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It’s a-Live!Īrguably the most important event in the evolution of the Xbox and the growth of Microsoft’s place in the gaming industry occurred on the console’s first birthday with the launch of Xbox Live. It also enabled the Xbox to outsell the just-released Nintendo GameCube in the years that followed, further establishing the Xbox as a force to be reckoned with in the console wars.
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While the dramatic reduction in price made it nearly impossible for the company to earn any profit whatsoever from sales of the system, the move succeeded in encouraging more households to bring home an Xbox. On April 18, 2002, Microsoft slashed the price of the Xbox from $299 to $199. The high cost of manufacturing the Xbox didn’t do its creator any favors, making the next big event in the system’s timeline even more surprising. While the Xbox seemingly sold well in North America, the overall launch proved troubling for Microsoft, whose expectations for the system were lofty by any console’s standards – let alone a brand-new system. In Japan, only 123,000 Xbox units sold in the first week of release, validating Microsoft’s fear that the system would have a tough time breaking into the notoriously difficult overseas marketplace. Xbox release dates in Japan (February 22, 2002) and Europe (March 14, 2002) soon followed, though the system failed to catch fire in either of the two regions with the same energy that fueled its arrival in North America. It might not seem like much by today’s standards, but hitting the million-units mark back then was unheard of. Sales of Halo shattered all previous records, with more than 1 million copies of the game sold in the first few months of its release. One key component to the console’s success was the popularity of its flagship game, Halo, which offered the one-two punch of being both exclusive to the Xbox and one of the first-person shooter genre’s most compelling, groundbreaking titles to hit shelves in years. Concerns regarding the system’s look and design, as well as the $299 price tag, fell by the wayside with over 1 million Xbox consoles flying off shelves in the next three weeks. On November 14, the Times Square branch of Toys ‘R’ Us played host to the official launch of the Xbox, with Bill Gates dropping by to kick off his company’s grand experiment in gaming.
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Nearly a full year later, Bill Gates, with help from Dwayne “The Rock” Johnson, revealed the final design of the Xbox at the 2001 Consumer Electronics Show in Las Vegas, along with the system’s official release date. This was the move that helped make history. Microsoft’s $30 million purchase of Bungie a short time later made headlines in the game industry, but it was Bungie’s decision to adapt Halo to make the best use of the new console’s abilities and turn it into a first-person shooter.
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It was there that the Xbox developer first connected with Bungie Studios, the creators of a third-person shooter Halo: Combat Evolved. Microsoft continued to push the envelope on both the console and its marketing budget with more demonstrations at the Electronic Entertainment Expo a few months later.
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Many still remained skeptical of what they saw, seeing nothing more than a fancy PC dressed up as a gaming console.
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Teasing the system’s vastly improved specs and the potential for both online play and internal storage of downloaded content - games and media – Gates managed to get the world’s attention. Just two years later, Microsoft was ready to go public with its console, and that’s exactly what Bill Gates did at the Game Developers Conference in 2000.