A key figure in the early days of Xbox was Seamus Blackley, who had the original idea for the console and ended up as director of the X-Box Advanced Technology Team. In the runup to next-gen, Edge magazine is running a series of retrospectives on key console moments, one of which is Microsoft entering the market in the first place. Especially interesting is how Blackley recalls the internal battles over the inclusion or otherwise of Windows.
The story goes that Blackley's team initially sold the Xbox internally by using the Windows operating system. But the intent was never to use it and, when this became clear, there was some screaming and shouting. Blackley picks up the story and, en route, executes an amazing drive-by on Microsoft's corporate culture at the time.
"We absolutely, intentionally hoodwinked [Bill Gates]. And I absolutely, explicitly in writing to him many times said that we were [using Windows] at the time. You know, it's a big risk. If it's successful, he's going to be happy, and if not, then not as happy. But look, the reality is that, again, you need to remember that this is a company that doesn't understand games, let alone consoles. This is a company whose entire worth is based on this Windows operating system—they see the value of a computer as the operating system. OK, now, if you're an internal employee at that company and you want to pitch the value of a new platform, what argument do you use? You use the operating system.
"Now that doesn't mean that, as they think more about it as the project progresses, they don't come to understand it's not true, which is what happened. Windows was really not the value proposition on this any more. They had thought that before: 'Oh, we should make a Windows gaming platform—Windows will offer all these values...' Which is garbage, right? It's garbage, it is not true. No gamer gives a fuck about Windows features. But for the guys in Redmond, it was true. And you're not going to convince them. I mean, have you tried convincing your grandfather of something?
"So you just have to kind of surf it for a little while and swallow your pride and be cool with it until everybody learns enough that they see your argument. Kevin [Bachus] used to call it the Jedi mind trick. Eventually somebody would come back to you with your idea—they would say, 'Hey, you know, this doesn't need Windows at all'. And you have to control your urge to fucking kill them, because you've been telling them that for two years and now they finally come up with it like it's their idea. But that's the Jedi mind trick: 'These are not the droids we're looking for'; 'OK, this is not the operating system we need'. Bravo [applauds]. You're a genius, thank you for thinking of this. We never thought about that—we thought it should be Windows."
The whole piece is worth a read (cup of tea required: it's a biggie), and contains plenty more juicy anecdotes about Gates, Ballmer, and the politickers who try to schnorr their way onto big projects.