did a bunch of stuff
03:30culminating in working on Trespasser.
03:32Backhunter.
03:33Quite vicious.
03:34And quite intelligent.
03:36Screwed that up pretty well.
03:37And, you know, didn't do a lot of things
03:39that I know I would want to do today.
03:42I can do this.
03:43Trespasser is released in 1998, and its flaws are obvious.
03:47Critics and fans are disappointed,
03:49and Seamus loses faith in himself.
03:51Eight left.
03:52You know, after Trespasser, I got death threats.
03:54Heavier than I thought.
03:55There was a huge backlash.
03:56It was the very dawn of fan sites on the internet.
03:59It was the dawn of the sort of culture of first-person shooters,
04:03and everybody expected it to be a shooter.
04:04Seven.
04:05Six.
04:06First of all, they expected it to be finished, which it wasn't.
04:08But they expected it to be a shooter, and it wasn't.
04:10It was really different.
04:12So, people were really pissed off.
04:14I mean, people really hated that game.
04:16I mean, there were some people who really loved it,
04:17and there were a lot of people who just hated it,
04:19and just, I figured that my career was over.
04:21I really did.
04:22It was an incredibly painful time.
04:24And a turning point.
04:25Seamus decides to make a change, and heads north.
04:28And I thought I'd just go hide.
04:30Go hide at Microsoft for a while.
04:31I chose a program manager job in the graphics division,
04:34because I just wanted to get away from games.
04:36But he's not able to resist games for long.
04:38In 1999, Sony announces the release of their newest console,
04:43the PlayStation 2.
04:44And enterprising Seamus has an idea.
04:47Rumors of, you know, really, this illusion of the PlayStation.
04:55That it was going to kill PC graphics that right.
04:58And, you know, I've been doing 3D for a long time,
05:00and 3D on the PC is unstoppable.
05:01I mean, it's just continuously, continuously in it.
05:05Continuously being back, and it's continuously progressing.
05:08And it just seemed ludicrous to me.
05:10It became clear to me that, you know,
05:13very few companies in the world could do something as bold as take on Sony,
05:17and Microsoft was one of them.
05:19But it became incredibly clear to the other guys that I talked to about it
05:22that we had an opportunity to make a game console,
05:24which had the business potential of a game console,
05:26but had the tool support and the power for artists of the PC,
05:32and of the sort of traditional offline rendering community.
05:35And that was really the spark.
05:37And at 35,000 feet in the air, Seamus is inspired.
05:41So, you know, one night, for whatever reason,
05:44I was sitting on an airplane, and, you know,
05:46I got hit by cosmic radiation.
05:49And I wrote this thing up, and I took it to my friend Kevin
05:52at, like, 2 a.m. after I landed.
05:54I called him up at home.
05:55He said, you know, we've got to make a game console.
05:59Kevin Baucus, a project manager at DirectX, sees the potential.
06:03Initially, there were really four of us working on Xbox.
06:06Seamus, myself, Otto Burkus,
06:08who ran the graphics development for DirectX,
06:12and Ted Hasse, who was my boss,
06:14who was in charge of evangelism for DirectX.
06:17We obviously went and talked to Ed Fries extensively
06:20about what his thoughts would be.
06:22Ed Fries, the man in charge of the games division at Microsoft,
06:26is immediately impressed.
06:27They approached me and said,
06:29Hey, if we made this console, would you support us?
06:34Would you help us get it through upper management?
06:36And would you help make the games for us?
06:39They were pretty persuasive.
06:40They had a plan that I thought was pretty exciting.
06:44The group embarks on a crusade to bring the console to the masses.
06:48We had day jobs.
06:49We had stuff we were supposed to be doing, right?
06:52And we just weren't doing it, right?
06:53We were inviting ourselves to meetings.
06:55And we thought, God, you know, if they're making a device for the home,
06:57it has to be Xbox.
06:58It has to be this thing we're thinking of,
06:59which at the time we were calling the DirectXbox,
07:01which is how we got the name Xbox.
07:03The group pushes the idea up through the ranks at Microsoft,
07:07eventually reaching the top.
07:08Take me to the top.
07:10Mr. Bill Gates.
07:11The first time that we talked to Bill Gates about Xbox,
07:14I think he was immediately very taken by the opportunity,
07:17by the chance to create something that was technologically superior
07:20to anything that was out there, and really focused on a single task.
07:24Bill got it right away.
07:24Bill was a very sharp guy.
07:27So he became one of our biggest allies from the beginning.
07:29It was just awesome.
07:30It was the most awesome sort of, you know, support ever.
