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TVTranscript
00:00It's 80 times more powerful than its predecessor.
00:03We wanted to get a lot more CPU and graphic source power.
00:07It's designed to take gaming to the next level.
00:11We've got Dolby 5.1, we've got high def, everything's ready to go for you.
00:16We weren't driving toward a spec, we weren't driving toward a marketing campaign,
00:20we were driving for how do we make real games as good as they possibly can be.
00:24And it's poised to become the new king of interactive entertainment.
00:27We're going after people.
00:28People on Earth is our market.
00:30Our strategy is to provide a great platform for game creators to do their best work.
00:36It's that simple.
00:37It's the Xbox 360, and this is its story.
00:52In 2001, the console wars are raging.
00:55The software giant Microsoft finds itself playing a role that it's not accustomed to, the underdog.
01:03On Xbox One, our goals were pretty simple.
01:05It was beat Sony's performance and get to market faster than anyone's ever developed a game console.
01:11We were new to the market, brand new product in an established environment.
01:15Sony already had a huge installed base by the time we hit the streets.
01:19They'd been out about 18 months before we launched.
01:22The challenge on Xbox One was all about time to market and maximized performance.
01:28We knew what Sony's architecture was, we knew we had to trump that architecture, and we knew we had to
01:32develop it in 18 months faster than anybody had ever developed a game console.
01:37Well, this is a very big night, a night that we've been waiting for for over 18 months.
01:44The launch itself was really successful.
01:47Three, two, one!
01:54When we did launch, we sold out every one we had.
01:56We had a pretty good launch lineup, and we just kept building momentum.
01:59Xbox Live launched a year later.
02:01We pushed out around the world in the year.
02:04Look at this moment, look, look, look, look, I'm on fire!
02:08So we were very, very happy with the launch of Xbox.
02:13By August 2005, 13 million Xbox consoles are sold in the U.S.
02:18A strong showing for a newcomer.
02:20But it's short of Sony's established base of 30 million PlayStation 2s.
02:25While the original Xbox is anything but a failure, Microsoft has already set its sights on the next round.
02:32The Xbox 360 program started back in 2002.
02:36The codename for the product was Xenom.
02:40The lessons learned from the first Xbox prove invaluable.
02:45When we think about Xbox, it was really kind of learning the business.
02:49Microsoft had never done a game console before, hadn't really done a hardware business at this scale before.
02:55So there was a lot to learn, just about how to run a business, how to sustain the business.
02:59They wanted to get a foothold in the market.
03:01They wanted to figure out what worked.
03:04As we got into the market, we realized there was a lot more to the business that we didn't understand.
03:09Actually building a successful business on the financial side and building a bigger ecosystem where more of our partners could
03:16make profit.
03:18One of the big lessons we learned from Xbox was being more of a worldwide company.
03:22Xbox was kind of a U.S.-centric product.
03:25I mean, it was a bunch of Microsoft guys, team members that got together and built a product.
03:30One of the things we learned was, hey, we didn't build a box that was as universally appealing as we'd
03:33have liked.
03:35So in Japan, it was a little intimidating.
03:37It was black, it was big.
03:39It wasn't something that they necessarily wanted to have in their home.
03:44In Europe, again, the black box wasn't as universally as interesting.
03:49At that time, we didn't know exactly what our architecture was going to be.
03:52We didn't know when Sony was going to launch.
03:54We didn't know what Nintendo's position in the market was going to be.
03:57So rather than picking a final architecture early on, we built a flexible architecture with some high-level goals and
04:04premises around how should we make architectural trade-offs.
04:07We got all together and said, how can we build the best overall product?
04:11And we went through a process of time where we actually sat down and developed a plan, basically a 30
04:17-page document that said, here's what we'd like to build.
04:19And we did that in the context of a worldwide product.
04:22How do we address the Japanese market?
04:24How do we address the European market?
04:25How do we address the U.S. market?
04:27How do we look at other regions around the world?
