THE TEENAGE BOY IN THE blue sweater raises his fist and cries a single word: "Mario!" Elsewhere, two more teenagers, a boy and a girl wearing white sweaters, chanted and fist-pumped with him. More joined in: Boys and girls ranging in age from pre-teens to old enough to drive, all dressed in blue or white or black or red, all pumping their fists and invoking a single name. "Mario! Mario!"

A camera pulls back, showing crowds of hundreds, thousands, hundreds of thousands, millions. "Mario! Mario! Mario! Mario!" The crowd shrinks as the camera soars, reduced to the size of ants, then single-colored dots until, far above the clouds, all of those people-dots meld into the face of a wide-eyed, brightly smiling plumber-turned-hero, his visage stretching around the globe.

If Mario was the deity being summoned, Don Coyner was the leader who organized the worldwide demonstration. Coyner worked for ad agencies until he got a call from a recruiter asking if he would be interested in working for Nintendo of America. He was inclined to say no, for two reasons. First, Nintendo was based in Redmond, Washington. Coyner and his family lived in Chicago and had no interest in going west. Second, he knew nothing about video games.

Still, he did his due diligence and went to the library to research the company. He came away impressed. It was a small operation, approximately 800 employees based in the American branch--600 of whom worked in phone support helping customers with technical issues and answering esoteric questions about cheat codes and strategies--and 2,000 worldwide. Nintendo of America needed a skilled market to run its advertising, packaging, branding, and research operations.

Coyner started out building and running campaigns for General Mills cereals such as Cinnamon Toast Crunch and Golden Grahams. Since 1984, he'd worked at the marketing firm in charge of brands like Kraft Macaroni & Cheese and Kimberly Clark, maker of Cottonelle, Scott toilet paper, and Kleenex. Mac and cheese and sugary cereals were a far cry from video games, yet the opportunity to try his hand at something new appealed to him. He interviewed, got the job, and moved the family to Seattle in 1988.

Upon setting foot in Nintendo of America, he realized he was working in a giant warehouse. The main floor was cavernous and full of huge crates holding arcade games like Donkey Kong. Trucks would pull up to bays along one wall and workers unloaded shipments of coin-op games and cartridges for the Nintendo Entertainment System from Nintendo Company Limited (NCL), the headquarters in Kyoto, Japan. Minoru Arakawa, president of the American office, worked in a small office. Upstairs, employees ran phone banks.

"We had 100 people out in the field doing research merchandizing, but in terms of core leadership, I had a boss, there was a PR person, and a merchandizing guy who had two or three people," Coyner says of the early days at NOA. "It was a small company, so we all wore a lot of hats and did a lot of things. The company was very focused and the leadership was great. Mr. Arakawa and [legal counsel] Howard Lincoln let people do their jobs."

Nintendo of America's primary function was to take the games made by the development teams at NCL and devise ways to market them to American audiences. One of Coyner's first projects as marketing manager was filming and releasing a commercial for Super Mario Bros. 3, the eagerly expected platform-action game due for release on the NES in 1989. He came up with the idea for kids around the globe chanting for Nintendo's leading man and pulling the camera back to show their groups that formed Mario's face. Coyner and his team had to get creative. There were only 100 kids on hand, so they would dress them in different outfits and shuffle their groups between shots.

The visual of Mario spanning the globe was apt. By June 1989, Nintendo owned 80 percent of the video game market in North America, bringing it back from the dead following the market's crash six years earlier. Their market share would only get bigger. Another of Coyner's early project was mapping out a release strategy for the launch of the Game Boy. That spring, Mr. Arakawa had entered Coyner's office and handed him one of the chunky handhelds, explaining it would be released that Christmas.

Coyner's brow furrowed. "That's a really bad name," he said.

"What do you mean?" Mr. Arakawa asked.

"Well," Coyner said, "it feels really young. It seems a little bit sexist and it just sounds Japanese."

Mr. Arakawa looked thoughtful. "Hmm," he said, a typical response from him that meant, Perhaps, but I don't think so. "We're not going to change the name," he said a moment later.

