December 2005. Xbox 360, the worldâs first next-gen console, hits the shelves across the US, Europe and Japan. Expectations are high, but after disastrous sales in Japan and stock shortages elsewhere, what was meant to be a glorious launch turns out to be a PR disaster for Microsoft.
However, despite this major hitch, Microsoftâs embarrassment is considerably lessened by news that even more serious problems blight Sony - forcing the electronics giant to delay PS3 release dates and ensure the 360 enjoys an exclusive next-gen Christmasâ¦
It wasnât long after the 360âs launch that Microsoft made the conscious and somewhat controversial decision to shift its resources to next-gen gaming and all but withdrew its backing for the original Xbox. The effect was compounded by an ever-dwindling list of new releases for the aging machine.
Microsoftâs decision to pull its support from the Xbox market was one that surprised many industry insiders. Kristan Reed, editor of GamesIndustry.biz sister site Eurogamer.net, believes Microsoftâs abandonment of the Xbox was premature. "Sadly, it's pretty much already dead in the minds of most publishers. It's basically being killed off well ahead of time."
Neil Thompson, Microsoftâs senior director for UK home and entertainment, disagrees. "In terms of high-def gaming, we felt that the whole of the consumer movement would move into that era quite quickly," he explains.
"We felt that the high-def era was here. You have to get momentum and an install base very quickly. Being out early and getting early momentum on a platform is very important and itâs very tough if you donât get that.
"Component-wise and technologically, the Xbox was far more advanced than the PS2. At the time we came out, Sony was able to get the price points that we werenât due to the technology weâd built in. As a result, it proved very difficult for us to compete."
With Xbox 360 forging ahead and establishing an early foothold on the next-gen ladder, itâs now Sony and not Microsoft that finds itself having to play catch up. With PS3 having failed to launch in time for Christmas in Europe and with limited stocks in Japan (only 100,000 units were available at the consoleâs weekend launch), a price tag of around Â£450, and with Microsoft securing many previously PlayStation-exclusive franchises (GTA, Pro Evolution Soccer, etc.), the second round of the Xbox/PlayStation battle is already shaping up to be a far more competitive and closely fought contest.
Kristan Reed believes that Sony will still eventually win out due to its massively superior fan base, but only just. "Sony can rely on its native audience to make up the shortfall," he argues.
"I do think, though, that the 360 will have a significant lead through 2007 and most of 2008. I think the crucial period will be Xmas 2008, when it will come down to who has the most compelling exclusive games.
"I think this time around Sony will have far less exclusives than ever, with most publishers now happy to play safe and release their games across as many platforms as possible.â
Gearbox Software president Randy Pitchford backs up Reedâs argument, observing, "It's going to be difficult for Microsoft to get over the power of the Sony brand and their confidence and capability to reach customers with consumer electronics and content.
"To be fair, Sony has challenges of its own. It's going to be very interesting to watch things play out. For my part, I have to consider that all of these platforms are going to have customers that are interested in the games weâre making at Gearbox Software, and I have to make sure that Gearbox remains flexible and agile as this generation unfolds."
Despite an overriding industry belief that Sony will continue to dominate the console market for the foreseeable future (albeit to a far lesser degree than before), Microsoftâs Neil Thompson remains upbeat that the original Xbox has laid down a solid platform for his companyâs drive to become No. 1 in the market.
"The Xbox did a lot for us," he says. "A lot of people were very sceptical about whether weâd be able to be successful and be able to innovate in this business, and whether weâd have any longevity. I think it proved that we can bring phenomenal franchises like Halo and Project Gotham Racing to the platform, plus it helped us win a lot of friends in the publishing community.
"If we hadnât been through those experiences with Xbox V1, we wouldnât be in the position that weâre in now. This Christmas we have over 160 High Definition games from every major publisher in the world, weâve got the premier online gaming service in the world and in America weâve just announced that youâll be able to download movies, TV content, videos etc through Xbox Live.
"All of these innovations only become apparent having gone through a lot of the learning lessons and successes that we had with Xbox V1."
Despite its myriad accomplishments, perhaps the original Xboxâs legacy is yet to be fully unveiled. One thing however is for sure; the machine managed to do what few believed was possible by offering a viable and competitive alternative to Sonyâs all-conquering PlayStation franchise.
It also laid down the foundations upon which Microsoft has been able to quickly build a formidable fan base, one thatâs already looking like swelling yet further with the release of the 360.
PlayStation may have won round one, but half a decade on, itâs looking like the Xbox franchise is in a stronger position than ever. The battle for console gaming supremacy has only just begun.