Ex-Microsoft Exec: Sony's PlayStation Worried Gates, Convinced Him to Make Xbox
February 7, 2013 4:57 PM
comment(s) - last by
Consoles were a second option for Microsoft
Despite the success of the Xbox, that was not Microsoft Corp.'s (
) first choice plan in the gaming space,
interview with a former Microsoft executive. Joachim Kempin, who was VP of Windows Sales at Microsoft for 20 years starting in 1983, says his former employer only decided to build the Xbox after a falling out with Japanese gaming giant Sony Corp. (
I. Sony Console Worried Gates
The original Xbox and its successor, the Xbox 360, had their low points (
red rings of death
, for example), but have established themselves as a popular console gaming option, selling millions of units. The gaming unit is perceived as one of Microsoft's strong performing businesses.
Perhaps predicting both the rise of the console and tablet as replacements/challengers to the traditional PC,
reportedly in the 1990s sounded the alarm when Sony announced the original PlayStation. Seeing Sony jump into the market, Microsoft became determined to beat its former partner, who was turning its back on PC gaming for a non-Microsoft alternative.
Describes Mr. Kempin:
The main reason was to stop Sony. You see, Sony and Microsoft…they never had a very friendly relationship, okay? And this wasn’t because Microsoft didn’t want that.
Sony was always very arm’s length with Microsoft. Yeah, they bought Windows for their PCs but when you really take a hard look at that, they were never Microsoft’s friend... but as soon as they came out with a video console, Microsoft just looked at that and said 'well, we have to beat them, so let’s do our own.
The original PlayStation launched in 1994. Then in 2000 Sony introduced the PlayStation 2, which added PC-like media player functionality and broader support for online gaming on third-party servers. A year later Microsoft countered with the Xbox.
II. Crafting a Console
The payoff of consoles -- by Sony's model, at least -- has traditionally been the licensing fees paid by game publishers. The hardware itself is often sold at-cost, or even
at a modest loss
. For that reason Microsoft had trouble convincing a PC maker to hop onboard the Xbox experiment.
Joachim Kempin, a 20 year veteran of Microsoft is spilling the dirt on the history of the Xbox.
[Image Source: Twitter]
Recalls Mr. Kempin, "I went out to several PC manufacturers and tried to beg them to do the Xbox thing and keep the device manufacturing out of Microsoft. The guys were smart enough not to bite, because they studied the Sony model and saw that Sony could not make money on that hardware model, ever. So they supplemented it with software royalties, and Microsoft copied that model."
As for Xbox profitability, he argues that developers have always been the winners; that Microsoft has managed to break-even, but not do much better than that. He comments, "They’re just maybe a little bit above breakeven, that’s all there is. This is not a big money-making machine for Microsoft."
A former Microsoft exec. claims the Xbox is not a big money-maker for the tech giant.
[Image Source: Gamasutra]
Microsoft is currently diving into a third-generation console, which is expected to launch this holiday season. After trumping Sony in the last generation (dubbed by some as the "seventh-generation") of consoles, there are
some trouble signs
for the upcoming Xbox 720. While the spec looks
somewhat similar to Sony
, Sony's hardware is reportedly slightly more powerful and considerably easier to develop for.
Microsoft also may alienate customers with its stance on used games; reportedly it is tying purchases to your Xbox Live account, as a means of stopping game resale (which it earns no cut from). Sony, while a long time support of strict digital rights management, has not yet announced a similar anti-resale provision.
This article is over a month old, voting and posting comments is disabled
2/8/2013 9:37:49 AM
Once Microsoft releases the new XBOX and it is verified that used games can not be bought for the system, a lot of fans will switch to the Playstation... better yet IOS or Android... if they become serious. I personally don't want to be held down to only buying new games if I don't feel like it. If it's a blockbuster title like Battlefield, Call of Duty, Halo, Gods of War, etc... I'm getting it brand new soon as it ships out the door, but if it's a game I want to try out but don't feel like I'll really get into it, I'll probably buy it used. Its not like it didn't get bought before, someone just didn't appreciate it, and who know's maybe I will.
"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007
Report: Microsoft to Drop the Banner Hammer on Used Games With "Xbox 720"
February 6, 2013, 11:32 AM
Report: Hardware Details of Next-Generation Xbox Leak
January 22, 2013, 9:01 AM
Survey: Xbox 360 has 54.2 Percent Failure, 41.2 Percent Second Failure Rates
August 20, 2009, 12:14 PM
Report: Sony Loses $50 for Each PS3 Sold Today
December 24, 2008, 9:45 AM
Gates on Vista, Xbox 360 and Open Source
November 20, 2006, 8:19 AM
iLate: CEO Tim Cook Says Apple Watch Will Ship in April
January 28, 2015, 3:03 PM
Amazon's Fire Sale on Fire Phone Steps up in UK w/ 1-Day Sale @ $150 Unlocked
January 28, 2015, 11:53 AM
Apple Sees Record Profit of $18 Billion, Sells 74.5 Million iPhones in Q1 FY2015
January 27, 2015, 6:01 PM
Apple Might Miss High-End of Analyst Estimates, Microsoft Earnings Hint
January 27, 2015, 3:14 PM
Microsoft Smartphone Sales Up 28 Percent as Lumia Budget Models Gain Ground
January 27, 2015, 8:30 AM
Quick Note: Special 20th Anniversary PlayStation 4 Raises $128,000 for Charity
January 26, 2015, 4:14 PM
Most Popular Articles
Under the Hood: How DirectX 11.3 and 12 Will Supercharge Windows 10 Gaming
January 23, 2015, 12:34 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
Microsoft Shows Off Latest Windows 10 Build, Preps it for Next Week Release
January 21, 2015, 2:57 PM
Google Fixes Homophobic "Bug" in its Translator
January 27, 2015, 2:31 PM
Will Google Become America's Fifth Major Carrier?
January 22, 2015, 12:42 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information