Determined to do his best with what he had, Coyner examined the Game Boy. The handheld had a lot going for it: affordable at $89.95, portable, and rudimentary but serviceable graphics. The best thing about it, though, was the nature of playing on a portable system versus a console tethered to a TV. He could play Tetris for a few minutes, put it down, and return to it later.

Coyner and Mr. Arakawa talked budget. Mr. Arakawa proposed $20 million. Coyner thought that absurdly high, but Mr. Arakawa insisted. That surprised Coyner. Nintendo of America had a long streak of frugality. For this product, Mr. Arakawa wanted a massive advertising campaign that would generate so much demand that it would outnumber the company's available units for Christmas. Creating artificial scarcity would fuel demand even further. Japan had already sold two million units, and Game Boy was becoming a constant presence in Nintendo of America's building, with secretaries playing during lunch hours.

Coyner got to work. By October 1989, Mr. Arakawa's wish for huge demand had come true. A report in the Wall Street Journal featured quotes from executives at Toys "R" Us and other toy and electronics retailers, who painted Game Boy as the must-have item on every kid's wishlist. Nintendo had one million Game Boys for the holiday season and sold through the entire stock. The demand was centered on one title: Tetris, the line-eliminating puzzle game that was sold as a pack-in title with Game Boy.

As Nintendo eyed 16-bit consoles, Sega, its chief competitor, cut into its share of the North American market by developing games for teens and adults who felt Nintendo's hardware was a mere toy. Coyner responded with "Play It Loud," a 10-million-dollar advertising campaign ran by marketing firm Leo Burnett U.S.A. that represented a dramatic shift for Nintendo. Instead of taking the company's usual approach to marketing by focusing on games, "Play It Loud" commercials featured teens in hip clothing and playing games like Midway and Acclaim's Mortal Kombat II and Rare's Donkey Kong Country. Each commercial ended with a teen screaming "Play it loud," a counter to the bark of "SEGA!" used in commercials for Genesis games.

Coyner appreciated the challenge of the "Play It Loud" campaign because it forced him—and Nintendo at large—to rethink how they spoke to the growing audience of gaming fans. "The fun thing about marketing to gamers, the hardcore crowd in particular, is they're so smart, opinionated, and vocal, that you can't get away with anything. They call you out on stuff that isn't authentic. I learned really quickly that we should show a lot of footage, talk about the games in a compelling way, don't put a ton of storyline in advertising, and then get out of the way."

Typically, Coyner aimed campaigns at 9-to-14-year-old boys. For "Play It Loud," he ratcheted up the company's target demo to boys ages 12 through 17. "You target the 14-year-old who will bring along the nine-year-old," he explains, "because if the 14-year-old loves it, the little brother will too. But if you target the nine-year-old, his older brother will say, 'That's my little brother's thing. I don't like it.'"

In 1995, with Nintendo's Ultra 64 console still over a year away, Coyner accepted a job from Microsoft. He joined the hardware group as a marketer and came up with ways to sell peripherals like mice and. Four years and many marketing campaigns later, a couple of guys from the DirectX group entered his office and asked for his help getting a new venture off the ground.

"Seamus Blackley and Kevin Bachus showed up on my office one day and introduced themselves," Coyner says. "They said, 'We think Microsoft should make a video game console. We have all the pieces and capabilities to do that, but we need to convince leadership that's a good idea."

Coyner immediately understood why Blackley and Bachus had approached both him and Jennifer Booth, who'd helped Sony market the original PlayStation. Coyner and Bridges knew the video game market. Coyner agreed with a mixture of tingly excitement and nerves. "The emotional part of me said, 'Hell yeah. It would be a blast to launch a console again. It'll be so much fun.' From a practical point of view, I said, 'Ugh. This is going to cost a fortune. These guys have no idea how much this is going to cost.'"

His concern was that Microsoft would balk at the cost needed for Microsoft to elbow itself into a conversation dominated by Sony, Nintendo, and Sega. At Nintendo, he'd commanded as much as $60 million in campaigns. Microsoft had a history in publishing games, but publishing cost less than manufacturing, marketing, and distributing hardware on top of costs associated with software.

