Release: Fall 2001

Microsoft, a company that had been involved in PC gaming on both the hardware and software side for years—with popular titles such as Age of Empires, Midtown Madness and Flight Simulator, was brought into the console hardware market when it was hired by Sega to design the operating system for its Dreamcast system.

At the 2000 Game Developers Expo, Microsoft CEO Bill Gates annoucned their own system: the XBox. The system would carry a 733MHz Pentium III processor, an Nvidia graphics chip and an 8GB hard disk. The system is powered by a gaming-specific version of the Windows 2000 kernel.

Discussion following the XBox announcement was plagued with both speculation and personal opinion. Some felt that the XBox would take over the gaming market as Microsoft had done with the PC market. (This notion was met with a mix of praise and fear.) Others saw no future for the system, as North American companies had been unable to break Japan's hold on the console market since the Nintendo Entertainment System. But if any company would have a good chance, it would be Microsoft.

Today the XBox is one of the leading three systems, side-by-side with the Sony PlayStation 2 and the Nintendo GameCube. At this point it isn't clear which companies will ultimately prevail—all seem to be doing well, (except, of course, for Sega, which ducked out of the race in 2001). Microsoft built an impressive piece of gaming hardware, and has signed on a good set of developers to produce games for the system. The XBox was a little slow to catch on a first, mostly due to its high price tag, but with the introduction of the Live! service and an improving library of games, XBox has made its way into the books as a general success.