04:29How do we attract a broader audience?
04:31How do we make it great for the hardcore gamer?
04:34As the Xenon team puts together a game plan for the Xbox 360, Microsoft starts looking for the next-generation
04:40technology that will power it.
04:51Armed with the lessons learned with the first Xbox, Microsoft begins to piece together their next console bit by bit.
04:59We didn't want to be second to market again, so what that meant to us was that we felt we
05:04had to be ready in 2005.
05:05It's important for Microsoft to come out first because they want to beat Sony, who's the market leader, two generations
05:11in a row.
05:11They need every single tool they can use, including an early launch, to get ahead of the software.
05:21We started working on a 360 plan, putting together the early details, working on what we thought the hardware plan
05:27was going to be.
05:30It's a really interesting process because you're always balancing this ultimate design that you want to have against technological constraints,
05:39schedules constraints.
05:40All these things can affect what you can do from a design standpoint.
05:45So you look at things and say, well, this is the ultimate experience, and then we go over to the
05:50hardware team and they say, oh my goodness, if you do that, that adds two cents.
05:54We're like, two cents? Oh, well, two cents times X million is a lot of money.
05:58There's some basic features, if you will, that we want in all of the 360 games.
06:03High-definition games is one of them, for example.
06:06Games that look great in 16x9 high-definition.
06:08Games that have full surround 5.1 audio.
06:14The HD era, we're really on this turning point for the industry.
06:18From the 2D to 3D generation of gaming, all sorts of things changed.
06:25A lot of rules changed, a lot of players changed, and obviously the experience of the gamer received changed as
06:31well.
06:32We're now on the next shift, which is really from 3D to high-defin.
06:37The real key to the system itself is making sure we have a system that's powerful developers to really get
06:44to what we call the HD era.
06:45We made a decision a while back to really invest in the system memory.
06:48And so as a result, developers now have 512 megs of system memory to deal with.
06:54Enough memory for them to really deliver a true next-generational and high-definition experience.
07:00We wanted to get a lot more CPU and graphic source power.
07:04It quickly became clear that to get the level of performance that we needed, NVIDIA and ATI were the two
07:09frontrunners.
07:11The big advantage that ATI gave for us is they shared our vision of the HD era.
07:16ATI shared that vision of how can we maximize the real performance for real games.
07:20We weren't driving toward a spec. We weren't driving toward a marketing campaign.
07:25We were driving for how do we make real games as good as they possibly can be.
07:28And then once you're ready to go for HD, we're ready there for you because we've got Dolby 5.1.
07:34We've got high-def. Everything's ready to go for you.
07:37At the heart of the Xbox 360 are three IBM CPUs that, when combined, are 80 times more powerful than
07:45the original Xbox.
07:47We picked IBM over a bunch of different suppliers mainly because of the efficiency of their architecture.
07:52By efficiency, I mean trying to cram as much CPU horsepower into a very small package, a very small console.
07:58Those were key elements in picking IBM.
08:01They were willing to work with us in terms of giving us control of our own destiny, in terms of
08:05silicon manufacturing.
08:06We can control that, so you want to find a partner who's willing to work with you in that respect.
08:09So, long-term roadmap, partnership, lots of business issues again, but ultimately it was the right partnership for us.
08:16Microsoft wants developers to harness all this newfound power as easily as possible.
08:21A real asset that we built in Xbox was our partnership with both developers and publishers,
08:26something we focused on very early, and something historically Microsoft has actually done pretty well.
08:31Microsoft's also done a really good job of supporting third-party developers.
08:35Ubisoft, THQ, EA, and Activision, and they all have said Microsoft's been really helpful.
08:42Also, efforts are redoubled to capture the interest of Japanese game companies.
08:46Japanese game developers has been a tough group for us because we haven't been as successful in Japan.
08:52But I think we're doing some really smart things now.
08:55We're forging some great partnerships with some of the best historical Japanese developers.
