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On its 5th birthday, looks back at the console's history.

Dark blue icons of video game controllers on a light blue background
Image credit: Eurogamer

November 15, 2001. With PlayStation 2 dominating the console market, software giant Microsoft - renowned for its Windows operating systems and PC gaming titles - takes its first, bold steps into the console gaming arena with the US launch of the highly anticipated and much vaunted Xbox.

Its release signals the start of an epic rivalry between Microsoft and Sony, two corporate giants jostling for marketplace supremacy like a pair of combatants in a coin-op beat-‘em-up. Console gaming would never be the same again...

A New Beginning

Despite the countless millions pumped into its aggressive marketing campaign, Xbox’s birth was anything but idyllic. By the time it hit the shelves, PS2 already boasted an impressive back catalogue, which included PS2-exclusive, multi-million selling franchises such as the Grand Theft Auto series.

Microsoft’s task was made even harder when Sony inevitably dropped the price of PS2 on the eve of Xbox’s launch - a tactic which helped the machine almost triple its previous year’s sales figures from 6.4 million to 18.5 million, further hampering Microsoft’s early efforts to gain a convincing foothold on the market.

But Xbox wasn’t without its own fair share of merits, not least its excellent online capabilities, built-in hard drive and vastly superior system specs which provided developers with some exciting new possibilities. "Shipping a console with a hard drive was a big step," explains Jaime Griesemer, a designer at Bungie Studios.

"For games that took advantage of it, the hard drive virtually eliminated load times, allowed for much higher resolution content and huge amounts of audio. Also, you can't really do downloadable content without a place to store it. It was crucial to Halo. We couldn't have had those giant levels, thousands of lines of dialogue, no load times and checkpoint saves without it."

Brand Management

Perhaps one of the most significant reasons why Xbox didn’t achieve an even greater level of success was franchise exclusivity, a factor which was to prove a major stumbling block in Xbox’s attempts to establish itself as a viable alternative to PS2. After the staggering success of PSone franchises such as Gran Turismo and Tekken, PS2 had an inherent advantage over its rival.

PS2-exclusive sequels such as Grand Theft Auto: Vice City (which would go on to sell some 14 million copies worldwide) only served to highlight the chasm that Xbox needed to span.

"PS2 built up a massive head start over Xbox by coming to market fully 17 months ahead of it in Europe, and about 14 months in the US," explains Kristan Reed, Eurogamer editor.

"But that's only half the story. What really catapulted the PS2 into orbit was the release of GTA3 in October 2001. At the time, nobody quite realised what a true system seller this was going to be for Sony, but it - and the subsequent release of Vice City and San Andreas - made sure that the PS2 was the console you absolutely had to have."

Bungie Jumping

Microsoft desperately needed a hit, and towards the back end of 2001, it got one. Released to titanic critical acclaim, Bungie’s first-person shooter, Halo: Combat Evolved, would prove to be the console’s flagship title - cementing Xbox’s position as a viable contender to PS2 while showcasing the console’s impressive capabilities.

The game shifted a hugely impressive 6 million units worldwide and, almost overnight, the Xbox was up and running. It was to be a success that would only to be surpassed by Halo 2, which racked up an even more formidable 7.5 million worldwide sales.

Halo’s success proved to be both the Xbox’s turning point and its defining moment. "It certainly established the Xbox as the FPS console," explains Griesemer.

"I think a lot of publishers thought that it was the perspective or the sci-fi setting that sold the game, so there was a slew of sci-fi first-person shooters after Halo hit. Lots of those games didn't do very well because they were borrowing the wrong things.

"Luckily, I think a lot of developers saw the real reasons Halo worked, things like recharging health, the accessibility of the controls, having instant access to grenades and melees at all times, AI that didn't cheat, the checkpoint system that didn't punish you for taking risks and dying, the two-weapon limit, all the ways that we broke with established FPS conventions... So now you even see Halo's influence in lots of non-FPS games."

Other titles such as Project Gotham Racing, Fable and a raft of Tom Clancy games, including Splinter Cell and Ghost Recon, would also go on to provide a core base on which Microsoft could build.

Going Live

Xbox Live’s influence on the console’s success should also not be overlooked, as it allowed console owners to enjoy viable online gaming experiences for the very first time.

"Xbox Live was a phenomenal success on Xbox," reminisces Microsoft’s senior director for UK home and entertainment, Neil Thompson. "The attachment levels were 40 to 50 per cent, which in anybody’s universe is a phenomenal install basis."

With its excellent voiceover IP and broadband bandwidth capabilities, Xbox Live heralded the advent of a new era for console gaming, stepping into a realm which had until then been firmly reserved for PC gamers.

Support Systems

As Xbox’s popularity soared, an ever-growing number of developers and publishers began to see the benefits of developing games for the console. After an initial struggle to engage the interest of publishers, the Xbox’s positive early unit sales, and the astounding success of titles such as Halo and Microsoft’s drive to support third-party development, began to reel them in.

"Day one, we struggled to get publishers to support us with Xbox,” explains Thompson. "But as we worked with them, changed products and strategies to help them succeed on the platform, they became more pleased to work with us on the platform."

By the end of 2004, Xbox had shifted an impressive 20 million units worldwide and laid down formidable foundations. And with rumours trickling out from Sony that PS2’s successor was suffering from teething trouble, Microsoft now found itself in the unlikely and enviable position of seizing the initiative in the race for next-generation console supremacy...