Word: xboxes
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Dates: during 2000-2009
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Even more than that, this is a story about a stealthy technological revolution that has taken place over the past five years, with very little fanfare, and is turning the U.S. living room into a digital, wireless, networked nerve center. You may think the Xbox 360 is a game machine--a toy--but if it does what it's supposed to, it will change the way you consume music, movies, photographs and TV. It might even transform your social life...
Bill Gates would really like a piece of your nerve center. He's bet billions of dollars that the Xbox will get it for him, and hasn't seen one thin dime of profit yet. True, since it launched in November 2001, the Xbox has sold 20 million units, earning it a comfortable, if distant, second place to Sony's PlayStation 2 in the North American market. But the game-console business is a peculiar one: you have to spend a bundle on promotions, and you lose cash on every box you sell, hoping to make it all back...
...certainly is. But insane as it sounds, that is all according to the master plan. The whole point of doing the first Xbox was to have a shot at making money next time around. "The first generation, it's just like a video game," Gates says. "If you play perfectly, at the end it says, 'You get to play again.' That's all it says!" He's cracking himself up. He has a surprisingly infectious laugh. "You put your hand in the till. There's no quarter down there. There's no, like, even tickets to buy funny dolls...
...goes well, the Xbox 360 will be out around Thanksgiving; Sony and Nintendo are expected to follow with consoles of their own in 2006. TIME got exclusive behind-the-scenes access to the minds and the strategy that built the new Xbox. Welcome to the future...
...Xbox headquarters is a surprisingly unimpressive place, a generic office park in Redmond, Wash., across the road from a large gravel pit. Microsoft's inspiring name for this low-rent nerd farm is the Millennium campus, and it's where the company's money-losing projects live. Not for them the manicured lawns and sculpted berms and softball fields and fancy cafeterias of Microsoft's main campus. They get the gravel...