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How IBM Out-foxed Intel With The Xbox 360

Posted by ryuzaki0 on from the beat-them-to-the-punch dept.

xcaverx writes "Learning from failure is a hallmark of the technology business. Nick Baker, a 37-year-old system architect at Microsoft, knows that well. A British transplant at the software giant's Silicon Valley campus, he went from failed project to failed project in his career. He worked on such dogs as Apple Computer's defunct video card business, 3DO's failed game consoles, a chip startup that screwed up a deal with Nintendo, the never successful WebTV and Microsoft's canceled Ultimate TV satellite TV recorder. But Baker finally has a hot seller with the Xbox 360, Microsoft's video game console launched worldwide last holiday season."

14 of 327 comments (clear)

  1. Ahh, the litany of failure by faloi · · Score: 4, Interesting

    I always chuckle when my company brings on someone that's been directly responsible (at the executive level) for busines decisions in other companies that have failed misserably. Often, they recite all their past experiences, and the only thing I can think of is "Why did we hire them, and how much are we spending?"

    --
    "It is a miracle that curiosity survives formal education." -Albert Einstein
  2. Re:Not so fast Billy Ray... by mikeisme77 · · Score: 3, Interesting
    Considering they also hired Peter Moore to do the marketing for the XBox 360 (who also handled the failed marketing for the failed Dreamcast--although I, personally LOVED the Dreamcast and was sad when it died...) I would say he's probably batting 1,000. You don't take a team of failures and expect them to succeed.

    But yes, I agree it is too early to make a call either way on this. Although if they don't get a killer app on the system before the PS3 & Wii launch (or on the launch dates of the PS3 & Wii) then I think their SOL and will be dead in the water. By that time the 360 will have been out for a year, and if they don't have a killer app after a year then that's definitely not a good sign...

    --
    Read my blog posts on usability.
  3. 'Out-foxed'? No... by Anonymous Coward · · Score: 3, Interesting

    Microsoft went with IBM because they didn't want to get embarrassed by Sony and Nintendo with the uncompetitive chips from Intel and AMD.

    A very senior engineer at NVidia I know is talking more and more about how they see Intel and AMD's x86 chips as dead weight dragging them down and how they would like to make x86 irrelevant by moving all application and OS functionality onto their boards.

    The winners ended up being:

    IBM
    Sony
    Nintendo
    Microsoft

    And the losers ended up being:
    Intel - The big loser in all of this
    AMD - Less so
    Apple - Once IBM won all three console contracts they decided Apple was no longer worth the hassle for only 4% of their chips sales - buh bye!

    If you love sitting around playing with SPEC and Intel's marketing compiler or hangout at aceshardware or other x86 fanboy sites you probably see things differently. Heh.

    But the fact that a company sees there is a viable market for another 2-300 performance add on for x86 gaming systems in the PhysX boards should be as clear an indication as anyone needs to how far x86 is falling behind.

  4. Re:Xbox? by DCstewieG · · Score: 2, Interesting

    Actually, I thought Linux monkeys loved the Xbox! Cheap server, media PC, etc...

  5. Re:Thus just in... by Anonymous Coward · · Score: 1, Interesting

    That would be insightful if it weren't for the sad fact that Apple was only a tiny fraction of the market for PowerPC systems. In case you missed it, all three of the next generation game systems will be powered by PowerPC chips, and combined they are probably going to outsell every PowerPC based Mac ever sold by a factor of 1000 to 1. Add to that the embedded systems market, the high performance and Linux/AIX workstation markets, and I think the title you would want for your followup should be "How IBM suckered Intel into taking on a difficult customer that won't get them much extra revenue".

  6. Re:Outfoxed? by Zemplar · · Score: 2, Interesting

    I'm glad someone else caught that. Goodwill != Market Capitalization, and any such comparison between the two between companies (X Goodwill to Y Market Cap) is meaningless.

  7. Yep by LWATCDR · · Score: 2, Interesting

    I have bought two consoles in the last six months. I tend to use a PC for gaming.
    I got a Gamecube for my wife for Christmas. I was shocked. The games on it are really fun.
    I then got a PS2 so I could play Tourist Trophy. It is pretty nice, I have gotten a few more games for the PS2 and for the GameCube since then. From what I can see the GameCube games are more fun. The PS2 games are better simulations. I thought about picking up an XBox360 but why? None of the games seem that great and it is really expensive.
    I might get one after they have been out for a while and the price has come down, if they have any games I just must have.