09:00Sakaguchi-san, as the creator of Final Fantasy, is going to be doing two individual proprietary pieces of intellectual property
09:07that will be exclusive for Xbox 360.
09:11Mizuguchi-san is one of my favorite developers.
09:14We all love things like Space Channel 5 and Rez.
09:18And, of course, Okamoto-san, most famous for his work on Resident Evil.
09:22They've done a good job of getting Japanese developers on board.
09:25And through it all, Bill Gates himself keeps tabs on the progress.
09:29On Xbox One, I met Bill two times in two different meetings during the course of a four-year program.
09:35On Xbox 360, for the first year of the development, we were in the boardroom almost once a month.
09:41He was so excited about the product that he just wanted to get involved and wanted to be down here
09:45on the Millennium Campus helping us.
09:47While Microsoft works on the insides of the new Xbox, it focuses an equal amount of attention on the outside.
09:53We thought maybe this could have a hamburger in it, but so we didn't really think that it worked that
09:57well.
10:06The Xbox 360 is shaping up to be a gaming powerhouse.
10:10And Microsoft wants to make sure that its new system's appearance reflects its amazing abilities.
10:15We started with this guy, which was a really wonderful box.
10:19It worked really well, but let's just say it needed a little more love in terms of design aesthetic.
10:25So we thought, well, where can we go with this?
10:28If we think about Japan and some of the issues we've had in Japan as regards the inability of us
10:34really to get going, quite frankly, one of the core issues has been the design of the current Xbox.
10:39That system was gigantic.
10:41It was heavy, and it didn't appeal to anybody but Americans and a few Europeans.
10:46It was way too big for the Japanese market, and Microsoft tanked in Asia.
10:51Tanked.
10:51I mean, it didn't sell badly.
10:53They sold horribly.
10:54So the criteria I laid out for the brand team at that time was, you know, we have got to
10:58be able to satisfy the Japanese gamer.
11:02We actually looked at five different design companies from around the world.
11:06It narrowed down to two companies.
11:07One was Astro in San Francisco, and another one is HERS in Osaka.
11:12Got to a point where designs were going back and forth between HERS and Astro.
11:18And so they started playing with what's the button going to look like?
11:21What happens when you actually have enough ports for game play and all those kind of things?
11:26And so it started really drawing in.
11:29The design of the box and the form factor that we ultimately landed on is always a trade-off between
11:34mechanical constraints being thermal and physical constraints versus industrial design.
11:40It's very similar to an architect and a civil engineer building a skyscraper.
11:45The best-looking design may not be able to be built.
11:48The most robust design may be very straightforward, ugly, not the type of thing you'd want to actually build.
11:53What we wanted was this breathe-in quality where it breathes in.
11:59You get this sense of power as though you're in the blocks and starting a race,
12:03or the analogy was Bruce Lee pulling back to do a punch.
12:09On one end of the spectrum, if you make the box too small,
12:13you end up with a box that is too hot, too loud,
12:16with the fans having to churn a lot of air through that box to pull it off,
12:20too high of a cost in miniaturization costs.
12:23The other end of the spectrum, if you build only a mechanical design solution,
12:27you end up with a very large, ugly box.
12:29It may be quiet, but it's not aesthetically pleasing.
12:31We did user studies.
12:32We went through around the world, Germany, France, England, United States, parts of Asia,
12:38talked to different designers, talked to different gamers,
12:42and said, you know, what are you interested in?
12:44And it started taking shape.
12:47We kind of had some interesting changes here.
12:51This one came from Japan, and it had a very nice pillowy feature to it and had the handle.
12:57Again, it was not a practical box.
12:59Really, what we were trying to do is see what people responded to.
13:03It really ran the gamut.
13:04I mean, you got this kind of guy, which has some nice features on it in terms of the chrome
13:09and all that,
13:10but it's still pretty boxy and might look like someone else you might know.
13:13This came from a very high-end designer.