"Historically, this was not in Microsoft's wheelhouse to have people capable of doing this kind of stuff," Coyner explains. "Sure, you've built some mice and keyboards, but does that mean you can make a console? Sure, you make Flight Simulator, but does that mean you can build a killer game? Sure, you made Windows, but can you make a console operating system? Sure, you market Office, but can you market a video game to a totally different group of people?"

Coyner threw in with Blackley and Bachus in the spring of 1999. While the rest of the group deliberated over what hardware to use and fought off the WebTV group's own plans for a console, Coyner and his marketers threw themselves into the daunting task of approaching third-party developers to learn what they wanted and expected from a video game platform made by Microsoft. "I would support meetings with third parties, but I wasn't driving them. In the beginning, it was more: Get the meeting. They would all happily take a meeting with Microsoft; that name opened a lot of doors."

Most third-party studios explained their situation in similar terms. Activision, Take-Two, Ubisoft, and others supported platforms from Sega, Sony, and Nintendo. Creating a version of each game for an additional platform would mean more work and more resources, and the studios would need to meet a minimum threshold of sales to justify developing more games for that platform. How did Microsoft plan to create such a platform?

Coyner went into each meeting prepared. "We had to build credibility and tell the whole story of, here's how we're thinking about it, here's the commitment we're making as a first-party to help drive sales. Marketing spend was a huge part of it." Publishers needed to hear those big numbers and the projects connected to them. Console manufacturers need a strong lineup of first-party software to attract customers, but publishers have to be attracted, too. Investment in first-party games showed publishers that a manufacture was out to win.

"We were going to launch with $20 million," continues Coyner. "This business is year-round. Mostly fourth quarter, but in terms of support, you've got to support it year-round. We would sell enough units that it was worth their time to create a title, ideally for launch. That's a big deal, to have a portfolio with over three games when you launch."

Many publishers remained skeptical. Microsoft seemed out of its depth, but they and Coyner knew why supporting Microsoft would be in their best interest. "The one thing that helped us is both third-party publishers and retailers looked at it as, 'If there's another player, that gives us more leverage, because now we can go back to Sony and tell them to fuck off.' Nintendo was the one everybody from third parties hated because they were kind of assholes," adds Coyner, referring to Nintendo's Draconian guidelines such as buying cartridges directly from them and limiting the number of games publishers could release per year.

Approaching retailers required other strategies, although the aim remained the same: Show Microsoft's willingness to commit to the market. Coyner and other marketers made the rounds to chains such as K*B Toys, Walmart, Target, and Toys "R" Us, the last of which was a make-or-break retail partner. In 1999, it was the number-two retailer for video games, a position owed in part to John Sullivan.

Sullivan joined Toys "R" Us in 1982 as a store manager. He climbed the ladder from there, serving as regional inventory control manager of the southeast Atlanta market and corporate buyer for many categories, including video games. As usual, Coyner secured a meeting with Sullivan and other senior executives easily. He went into the meeting with a list of questions to glean information such as the margin Toys "R" Us would claim on sales of hardware, peripherals like controllers and memory cards, and software.

"Sometimes you weren't sure if they were really telling you the truth," Coyner admits of retailers. "They might say, 'We make two percent on hardware. We need to make at least seven.' Do you think they're really making two percent? Maybe they're making six. That's why talking to a bunch of them was helpful. You could triangulate around what they were telling you."

Coyner's questions were myriad. How does the business work? How would Microsoft go about securing shelf space? What sorts of displays worked best? Coyner knew most of these answers. The trick was to play dumb. "There were two or three of us who did that, and the other two were dumb--not in terms of being people, but they knew nothing about this business. They could ask all these questions and have no clue, but having worked in games and understanding it, I knew generally what the numbers would be from Nintendo, anyway. I didn't know what Sony had, but they were pretty close."

Most importantly, Coyner understood that Toys "R" Us and every retailer's foremost goal was to achieve their sales plans. The second priority was to keep inventories updated. Too much or too little required adjustments to the sales plan that would cause ripples throughout divisions and stores.

Some retailers were more interested in working with Microsoft than others. Stores like Best Buy, Target, and Walmart sold thousands of copies of Windows and Office. Toy stores were a tougher sell. Sony, Sega, and Nintendo were established. Securing a partnership with one would force the others to join up: No chain wanted a competitor to gain an advantage by carrying exclusive goods.

