Microsoft’s original efforts in the console market were fairly futile- the original Xbox managed to have an enviable lineup of great games, sure, but they were completely blindsided by the PlayStation 2, Sony’s console that managed to sell an enormous 156 million units worldwide.
Going into the Xbox 360, Microsoft weren’t entirely sure that they would be able to keep up with Sony, if they continued at the pace they had had in the PS2 era- and one of the things Microsoft wanted to do to ensure they would at least have a fighting chance with the Xbox 360 was to launch it earlier.
“The [PS3 launching a] year later didn’t surprise us, we knew we wanted to be first, we chose this date in 2002. We said its a 5-6 year cycle, earliest they’ll launch is 2005, [so] we have to launch by then. Worst case, we have to be at the same time”, former Xbox head Robbie Bach said in an interview with IGN.
But things got a lot more interesting for Xbox once Sony announced the PS3 price- that was the first time Microsoft realized that they may be in with a fighting chance this time around.
“As we got closer, we weren’t surprised PS3 was launching in 2006, just because of the complexity of the Cell, that didn’t surprise us. The single moment we knew we had real upside was when they announced the pricing at E3, I mean that was a total shock. We knew the product was too expensive, but we thought they’d suck it up. They wouldn’t let us in for the presentation, and that’s the way E3 works, so that’s fine, so were watching it on some feed I don’t know what it was and then Kaz said the price.
“And the room we were in went silent, and we think “Did he really say what I think he said?” and so we started contacting people who were at the Sony stage to get confirmation that the price was actually real, a lot of actually said in our minds “Oh…this could be really fun.” When you have 20% market share and they have 60% you never think you’ve won, but I did say we have a real chance, if we push hard we can make a difference,” Bach said.
Sony’s stumbles with the PlayStation 3, and Microsoft’s singular focus with the Xbox 360 caused Microsoft to dominate that generation- for a very long time, the Xbox 360 led in sales, and until the very end, it was the go to development standard for all third party games. Multiplatform games would look and sell better on the Xbox 360, and the console was influential enough that it continues to be the forebear of all modern game consoles ever since.
It’s so interesting to think that none of this might have happened, had Sony not priced the PS3 $599.