    --
    See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
  8. Offtopic? by Manmademan · · Score: 3, Interesting
    Funny story about Web TV- when I used to sell electronics back in the day, the little buggers were practically boomerangs. People would buy them so grandma had something cheap and easy to get online with, but grandma and grandpa would either

    1.) not understand the whole "monthly fee" part of it and return it or

    2.) Get confused anyway, and return it.

    We had stacks, and stacks, and stacks of unsellable returned Web TV's that no one wanted. If Web TV shipped a million units, I'd be amazed if more than half actually stayed in homes once purchased.
    1. Re:Offtopic? by Scoth · · Score: 2, Interesting

      I worked at MindSpring doing tech support during the time they cross-sold WebTV units with MindSpring dialup service, and we all hated those calls with a passion. It was invariably an older person who couldn't set the time on their microwave, much less understand the concept of a web site or e-mail. I think probably 60% of my calls were cut off after the first couple instructions with a determined "I'm taking this thing back!". Was almost amusing. Apparently a lot of people sent them back to MindSpring, and there wasn't anything we could do with them since WebTV wouldn't take them back, we couldn't resell them, and they were useless as geek toys. Incidentally, they make a very satisfying splat from the top of a three-tier parking deck :)

      Somewhat oddly, the Dreamcast calls were almost as bad, though it was because of people trying to surf the web and set it up with just the controller and no keyboard. Waiting while someone keys in "mail.mindspring.com" twice because they mistyped it the first time with the controller was a pain.

  9. What _are_ his successes? by SylvesterTheCat · · Score: 2, Interesting

    OK... I'll bite.

    What _are_ his successes?

  10. XBox versus PS3 by evildogeye · · Score: 2, Interesting

    OK, now that I am in my 30s and I have no clue what is going on in the gaming world, I have a simple question. Should I buy an XBox 360 or is the Playstation 3 going to blow it away? I don't really want two systems, so if the Playstation is going to be vastly more popular, superior, or have a better game selection, I'd rather have that. I would have bought the Xbox 6 months ago, but it wasn't available. Now the playstation will be out soon enough that I am willing to wait. Thanks!

  11. Re:Not so fast Billy Ray... by Anonymous Coward · · Score: 1, Interesting

    The article states that the 360 sold 1.5 million units during the holiday season. You would have to believe that they stopped selling completely in January in order for your numbers to be correct. Where did you get them from?

    dom

  12. Re:well... by Anonymous Coward · · Score: 1, Interesting

    Generally, selling as much as you supply at asking price is considered a success.

    Interestingly enough, one of the reasons most cited for Apple's union to Intel instead of AMD is that AMD has a history of selling out their entire supply of product at asking price. This is considered bad.

  13. Re:Not so fast Billy Ray... by Anonymous Coward · · Score: 1, Interesting

    So far it doesn't look amazing.

    Last time around, in the last six weeks of 2001, Microsoft sold 1.4 million original Xboxes in the U.S. market. This time, it sold 607,000 Xbox 360s in the U.S. On top of that, it sold about 300,000 units in Europe and about 100,000 units in Japan, according to analyst Michael Pachter at Wedbush Morgan. In 2001, production began a few days before Sept. 21, when Microsoft announced the first of its factories began making machines. So, the two factories made on average about 100,000 original Xboxes a week in 2001. This time around, two factories owned by Flextronics and Wistron started production sometime during the fall and managed to ship about 1 million units.

    By comparison, the Nintendo DS sold an estimated 1.22 million units in the U.S. during its first holiday season in 2004. The GameCube sold 1.2 million units in its first season in 2001 in the U.S. And the PlayStation 2 sold 1.1 million units in its first season in 2000. The Sega Dreamcast sold 400,000 units in its first 30 days in 1999. In its first four months, it sold 1.8 million units in the U.S. (The Dreamcast's first holiday season was a long once since it started selling on 9-9-99).