Toys "R" Us proved amenable thanks to a recent, and quite odd, partnership. In 1997, Microsoft announced ActiMates, a line of dolls that talked and sang to preschool-aged children to make learning fun. Released in 1997, the first doll resembled Barney, the purple talking dinosaur that was all the rage among tots. Barney boasted a 2,000-word vocabulary, and could sing songs, react to events on ActiMates-branded VHS tapes when connected to a VCR, and play educational games. A year later, Microsoft followed up with Arthur, a bespectacled, anthropomorphic aardvark, and his sister, D.W. who had vocabularies twice as large as Barney's.

Microsoft and Toys "R" Us sold through ActiMates, and both parties confessed surprise at how well the product had done. Even so, video games was a separate industry. "Other than that," Coyner recalls of ActiMates, "Toys 'R' Us did not buy Microsoft products, so that was a new relationship to establish. Electronics Boutique, GameStop, Babbage's, all those guys might have sold PC games, so there was some relationship there. It was building credibility and managing expectations."

As Microsoft established credibility, Coyner probed deeper, asking when retailers would need Xbox hardware and software to ensure they didn't miss out on sales during the platform's first Christmas season. "The first week of September was incredibly predictive of Christmas. You could map the numbers to an amazing degree by what was happening early in the fall."

Retailers also wanted to know about Microsoft's relationships with third-party manufacturers like MadCatz, makers of joysticks and controllers. In video games, as in other industries, proprietary gear like the official Xbox controller--in whatever shape that ended up taking--would earn retailers a smaller slice of profit margins. Third-party hardware earned them more.

Above all, retailers stressed, products must come in on time. Retailers rearrange merchandise--a process known as a shelf reset--before special events such as holidays. Most performed shelf resets in August to be ready for Halloween and Christmas. As retailers signed on with Microsoft, they let Coyner and other members of the marketing team know they would need Xbox and all peripherals and games planned for launch before their final shelf reset of the year. Once displays and shelves were set, they would not take kindly to having to move things around to make room for latecomers.

Delays must be avoided at all costs. " When you screw up, that's a disaster. It's a disaster," Coyner repeats for emphasis. "Meeting those dates was so critical. You can't be screwing around resetting shelves. It's not what you want to be doing. You have no time to focus on that stuff that time of year."

Numbers concretized as Xbox hardware and software came together. Industry events were opportunities to show upcoming products to press, who would write about them and drive interest among players. Those players would then contact their local electronics or toy store to ask about merchandise.

"That's why the E3 showing, and Halo, the belief it would be amazing--all this stuff, they had to believe," Coyner explains. "They'd say, to paraphrase, 'It's going to be a pain in the ass dealing with you guys, so you'd better make it worth our while.' We'd tell them how much we planned to spend on marketing and they'd say, 'Really? Are you actually going to spend that much?' We'd have to go through the media plans and all that stuff. It was a lot of, 'Prove it. Prove it.'"

Ultimately, there was only one way to prove to retailers that Microsoft was serious about the console business. They needed to show off the goods.

BEFORE APPROACHING POTENTIAL PARTNERS IN publishing and retail, the marketing team put together a pitch deck detailing Microsoft's goals, cost analysis, and other factors and information they would need in negotiations. Reaching out to retailers and publishers covered two of the marketing team's three pillars.

"The third thing I looked at was the brand," says Don Coyner. "How would Microsoft play in the gaming category? Would it be the Microsoft-fu or was it the fu without Microsoft? What are the good aspects of that? And what do we call this thing?"

Retailers and publishers would need more to go on than a vague assurance that Microsoft would build a console. So did Coyner and the rest of the marketing pros. Throughout 1999, everything about the console was in a state of flux. "In the first proposal, the idea was to make a purpose-built hardware set for games using DirectX," says Xbox co-creator Seamus Blackley. "We were going to build a hardware box to run DirectX--it's a DirectXbox. Then it was DirectX console. DirectXbox got shortened to Xbox."

Nobody considered Xbox the final name. Like every other product in technology, the game console started life under a codename. "It was virtually unheard of to call a product by its codename," Coyner says. "We needed to look at names, and I had the responsibility of finalizing the name choice and doing all the brand work around how we present that and how it shows up, what's the story behind Xbox, and all that stuff."