07:32And they just kept on pushing it.
07:34Bill Gates sends a memo endorsing the Xbox project.
07:38For Seamus, Kevin, and Ed, the moment of truth finally arrives.
07:42Wow, we better get this right,
07:43otherwise it could potentially really screw up the industry.
07:54By 1999, the Xbox is a legitimate project.
07:58Software giant Microsoft
08:00assembles a team to oversee key elements of the Xbox production.
08:04Jay Aller came on board to run the development efforts
08:07to create the operating system for the device,
08:09all the development tools, that sort of thing.
08:11And he brought on board and there were people in key positions
08:14to kind of round out that group.
08:15It was still just an internal project at Microsoft
08:18that wasn't something that had been officially announced.
08:22It was still very much under wraps
08:23because they themselves weren't sure they were going to do it.
08:26But the very fact that Microsoft was considering
08:28coming into the games console market was a big deal.
08:32It could potentially be a bad thing
08:33if Microsoft decides they're going to launch,
08:35like, basically a home PC.
08:36They entered a gaming console
08:37and put a bunch of PC games on it or something like that.
08:39Which, to those guys who are very smart guys at Microsoft
08:43but don't have a lot of context in the game business,
08:45could well have happened.
08:46And so we felt a lot of responsibility
08:48to be sure that that wouldn't happen.
08:51And the response from the gaming community is encouraging.
08:54When we went out to publishers and developers
08:56is that we've been kind of secretly meeting with all these guys
08:59for months and months and months refining the idea.
09:03You know, what do you guys think about this?
09:04Oh, that's a crazy idea.
09:05What do you think about that?
09:06Oh, that's great.
09:07As push comes to shove, Gates makes a historical decision.
09:10It was a meeting where Valentine's Day is a month before GDC
09:14and it was the point at which we're going to announce it at GDC
09:17or we're going to cancel this project
09:19because we're not going to be ready in time.
09:21It was just the final time.
09:23It's like, look, you know, you have to say go or no go now.
09:26Starting up a console and spending billions of dollars
09:29to enter a new market is a difficult undertaking for any company,
09:33even a company the size of Microsoft.
09:35So we come into this meeting.
09:37It's scheduled to run from 4 to 6 o'clock on Valentine's Day.
09:40And Bill is just like immediately on the attack.
09:43But what do you mean it won't run windows?
09:44Oh, did we forget to tell you that part?
09:47And you find yourself sitting in a room with Bill Gates and Steve Ballmer
09:50and Steve Ballmer is right here, like, you know,
09:52with the sweat standing on his forehead saying, you know,
09:53you're going to lose all our money!
09:55We all have dinner reservations and we're in good trouble
09:59because it's Valentine's Day and we're not home
10:01and the time is going by.
10:03And then in the last five minutes the meeting just, like, turned,
10:08turned around like 180 degrees.
10:10And, you know, I don't know if Bill and Steve had this planned
10:12the whole time.
10:13And all of a sudden they're all looking around at each other,
10:15we've got to do this, we've got to do this.
10:17You know, they're all getting excited, which is fun to be part of.
10:19In March of 2000, Bill Gates stands on stage
10:22at the Game Developers Conference
10:23and announces what many had already suspected.
10:27I'm announcing the Xbox.
10:30The modest tagline here is the future of console gaming.
10:34This is a huge milestone for us.
10:37All they have to do now is accomplish everything
10:39they said they could.
10:41Well, I remember thinking, what have we gotten ourselves into?
10:43You know, once the product was finally approved
10:47and there were absolutely no other reviews or approvals processes,
10:51once Bill Gates and Steve Ballmer said,
10:53look, you know, this is it, we're not looking back,
10:55then the really hard work came in.
10:57Every assumption that we had, every plan had to be tested.
11:00And it was challenging.
11:02You have this giant company behind you, Microsoft behind you, right?
11:05You get Microsoft, like, going in a direction,
11:08you better be sure it's the right direction, right?
11:10So we started feeling like, wow, we better get this right,
11:12otherwise it could potentially really screw up the industry.
11:16There was a lot of skepticism about, you know,
11:18were we really serious about doing this?
11:19Was there ever even going to be a console?
11:21There was skepticism about whether we would be able to hit our launch date,
11:24whether the performance would be what we said it would be,
11:26whether it would, in fact, be easy to program.
11:29At every step along the way, there was a constant proving process.
11:32We had to show games very early because, you know,
11:34we needed to demonstrate what the game was going to be.
11:36We had to show that it wasn't a PC.
11:40You know, we built the system for developers.
