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How IBM Out-foxed Intel With The Xbox 360 327

Posted by Hemos
from the beat-them-to-the-punch dept.
xcaverx writes "Learning from failure is a hallmark of the technology business. Nick Baker, a 37-year-old system architect at Microsoft, knows that well. A British transplant at the software giant's Silicon Valley campus, he went from failed project to failed project in his career. He worked on such dogs as Apple Computer's defunct video card business, 3DO's failed game consoles, a chip startup that screwed up a deal with Nintendo, the never successful WebTV and Microsoft's canceled Ultimate TV satellite TV recorder. But Baker finally has a hot seller with the Xbox 360, Microsoft's video game console launched worldwide last holiday season."
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How IBM Out-foxed Intel With The Xbox 360

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  • well... (Score:5, Funny)

    by Burlap (615181) on Tuesday May 02, 2006 @11:50AM (#15245962)
    successful X360 launch may be stretching it a bit neh?
    • Re:well... (Score:4, Insightful)

      by johnfink (810028) on Tuesday May 02, 2006 @11:53AM (#15246011)
      Generally, selling as much as you supply at asking price is considered a success.
      • No.. it might be success for the product, but it's a pricing failure. How much unrealized revinue did they miss out on because the price was too low?
        • And it's worth it for keeping customers from feeling like they got gouged since the alternative is a $600 or $800 console that drops to $400 in price a year later. Same way automakers with a popular vehicle don't raise the MSRP just because they can't crank out enough cars. Customers would consciously or otherwise start to sour on the company over the next few years as they started to feel taken advantage of, while their car depreciates even more rapidly.
      • Re:well... (Score:5, Insightful)

        by Burlap (615181) on Tuesday May 02, 2006 @11:57AM (#15246057)
        it helps when you are the only show in town. The jury is still out as to how far their sales will fall when the PS3 hits the shelves.

        MS is in dire need of a Halo for the 360 to sell on, sure the games they have out now look 'ok' but there isn't anything out there that makes me say "WOW!"
        • Yep (Score:3, Interesting)

          by LWATCDR (28044)
          I have bought two consoles in the last six months. I tend to use a PC for gaming.
          I got a Gamecube for my wife for Christmas. I was shocked. The games on it are really fun.
          I then got a PS2 so I could play Tourist Trophy. It is pretty nice, I have gotten a few more games for the PS2 and for the GameCube since then. From what I can see the GameCube games are more fun. The PS2 games are better simulations. I thought about picking up an XBox360 but why? None of the games seem that great and it is really expensiv
        • But they will. (Score:3, Insightful)

          by tkrotchko (124118) *
          "MS is in dire need of a Halo for the 360 to sell on"

          But they will; they're saving that for when the PS3 launches.

          They learned this trick from Sony, who launched Final Fantasy VIII on the day the Dreamcast launched to take the shine off Sega.

        • Re:well... (Score:3, Insightful)

          ... it helps when you are the only show in town ...

          Well that is further evidence of a successful launch and good planning and execution.
      • Except when they artificially lower supply to enable them to *hype* sold-out.

        They made resellers sign contracts that they would sell out all stock each day it was delivered.
        • Oh please. That works for the initial delivery, sure. But the 360 shortage was very real and lasted way beyond the limit of any hype benefit to the point where MS admit it hurt them. And as for your second assertion, well it's crap. Most resellers got far less units shipped than they had preorders for, so selling out really didn't require a contract.
          • Last time I was in my local Walmart there were 3 Xbox 360s just sitting there on the shelf. No line was forming to buy them, nobody was clawing at the glass display case to get one. Most of the stories I heard about scarcity were in cities like Redmond (duh!), Silicon Valley stores (duh!), and big cities LA, NY, etc. So the shortages may have been the result of bad allocation, whether intentional or not.

            I think the Apple switch to Intel will, in the long run be seen as a blunder, but the reasons are mo
    • um... (Score:3, Insightful)

      by everphilski (877346)
      ... getting to market a year+ before your competition, selling your devices as quickly as you can produce them, considering that Microsoft is only on their second generation device whereas Sony is on their third (not to count portable devices) and Nintendo is on... uh... fifth? Microsoft is doing well. They cracked a market.
      • Re:um... (Score:4, Insightful)

        by Frag-A-Muffin (5490) on Tuesday May 02, 2006 @01:09PM (#15246736) Homepage
        ...They cracked a market...


        Anyone can crack the market if they're willing to take a $4,000,000,000 hit! (that's 4 Billion in case the zero's were blinding you)

        The real questions are: a) can the 360 turn a profit? b) how long will the shareholders allow them to bleed money into this "project"?
    • Sure, the OP could have expanded a bit upon it but they were just offering their opinion.

      There were numerous things that went wrong with the launch such as supply problems, issues with over heating and game crashes. Some suggested that these problems were indicative of a premature launch. It woudl say that launching without an HD disk solution and offering an addon later on was an unfortunate decision and indicated that they released it before it was really ready.

  • by faloi (738831) on Tuesday May 02, 2006 @11:51AM (#15245973)
    I always chuckle when my company brings on someone that's been directly responsible (at the executive level) for busines decisions in other companies that have failed misserably. Often, they recite all their past experiences, and the only thing I can think of is "Why did we hire them, and how much are we spending?"
    • On those guy's resume's, the failure is often listed as a success.... "XYZ startup: Director of Foo project, 2001-2003, Reason for leaving - Sold company for X million dollars" The omited detail is usually that X is signifigantly less than the projected market value of the company when the investors put their money in, and usually less than the amount of capital the company raised.

      In this case though, Microsoft bought this guy's failu^H^H^H^H company for a meager (by bubble standards) $470 million dollars.
    • I don't understand how a Microsoft hire helped IBM outdo Intel for the 360 box. It may well be that the products this person designed were good, but the business model for which he had no control over, was flawed. Usually when a product or business fails, it isn't because of the product itself but the PHBs that didn't know what to do with the product or were trying to sell a product that didn't have a sustainable market.
    • He worked on such dogs as Apple Computer's defunct video card business, 3DO's failed game consoles, a chip startup that screwed up a deal with Nintendo, the never successful WebTV and Microsoft's canceled Ultimate TV satellite TV recorder.

      What I want to know is how he keeps getting job offers. Seriously - I haven't had 1/100th this much opportunity in my whole entire life.

      How the hell does this guy keep landing these?

      • Re:Too true (Score:3, Insightful)

        by jandrese (485)
        Networking. The top level executive pool is an exlusive club, but once you get in you're pretty much set for life, no matter how much of a screwup you are. The best way to get in is to be the son of an existing high level executive, although there are occasional chances for other people to squeeze in. It helps a lot to already be rich too.
    • King of Swamp Castle: When I first came here, this was all swamp. Everyone said I was daft to build a castle on a swamp, but I built in all the same, just to show them. It sank into the swamp. So I built a second one. That sank into the swamp. So I built a third. That burned down, fell over, then sank into the swamp. But the fourth one stayed up. And that's what you're going to get, Lad, the strongest castle in all of England.
  • by mabu (178417)

    I think the jury is still out on the success of the 360. This guy could be batting 1000.

    • Considering they also hired Peter Moore to do the marketing for the XBox 360 (who also handled the failed marketing for the failed Dreamcast--although I, personally LOVED the Dreamcast and was sad when it died...) I would say he's probably batting 1,000. You don't take a team of failures and expect them to succeed.

      But yes, I agree it is too early to make a call either way on this. Although if they don't get a killer app on the system before the PS3 & Wii launch (or on the launch dates of the PS3 &

  • Jumping the gun... (Score:5, