Former Microsoft exec says it launched Xbox "to stop Sony"

The original Xbox game console was launched in the fall of 2001, but why did Microsoft want to enter the game console business in the first place? A former Microsoft executive, who recently wrote a book that slammed Microsoft's CEO Steve Ballmer, says in a new interview that the main reason the company went into the game console industry was to take down a rival: Sony.

IGN reports that in an interview with former Microsoft VP Joachim Kempin, he states: "The main reason was to stop Sony. You see, Sony and Microsoft…they never had a very friendly relationship, okay?"

While Microsoft had apparently wanted to partner up with Sony, the Japanese company always seemed to keep Microsoft at arm's length. When Sony launched the first Playstation, Kempin stated that "Microsoft just looked at that and said 'well, we have to beat them, so let’s do our own.'"

Kempin also claims that while he was at Microsoft, he went to its many PC OEM partners and asked them to make the first Xbox. However, he said, "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." Microsoft decided to copy Sony's business model for the Xbox; make the hardware themselves, sell it at a loss and make it up with game royalties.

Source: IGN | Image via Microsoft

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21 Comments

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1) Sony and Microsoft are not friendly? Really. I think the person shooting this off forgets that Sony has been a major supporter of Windows, and to this day sells PCs with Windows. Microsoft and Sony have a good OEM relationship in 'spite' of the console competition.

2) Microsoft DID go to PC MFR to produce the Xbox, as I have stated several times before. It wasn't Microsoft's intent to make and continue to make the Xbox as they only wanted PC Makers to build a PC class/level gaming console to offer portability and parity from the PC. **

Microsoft was hoping that MFRs would pick up the XBox even after they knew they would be developing the initial version themselves.
(Just like Microsoft did with many technologies to get them jumpstarted, and is what they are doing with the Surface, to shove the quality level up. As long as OEMs take the place of Surface, Microsoft will no longer need to create their own design reference product.)

**A PC designed system was far faster and more capable than consoles when the Xbox was being designed. The PS2 was technically behind the Xbox and would have been more behind if Sony wasn't trying to compete with the Xbox.

This story sounds like nonsense to me , as poster above says just someone trying to get some attention. I assume Microsoft started the xbox because they knew there was huge big piles of money to be made .

Just like most everything this guy says, I have to call nonsense... Before the XBox, they weren't rivals... Just a silly exec looking for attention.

Depends on exactly what it is they wanted to stop. If they wanted to stop Sony from dominating the console gaming market, having no presence to where they are today, they succeeded and probably exceeded expectations. If they wanted to stop Sony's PS brand from becoming the de facto media hub in the home, they succeeded.

Obviously if they wanted to stop Sony from being one of the top 3 major console players, they failed. They also failed to stop Blu-ray. Does anyone even remember HD-DVD?

I don't think anyone is saying Xbox failed. This story discusses "stopping" Sony. The failure comments are addressing that, whether or not they succeeded or failed at stopping Sony. It depends on specifically what it is they wanted to stop as to whether or not they succeeded for "failed" at stopping Sony.

Lprd2007 said,
Failed? The XBOX is undeniably a success.

"You see, Sony and Microsoft…they never had a very friendly relationship, okay?"

that explains everything - if it's about two dudes after a bunch of scotches and in a back alley; what really happened i think goes like this: "we want more money - movies? - nah, the game industry slowly outgrows hollywood - oh yeah, the game industry!!!"

this must be an EXCEPTIONALLY badly written and juvenie book...

"Microsoft just looked at that and said 'well, we have to beat them, so let's do our own."

well actually the same thing happened between Ford and Ferrari what resulted in the GT40...

There's no evidence of anything about MS and Sony ever having any ideas to work together on a gaming platform. Whereas a number of MS employees related to this have openly said that the original Xbox wasn't to be "the best" but rather "to get into the industry".

Also, in other departments, MS and Sony have functioned very well together for decades.

so that why MS now want to enforce "First Hand Sales Doctrine" breach,
and "Always On" even for non-multiplayer games.

$3 Billion loss in 10 years sure start to take its toll...

First: you seem to have no understanding of the term "sunk costs".

Second: I like the way you treat a RUMOUR (one that's also been going around for the Sony PS4 at that!) as fact.

isnt that what happens in every single industry? whats so newsworthy? this guy should just shut up already. we know he has a book to sell so he's looking for controversy,but if this is the kind of stuff that's in his book then he wont sell very many.