Over meetings and informal conversations, nearly everyone pitched ideas for a final name. Coyner ended up with a list that collected hundreds of ideas, some more brain fart than brainstorm. Among other candidates, ones that struck Coyner as particularly ludicrous included Xanatic, Kore, Xybica, Kropolis, G-Force, Bungee, Vereon, 5thDimension, NTR-ACT, 8thWonder, Houdini, FuelPort, MVPC (short for Microsoft Virtual Play Center), E2 (Extreme Experience), 3-Six-O, and The Realm.

"We had a bunch of really terrible names," Coyner admits. "The X-Files was on, but we didn't want to overplay, 'Is everything X? Will we be a flash in the pan?' On the other hand, it connoted mystery."

Marketing teams at billion-dollar-companies rarely have the pleasure of deciding on a product's name themselves. Instead, Coyner did what any other company would do and arranged blind tests. "What if there was a new game console and it was called this?" Coyner and other marketers would ask them. Predictably, test groups scoffed at names like X-filiator and X-Machine. One selection inspired positive reactions.

"We always included Xbox in the list," Coyner recalls. "The reaction to Xbox was, 'It's pretty good. It's short, memorable. X means mystery, box means a physical thing. That could work.' It didn't seem too cool or like it was trying too hard."

Blackley, Kevin Bachus, Coyner, and others remember the Xbox name standing out long before it became official. "One of the usual suspects in this story that people are critical of is a political guy ran into a meeting and said, 'Guys! We'll just call it Xbox!' and almost got murdered for being such an asshole," Blackley says. "It was obvious to everyone that that's what the name was anyway, but he was trying to take credit for it."

Another debate broke out over the brand's spelling. Should it be Xbox? Or XBox? Or X-Box? Maybe XBOX in all caps? Coyner squashed the argument quickly. "I said, 'No. Capital X, capital B looks terrible.' I still see it occasionally and it grates on me. We formalized that fairly early on because people were writing it all sorts of ways. We didn't want to put equal emphasis on 'X' and 'box.' It was 'Xbox.' At Microsoft, people have opinions on all kinds of stuff. I had to argue with everyone about everything."

Blind tests to gauge consumers' reaction to branding was only one type of focus group Coyner and others conducted. They traveled to from country to country and met with potential customers who had no idea they were talking with senior managers from the world's biggest software company. "Imagine a company other than Sega, Sony, and Nintendo wanted to make a console," the marketer would ask. "I'd love to get your feedback on whether you would purchase it." Then they would suggest companies that might be behind the console to determine how consumers reacted. The marketing team drew from a list of heavy hitters ranging from Hewlett-Packard and Dell to Apple and, of course, Microsoft.

The notion that Apple would enter the video game market garnered reactions of disbelief; it had no history in games. Dell received a similar reaction: It could build and ship a console, but, again, it knew nothing about video games. At mention of Microsoft, testers paused. "We'd let them mull it over a bit," Coyner explains, "and they'd say, 'Well, I guess they have PC games that are pretty good. It's a good company.' We'd say, 'Okay, if those are the bad things, what are the good aspects? Do you think they could bring anything of value?' The answer was typically, 'Well, they stand by their products.'"

Microsoft's history of support inspired confidence. The business and legal worlds were up in arms over the antitrust lawsuit leveled at the Windows company, but the average consumer cared little about that verdict. They knew Windows, and Office, and the updates Microsoft rolled out to support those and other products. "They'd say, 'Microsoft has a lot of money. They'd probably stick with it. Their tech would probably work. It might blue-screen, but they seem pretty smart. I think if there was ever anything with Internet, it would be really good, because Microsoft really understands the Internet,'" Coyner continues.

As tests continued, Coyner and the marketers contemplated brand attributes they could thread into conversations to help test subjects conjure an image--not of the Xbox, which was still being designed, but of what the box would represent. "This whole idea of power, a console would be powerful--we wanted something targeted at hardcore gamers," Coyner says. "We said, 'We need to prove ourselves to that group. We can't walk into this thinking we'll get the casual gamers and build from there. If we don't get the hardest of hardcore to say good things, then we're screwed.'"