11:42There was nobody out there who wouldn't tell you
11:45the Nvidia chip was the hottest thing in the world.
11:47Nobody.
11:47All consoles are essentially computers.
11:50There's a processor.
11:51There's a graphics chip.
11:53There's an audio chip.
11:54All the things that you see in a PC are evident in a console,
11:58but they're very different.
11:59They're very focused on a very specific thing, on gaming.
12:03And sometimes it's not what's on the inside,
12:05but the outside that counts.
12:07In January 2001, the public gets its first look
12:11at the controller and industrial design of the Xbox.
12:14Of course, we didn't want the Xbox to look uncool.
12:17We wanted it to look powerful.
12:18We did a lot of design studies.
12:20One of the things that enthusiasts press was the controller.
12:23Some people didn't mind the fact that the original controller,
12:27which they called Duke, was bigger.
12:29But I think to a lot of the gamers,
12:31they just kind of felt that, eh, it was just a little too big.
12:33And they've subsequently gone with the S-type controller,
12:37which they developed for Japan,
12:38which was definitely better.
12:41As the launch date approaches,
12:43Microsoft's marketing machine shifts into high gear.
12:45Microsoft faced this huge dilemma
12:47with how they were going to position themselves in the market.
12:51Do we brand it Xbox, but, you know,
12:53do we have Microsoft on the box?
12:54Do we use Bill Gates?
12:55Is Bill Gates liked by gamers?
12:57So I think they had a huge consumer marketing identity crisis
13:01that they sort of needed to address right away.
13:06Anticipation builds on November 12, 2001 in Times Square.
13:10I remember walking across the street from the WWF place
13:14over to the Toys R Us to get ready for the midnight thing.
13:19Bill was there and a couple other people.
13:21And Xbox is just everywhere.
13:25Up on the lights, every billboard in Times Square,
13:29all the big electronic signs,
13:31and there's Xbox here, Xbox there.
13:33And it was just, I don't know,
13:35it's one of those kind of surreal moments.
13:37One, three, two, one.
13:41At 12.01 a.m., Bill Gates presents the first Xbox
13:44to a customer who had been waiting for hours outside.
13:48Yeah, it's just one of those moments in your life
13:50that you're just glad to be part of.
13:53But Shamus has other things to worry about.
13:56Well, I was super nervous
13:57because I was going to propose to my wife that night.
13:58You know, that was the thing I was really nervous about.
14:00And I had arranged for Bill Gates
14:02to hold my engagement ring, right?
14:04So he had my engagement ring in pocket.
14:06And Bill had called me that afternoon and said,
14:09you know, what if she says no?
14:12Do you have a backup plan in case she says no?
14:15And so I'm thinking, God, is she going to say no?
14:17Because I had no doubts up until that moment.
14:19I was like, oh, no, oh, no, no, no.
14:22She'll probably say yes.
14:23It'll all be okay.
14:25Frankly, compared to that,
14:26the launch of the Xbox is almost anticlimactic.
14:28You know, for me, the launch was all about getting on my knee
14:30and, you know, having the most fabulous woman on earth
14:33say she'd marry me.
14:34Look at the graphics.
14:35Look, look at the smoke.
14:36Look, look, look, look.
14:37I'm on fire.
14:39With a successful console launch and an engagement,
14:43Blackley has achieved everything he has hoped for.
14:45But the fate of the Xbox is far from certain.
14:58This is an Xbox.
15:00It's number one.
15:04Success.
15:05With the Xbox successfully launched in time for Christmas 2001,
15:09the future of the system now lies in the hands of the developers.
15:12Well, I think that the number one thing that we wanted to achieve
15:16was for people who got an Xbox to just be blown away.
15:24That has to be the ultimate goal, right?
15:26You know, we talked to the people in line in New York
15:28and they were really excited about Xbox.
15:32The first Christmas, all the hardcore gamers are going to go out
15:34and they're going to buy it because they got it.
15:35It's new.
15:36It's exciting.
15:37There's a lot of press about it.
15:38They got to see if it's, if it really lives up to the hype.
15:40But she don't want to take it home and like open it up and,
15:43and have it set up.
15:45And that actually happened with a couple of other console launches, right?
15:47People got excited for the technology.
15:49You take it home and, of course, technology isn't enough, right?
15:51It goes on and makes the boot noise.
15:52And then you put in a game that's not so great.
15:54And you're like, whoa, they went 300 bucks.
15:58Oh, that was awesome.
16:00They have to feel incredibly happy about it.
16:04The thing sold out everywhere and it was just, you know, a giant success.
16:08The real question on any console is how it does in subsequent years,
16:12you know, especially the second Christmas.