13:16We thought maybe it could have a hamburger in it, but so we didn't really think that it worked that
13:21well.
13:23Oh, look at that.
13:24There were some sleek designs, too, that brought in things like glass textures, and these are really explorations.
13:30So what you will see is somewhat concave.
13:34It has what we call the iconic gesture.
13:36That gesture is iconic enough that makes it distinctive, but not too bold and brash that will make it look,
13:43if you will, out of fashion after a couple of years.
13:46And what we ended up with was this design.
13:50And you can see there's a lot of what was here has been incorporated into the final design.
13:56You get the gesture.
13:58You get the breathe in.
13:59You get a design aesthetic that is more appealing to a wider audience.
14:03You get some of the chrome and some of the finer lines, the organic lines,
14:07but there's still an architectural quality about it and a simple quality that allows you to really get a sense
14:13that this is a high-quality machine.
14:16You can see the difference between the two.
14:19A few finishing touches round out the final package.
14:22You'll be able to take the faceplate off and snap on a faceplate either absolutely personalized to what you want
14:28to do.
14:29This is our favorite feature, too, is that we have the ring of light.
14:32It's the thing that tells you how many controllers are actually attached to the system.
14:38And you see that this is in the upper-left position.
14:41Okay, you ready for this big move?
14:43All right, ready, here we go.
14:44So it's in position one now.
14:47Look at that.
14:48Ooh!
14:49An equal amount of care is given to the design of the Xbox 360 controller.
14:55So the areas where we put lots and lots of energy into this is the gamepad itself.
14:59People are going to be holding this for hours on end, playing games, playing different types of games that use
15:04the control sets in different ways.
15:06We did tons and tons of user testing, and we went through all kinds of iterations, some of them even
15:12laughable, like this one.
15:15And what we did is we actually tried different sizes and shapes.
15:19So we kind of go, oh, how's that feel?
15:21We need to pass this around, a whole basket full of these, and go, how's that feel in your hand?
15:25Oh, I don't know, that feels pretty good.
15:27And then he handed it to somebody else, and they go, no, that doesn't feel good.
15:30One of the key elements to making the console as unique as it is is the decision to go wireless
15:35on the gamepads.
15:38The Xbox 360 controller is not a revolutionary controller.
15:42It's an evolutionary controller.
15:44Microsoft took the basic shape of the S controller from the Xbox and refined it and polished it and crafted
15:50it to a much more ergonomically fit controller.
15:53It's lighter.
15:55It's very sturdy.
15:56It feels good in your hands.
15:58But no matter how well-designed a controller is, no matter how slick a console looks, it all comes down
16:04to the games, and Microsoft knows it.
16:15Microsoft knows that having a solid launch lineup can play a big role in the success of the Xbox 360,
16:21and that's why it's pulling out the big guns.
16:24The world's best game creators are building experiences on our console that satisfy gamers and actually reflect the change that
16:33our industry and that the consumers are facing right now.
16:36There's no super stinkers out there.
16:37You've got four games from Activision, all pretty hefty games.
16:41They're all franchise games except for gun.
16:43You've got a bunch of EA games, all franchise games.
16:47Madden, Tiger Woods, FIFA, all that.
16:49They really show off the Xbox 360's power.
16:54Well, I think the key is going to be the games.
16:56And when we look at what we have on slate for the launch window, finally, Rare in the UK will
17:02come to bear on this platform.
17:05Perfect Dark Zero will be in the launch window.
17:08The GoldenEye team have been working on Perfect Dark Zero now for close to three years.
17:13The other thing about the launch is that Microsoft's three games, Cameo Elements of Power, Perfect Dark Zero, and Project
17:21Gotham Racing 3, are all some of the best games on the system in terms of both playability and graphics.
17:29Gamers get a glimpse of the new system and its games at E3 and X05.
17:35At E3, we showed some games.
17:37They were okay, but it was early development, early hardware.
17:39X05 was really our coming out party.