At Nintendo, Coyner knew the answer would be games. When players thought of Game Boy, they thought of Tetris. When they thought of Super Nintendo, they thought of The Legend of Zelda: A Link to the Past, Super Metroid, and Super Mario World. Unfortunately, while Ed Fries was busy signing developers like Bungie and getting Microsoft's internal teams up to speed, no game had progressed far enough for Coyner to point to it as an indicator of the gaming experience Xbox would offer.

"We were all terrified," he admits. "Microsoft didn't really understand that this was a games business, not a hardware business. If you don't have good content, nobody gives a shit. Look at Game Boy. The tech was terrible, but Nintendo couldn't make them fast enough. It was at an amazing price point, and it came with Tetris. We asked, 'How do we tell a story that's focused on content, but they believe the hardware is capable?'"

Then Halo came along. Coyner took one look at an early version and knew he had his tent-pole game. "That really solidified what we were trying to do: Having a piece of content that was clearly targeted at and appealing to hardcore gamers," he says. "When you're marketing Mario, it's not that 20-year-olds don't love it, but the theme of those games is simple and happy. Marketing Halo is a different kettle of fish. We'd continue the same thing: 16-year-olds can inspire upwards to the 20-somethings, and aspiration is a big part of the story we wanted to tell. You want to shoot high in terms of advertising content."

Coloring made up another part of branding. Horace Luke worked in Microsoft's industrial design division and made his mark by envisioning bold aesthetics for products. Once, the hardware group conducted a competition to see who could make the best model cars. That was how the hardware team operated: They'd design their own inventions just for fun, and to show off to one another.

In need of a color scheme for Xbox, Seamus Blackley paid a visit to Luke and finding him at his desk, drawing with a set of markers with flexible brush tips. The tips were soft foam, allowing artists to get lines of variable thickness. Luke's set had included dozens of colors, but other engineers had swiped them one or two at a time. When Luke sat down to sketch concept art for Xbox, he was forced to work with the few colors remaining.

"Aside from blue, which was Sony's color, the only other colors were a couple of greens, so Horace just started sketching everything in green," says Blackley. I was sitting there and I remember him sketching with the pen. He was drawing different Xboxes. That conversation led to the big, silver Xs, the X logo--all of it."

Don Coyner remembered another chapter from the story of Xbox's black-and-green color scheme. "There's a wonderful legend going around that's probably true. This guy, Horace Luke, was a designer and an early person in the organization. He said, 'I had a green pen in my pocket and just started drawing,' and that's why Xbox ended up adopting green. Okay, maybe he had a green pen, and maybe he didn't. For me, it was a more methodical approach."

Coyner applied logic and deduction. Sony's PlayStation 2 came in a big, blue box. Nintendo owned red. Green was the logical choice, only not a darker forest shade of green. A brighter shade. "We did color studies and made signs," he says. "We went into a Toys 'R' Us and set a sign up halfway across the store to test if it was visible in different shades of green. We picked a shade that jumped out at you as you looked across a series of aisles. That's how we landed on the color."

"When we started getting sensibilities around green, I liked it," adds Robbie Bach, chief Xbox officer. "At retail, you have to own shelf space. What color are you going to own shelf space in, and how do you stand out on a shelf? Green enabled us to stand out. It was that bright, effervescent Xbox green that radiated a little bit. Sony had their deep, cool blue, and we wanted to have that power-driven green for retail. I loved it for what it enabled us to do at retail. And I think black was the default color because that's what everybody did. What color are most consumer electronics? Black."

Ultimately, the Xbox took the form of a large, black box with a black X stretched across the top. A circular, toxic-green jewel was embedded in its center. "It goes back to hardcore, powerful--the idea that under the shell was this amazing power that exploded out and shone a green light--that really fit with the story we were trying to tell," Coyner explains. "The console itself was bowed on top to give that feeling that there's a lot of power in this thing--like it's ready to explode because it's so big. And it was big. And heavy."

To the surprise and dismay of many within Microsoft and a majority of players and critics, the only component bigger than Xbox itself was the first retail iteration of its controller.