How the original Xbox team convinced 'insulted' Bill Gates to green-light a console

Despite his grievances, Gates greenlit the decision to build a console to stop Sony from 'invading the living room.'


Speaking to IGN editor Ryan McCaffrey (via GameSpot) in a video interview, Xbox co-creator Ed Fries reminisced kinda-sorta fondly about the St. Valentine's Day Massacre, the name whispered internally at Microsoft to refer to the day Bill Gates went into a tirade over the proposal for the original Xbox console.

Fries explained that there were two teams trying to sell Gates—then chairman and chief software architect, a position the Microsoft co-founder created for himself—and CEO Steve Ballmer on creating a game console. Fries headed one team, and put together a proposal for, in essence, a PC in a box. It would run on Windows and contain a hard disk drive to minimize loading times.

The other team, led by designer Seamus Blackley, pitched a box modeled after Sega's Dreamcast, on the basis that "at the time, Dreamcast was king. Influence," Blackley wrote on Twitter upon revealing his original concept sketches for the Xbox.

Gates threw in with Fries' team. He liked the idea of building a game console that served as a Trojan horse: a game machine to the untrained eye, but under the hood, another Windows platform. Gates allotted one year for the Xbox team to put a business plan together and get the ball rolling. The strategy underwent some modifications.

"Then we spend a year going over what it's actually going to take, the [second] team shuts down and joins us, and we become more like them, but at some point we drop Windows. We want this closed thing that runs games really well," Fries explained (via NeoGAF).

There was just one problem. Fries and his teammates, including Blackley and fellow Xbox co-creator J Allard, forgot to inform Gates that Windows would no longer comprise the beating heart of Microsoft's console. At a meeting scheduled for 4:00 pm on Valentine's Day, Gates blew his top.

"So we go into the meeting and four o'clock Valentine's Day," Fries said. "Bill walks in, he's holding a PowerPoint deck and yells, 'This is the blanking insult to everything I've done at this company' and that was the start, so we all looked at [Xbox director and designer J Allard] because we knew Bill's mad about the no Windows thing, because we forgot to 'pre-disaster' him, so J is in shock for a minute and Bill yells at me and shuts me down and Robbie steps up and Bill shuts him down anyway, and then Ballmer goes through and says we're gonna lose a lot of money and he's beating us up about that."

An hour passes. Two hours. Fries and the others steal glances at their watches. It's nearing six o'clock on the most romantic day of the year, and Gates is still unleashing hellfire and brimstone. To Fries' amazement, one of the other attendees raises a hand. Gates pauses in mid-tirade and calls on him.

"'What about Sony?' and he says, 'Sony is slowly invading the living room with a processor here software there, they could be a threat to Microsoft.'"

Gates and Ballmer stared at each other. "Yeah," Gates said. "What about Sony?"

Gates turned to the Xbox team and promised to give them everything they needed to create their console, Windows or no Windows. Ballmer echoed the chairman's vow.

"And I turn to Robbie and say, 'That was the weirdest meeting I've ever been in,'" Fries said.

Long Reads Editor

David L. Craddock writes fiction, nonfiction, and grocery lists. He is the author of the Stay Awhile and Listen series, and the Gairden Chronicles series of fantasy novels for young adults. Outside of writing, he enjoys playing Mario, Zelda, and Dark Souls games, and will be happy to discuss at length the myriad reasons why Dark Souls 2 is the best in the series. Follow him online at and @davidlcraddock.

From The Chatty
    • reply
      June 30, 2016 3:13 PM

      This was cool. I'd have never guessed the lack of Windows would have been divisive. I honestly think that if it looked anything like Windows, it would have never worked.

      I'm curious. Does the living room matter today? Is there a battle for the living room?

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        June 30, 2016 3:26 PM


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          June 30, 2016 3:52 PM

          No Kyle. The living room will have to save itself.

      • reply
        June 30, 2016 3:28 PM

        everything in the company revolved around Windows for a long long time. Microsoft was Windows.

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          June 30, 2016 3:54 PM

          True, and they still are. Practically every venture outside of that hasn't worked out very well for them. Some things have been able to be profitable, but they've got nothing to currently fill that gap. More than anything I think they're out of touch.