17:41We wanted to show people what great games we're going to have on the platform at launch.
17:45When we came to X05, we were relieved, happy, satisfied that these games were actually going to come through.
17:51This was going to be a good launch after all.
17:54Turning on the Xbox 360 reveals plenty of new features, including a major upgrade to Xbox Live.
17:59So, to start off the experience, we've got this new great button.
18:03It's the Xbox Guide button.
18:05It not only helps you get through your overall experience on the gaming system, but it also allows you to
18:10turn on the system.
18:16There are four Blades.
18:17There's a Live Blade, Games, Media, and System.
18:20If you're hooked up to Live, the Blade that will default is the Live Blade.
18:24And it gives you all the access to your message center, to your friends, and also to Marketplace.
18:29And Marketplace is a place where you'll be able to download new gamer pictures, new tracks, different themes that go
18:37with your faceblades, or just themes in general.
18:39On the Games Blade, you have the ability to look at your achievements, how many games you've played.
18:44The Media Blade gives you access to all of your digital entertainment.
18:48You have access to music.
18:56So, you can hook in an iRiver.
18:58Also, you can plug in a camera, set up a slideshow, play music over it.
19:03In Xbox Live, now, we create what we call gamer zones.
19:06In gamer zones, you can kind of place yourself where you want to be on the spectrum of gamers.
19:10So, if you're just kind of a recreational gamer, we have a gamer zone called Recreation.
19:13But if you're a really hardcore gamer, and you really like to play hard, and you want to win that
19:17world championship, you know, we have Pro.
19:21When the Xbox 360 launches on November 22, 2005, Microsoft tries a new approach to pricing.
19:28So, there are two versions of the Xbox 360 products.
19:30The first version is the Xbox 360 Core System, which is a low-cost value system that allows people to
19:36get into the product,
19:38plays every game, loses no long-term features.
19:40You can upgrade the core system to the full 360 system at any time through aftermarket accessories.
19:46The Xbox 360 system, on the other hand, was optimized to have everything you need out of the box for
19:51a great gaming experience.
19:53It's optimized for high-definition, for the hard drive, for Xbox Live, with all the cables and connections you need,
19:59wireless connectivity with wireless gamepad.
20:02That's the system where the highest value is packed into that system for the gamer that wants the ultimate next
20:09-generation experience.
20:09For the first time ever, a console will ship in all three major markets of the world in the same
20:14holiday.
20:14So, you will see North America, quickly followed by Europe, and then followed by Japan.
20:19As the Xbox 360 takes its first steps into the world, Microsoft is already preparing for the future.
20:26The 360's primary upgrade path is the software architecture that we've designed.
20:31It's designed to be scalable and upgradable.
20:33On the hardware space, because we designed a console that had a flexible architecture, for example, the PCI Express bus
20:39exists on the motherboard.
20:41So, doing a derivative motherboard and a derivative product where we wanted to add features would be very easy for
20:46us to do.
20:48That's the interesting thing about this business, is the finish line is the beginning in many, many ways.
20:53Once it gets out there, people are going to take control of it, and the community will start driving it.
20:57And they'll grow it and build it, and they'll turn it into something that none of us expected.
21:01Yeah, we're going after people.
21:03People on Earth is our market.
21:04Our strategy is to provide a great platform for game creators to do their best work.
21:09It's that simple.
21:11Obviously, they want to do well with the system.
21:13They want to hammer Sony in all of its sell points.
21:20They want to kick their ass in online.
21:23They want to kick their ass in the interface.
21:24They want to have a bunch of great games.
21:26They want to get out there a year ahead of them and really, really take it to Sony.
21:31They want to be first.
21:32They want to be the number one console maker in the market.
21:34I'm really excited about seeing the launch.
21:36It's been over three years focusing on this product.
21:39And to look back at early slide decks, PowerPoint vision of what the product could be three years ago,
21:45to what we actually are delivering now, we got to 99% of that original vision, which is amazing to
21:51me.
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