Risks and Rewards - The Story of the Xbox
If you didn't know, today the Xbox turned 10.
The Venture Beat has a great Part 1 and Part 2 of the origin of the Xbox. It's a great read. There's some interesting things in there. There's even an interesting part about Steve Ballmer yelling "Xbox Live!" and breaking a conference phone in front of Peter Moore (Head of EA).
There's a bigger story here. It's really about the risks that tech companies face and how they deal with them. Its about how people are managed and the conflicts and disagreements they face. Sometimes, we the average consumer think that Company X should just do X and do that without realizing the implications and risks that they take.
The Xbox lost $4 billion and were losing to Sony with their first generation console. Imagine if you're the head of a company and found out that you were losing $4 billion and weren't making profits off your product. I imagine most people would cancel the product there and then to prevent further losses. Imagine if Microsoft had cancelled the Xbox and not gone further. There would be no Halo, one of the biggest video games in history. No Xbox Live.
We the public think that company X needs to do A, B and C to compete but we fail to see long term of things. Some of us would have cancelled the Xbox before it became successful. We would have cancelled the iPod because some of us would felt like competing with Sony and their walkman was suicide. Maybe even Android would be cancelled....
I think there's a problem with risk taking and innovation. We all say we want companies to innovate and try new things. But when we do, we trash those new innovations brand them as "fail" and not appreciate that at least that company was trying something new.
I like what Google does. They throw a lot of things at the wall till one of their ideas stick. Who thought that Android would competing today as it is. The previous Android versions were not the best but going forward, we can see that Google is trying to perfect their product with Ice Cream Sandwich.
I get confused when Paul says Bing sucks and is a terrible product. Its not terrible, its Microsoft trying something new and different with its approach to search. Microsoft has something there and you can see that they are putting the Bing product in different areas such as Windows Phone, the Xbox 360 and even some Ford vehicles with Bing Maps.
Coming up with an "innovative" product is not as easy as you may think. I know that first hand because I have been in teams where we had to come up with new products to sell. There's a lot of frustration and hard work that go into new products. They may not be readily accepted in the mass market but that's when you go back to the drawing board and figure out what to improve upon.
Back to the Xbox, its interesting to see how far its come. The Xbox was losing billions of dollars and now its profiting billions of dollars and has put Microsoft into the living room where the chance to expand is huge. Live TV, Kinect and all those innovations is big for Microsoft.
There will always be risks and rewards. Companies face that. Some take the plunge and lose big while others succeed. We should be applauding companies for taking risks instead of condemning them as fail.
New innovations are around the corner and I'm excited to try them out.
Happy birthday Xbox.
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