Microsoft considered giving away the original Xbox away for free—and even buying Nintendo—as bold strokes to enter the game console market it would eventually come to dominate, together with Sony.
According to a report by gamesindustry.biz, those were just two of the original crazy ideas the software maker considered as Microsoft weighed the launch of the Xbox, which debuted in 2001. At the time, the hardware market was dominated by the Sega Dreamcast and Sony PlayStation. Microsoft’s challenge was to lure game developers to its new platform, and convince gamers that some of the best games would be available to the Microsoft platform.
Oddly enough, however, Microsoft thought at the time that Xbox games would be so-called “casual” titles, rather than the more “hardcore” first-person shooters, like Halo, that would eventually define the console's success. As we now know, phones became the destination for casual games.
Why this matters: It’s always fun to wonder “what if?” when we get a peek into a company’s thinking around a pivotal product. Microsoft was right about needing to lure top-tier game developers to its new console—something it could have done a much better job of with Windows Phone, speaking of phones. Microsoft also managed to make a success of Xbox despite having misread its target market initially.
How Microsoft misread the market
Speaking to Gamesindustry, Oddworld Inhabitants co-founder Lorne Lanning, who created the Abe’s Oddysee series of games, recalled Microsoft's initial focus on casual gaming. “At the time, Xbox thought that the core market was going to be casual,” Lanning said.
Part of Microsoft's strategy at the time, apparently, was to find viable competitors to popular proprietary games, like Nintendo's Super Mario franchise. “They said ‘we think you’ve got something that competes in that Mario space and we think Mario’s the thing to kill," Lanning described.
According to Lanning, it was in the course of those conversations that Microsoft told him it might give away Xboxes for free. Lanning thought it was a great idea. “So now you’re like, ‘look, if you’re going to give the box away, you’re going to win. If you’re going to win, we want to be on board’,” Lanning said.
A ‘Trojan horse’ for Windows
Xbox co-creator Seamus Blackley confirmed that to the site, noting that the console (originally called the DirectXBox) should be free, then transition to running Windows over the life of the console. The console would be a “Trojan horse” for Windows, he claimed.
Blackley even said that Microsoft had to endure “bad ideas” like buying Nintendo as a way to enter the gaming market.
As it turned out, the Xbox never ran Windows, although the Xbox One has drawn closer to Windows with apps like Internet Explorer, and plans to stream games originating on the Xbox One to Windows 10 machines and vice versa.
Reports in the game industry have speculated that the current generation of consoles might be the last. While in the phone space, Microsoft has seemingly de-emphasized pricey phone hardware in place of low-cost Lumia devices running free Microsoft services, a free Xbox console, subsidized by services like game sales and Xbox Live Gold seems unlikely today.
On the other hand, Sony already offers PlayStation Now, which taps into the power of the cloud to allow PlayStation 4 users to play older PS3 games. And Microsoft has already touted the power of its Azure cloud as the brains behind Titanfall, one of the launch titles for the One. Consider marrying the power of Microsoft’s cloud with a cut-rate version of the One with minimal hardware specs. It might not be a free console, but it could be close to it.