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            June 30, 2016 4:54 PM

            There're a number of non-Windows divisions that are very successful (Office brings in more than Windows, Azure is big too), but the way the company thought was always very Windows driven until recently

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              June 30, 2016 5:11 PM

              Hence why I said "some". But what I find very interesting about Microsoft is that they've gone from being very successful in the home user space, to losing a lot of that entirely. Xbox division is certainly isn't where it could be, Windows OS proliferation is at an all time low, and they've got less mobile market share now than they did when BlackBerry was a somebody. It's been interesting to see them lose a lot of what they've built. If it continues Microsoft will strictly an enterprise solution. Something you only use when you go to work, or only as a back end server software.

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                June 30, 2016 5:13 PM

                well Xbox's reach was never going to be at a PC or mobile scale no matter how successful. It's really just about missing mobile. It's not like there were a ton of successful consumer services/devices prior to that (and even fewer that weren't piggybacking on Windows)

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                  June 30, 2016 5:26 PM

                  Right, but not seeing a Microsoft/Windows something that isn't closer to user's than Xbox is strange. They clearly wanted that to be the goal with the XB1 with the failed TV initiative, and after seeing that I wonder if they've just given up. As it stands they have nothing to fill the void.

                  No Xbox wasn't likely to ever reach that scale, it's a hobbyist focused device while Windows is much more general. It still shouldn't have went so far backwards. Perhaps this just speaks to how good the 360 actually is.

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        June 30, 2016 7:50 PM

        This is the same company that put a goddamn start menu in their phone OS

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          June 30, 2016 8:16 PM

          Back in the early days of Windows CE (lol wince!) it was pretty mind-blowing and cool. It promised a much richer UI experience than was available on the Palm Pilot. I don't blame Microsoft starting that way back in 1996.

          They clung to their Windows and Windows UI motifs way too long, that's for certain. The notion that Windows was a selling point was a pretty terrible idea but I'm sure they also thought it would drive OS sales.

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          June 30, 2016 8:41 PM

          It wasn't a phone OS to start with, it was PDA software, and it was fucking rad at the time.

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            June 30, 2016 8:55 PM

            It being good at the time was questionable well before iOS. I used a Palm Pilot PDA back in the day because I always thought a start menu on such a tiny screen was a terrible idea. Palm and Blackberry both had better UIs for years.

            EIther way, this is all Irrelevant. They sat on having a start menu on their phones through 2010, because hail Windows.

            At least the people in the XBox division managed to forego Windows on the console and focus on making it perform well as a gaming device.

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              July 1, 2016 7:46 AM

              I didn't really say good, it was just cool during a time where doing things just because you can was still neato, even if not entirely practical or appropriate.

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          June 30, 2016 8:51 PM

          It's totally dumb in hindsight. I'll agree with that. However, the design and what it offered was so much more than what other devices had going at the time. Ironically you busting them up for having a start menu, be came a huge point of contention when they removed it from their desktop OS :D

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            June 30, 2016 8:59 PM

            I used the Palm Pilot back then because I always thought the start menu in a PDA was ridiculous. The screen size is the problem, its way too small. Blowback for removing it on the desktop is understandable. Taking it away on the phone would have been a good first step to making a UI optimized to smaller screens.

            Microsoft was incapable of doing this until other companies set a standard. Its the same thinking that had Bill Gates freaking out when Windows wasn't on the original XBox.

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      June 30, 2016 3:24 PM

      I hope you are getting lots of "hits" on these types of stores David, they are great.

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        June 30, 2016 3:35 PM

        Yeah, neat story

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        June 30, 2016 3:50 PM

        Thanks! I learned this story secondhand (see citations in the article), but it was a cool bit of history, and I love writing about that stuff.

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        June 30, 2016 10:05 PM

        Yeah, he's a great addition to the team.

    • reply
      June 30, 2016 3:59 PM


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        June 30, 2016 3:59 PM


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        June 30, 2016 4:08 PM

        Fixed! Thanks.

        All quotes from the interview were transcribed by users on NeoGAF. I went through and fixed grammatical errors and typos where I found them.

    • Zek legacy 10 years
      June 30, 2016 6:50 PM

      "at the time, Dreamcast was king"

      :? When was this? September 8, 1999?

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        June 30, 2016 6:53 PM

        I thought the same thing. He might have meant king in terms of hardware power. The DC was beefier than PS1 and N64, and PS2.

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          June 30, 2016 8:54 PM

          Well the PS2 may not have been out at the time depending on when they started talking.

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          July 1, 2016 7:22 AM

          Ps2 was more powerful than the dreamcast though.

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            July 1, 2016 8:15 PM

            Games available for both systems never proved that to be true. They tended to look and play better on the DC.

      • reply
        June 30, 2016 11:01 PM

        The Dreamcast will always being king of my heart.

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