16:14That's really important.
16:15That's when, to some extent, the real battle happens.
16:19Because everybody has a lot of units out there, a lot of consoles.
16:23And the generation of games that come out into that installed base appear.
16:29So what happens in the later years is really kind of dependent on the quality of the games.
16:33That is, is something that's, you know, just a very magical and very difficult thing to predict in advance.
16:39And then it's a real creative contest, right?
16:41Then it's, it's not about the specs of the hardware.
16:43It's not about how cool your TV campaign is.
16:45You know, it's not about any of those things.
16:46It's about which games you have and, and are your fans happy or not.
16:50So I would argue the real work occurs then.
16:52If you've got a great game and it's only available on Xbox,
16:54and it's the thing that everybody's excited about, then they're going to go out and buy Xboxes.
17:01Microsoft's development team, Bungie, provides the must-have game for the season.
17:05Halo was, was awesome.
17:07We're not going to make it!
17:08We'll make it!
17:09Pull up!
17:09Pull up!
17:13Played a lot of games in my life and this is a game I could just sit and play and
17:17play and have a great time.
17:19So I really felt pretty confident that we were going to be able to come out and really surprise people.
17:29Despite fierce competition, Microsoft manages to sell 1.5 million consoles and nearly 5 million Xbox games by Christmas.
17:38Developers take advantage of the console's hardware abilities to create distinct and innovative games.
17:54I'd have to say that right now my favorite game is a game from Microsoft Studios that just came out
17:58called, uh...
17:59Kung Fu Chaos!
18:02It's a fighting game, but it's kind of a party game.
18:07And to see that kind of work and craftsmanship going to a game produced for something that kind of we
18:13had had an idea about, you know, three years ago, four years ago, is just astounding.
18:21In the fall of 2002, Xbox Live is launched.
18:25We've been cooking this thing up very, you know, from the get-go.
18:28Three years ago when we conceived of Xbox, we wanted to bring it online.
18:31You know, online gaming is going to be the big next step in video gaming.
18:34And a celebrity event is held.
18:37These are always really fun parties.
18:39Bring it on!
18:40Yeah!
18:43I'm excited.
18:43It's so exciting and it really improves the hand-eye coordination.
18:51It's awesome, man. It's awesome.
18:52Super fun.
18:53Great games.
18:54Realistic.
18:55I think that's off the chain.
18:56Yeah, I love this stuff.
18:57Gift bag.
19:07In my mind, I connect the dots thinking about Xbox.
19:13Even as the Xbox continues to succeed, preparations are made for a new system.
19:18Go for it!
19:20We're deep, deep in planning right now for the next version of Xbox.
19:24Is this guy serious?
19:25I actually probably spend more time right now when I'm in the office.
19:28I probably spend more time right now on Xbox 2 than I spend on Xbox One, if you can believe
19:32that.
19:33Whatever!
19:33And part of that is because we've got to do it right this time.
19:37We want to have enough time to make sure that we're not, like, just insane at the end.
19:45And that we have the content portfolio really planned out, and that we have the games lined up, and that
19:50we have this machine that's not only going to be successful in the US, but can be successful everywhere in
19:56the world.
19:56And that's what's going on.
20:02Although Kevin and Seamus have left to start their own development company, just taking a look back is sometimes the
20:08greatest reward.
20:09It was a mixture because, on the one hand, it was really, really hard.
20:15But on the other hand, I mean, it was probably the best time I've ever had in my life, because
20:19we were out doing what we wanted to do.
20:21I mean, you know, very few times do you get the opportunity to actually see kind of your, you know,
20:27a dream that you had come together, and so many people come together to make it happen.
20:31Like, looking back to, you know, 1999, it's just unbelievable.
20:36I went to Tokyo Game Show, and there were giant Xbox banners everywhere, right?
20:41It's unbelievable.
20:43And you think back to 1999, you think back to me and Kevin and Otto and Ted,
20:48these four guys, like, sitting in a room eating jelly beans, you know?
20:52Come on. That's a wild ride. That's a really amazing thing.
20:55So I guess for me personally, there's that.
20:59I can't really hold it to an absolute scale, because it's really emotional.
21:01So it's just, uh, yes, it's nearly unbelievable.
21:13Xbox is the next generation of video gaming.
21:18It's the only control I've ever touched that actually, like, molds to your hand.
21:24Dead or alive. Dead or alive.
21:26That's a good game.
21:26Yeah, it's pretty cool.
21:31No, no, no. I let him play all the time. He keeps him home.
21:35It's awesome. It's the best console ever, man.
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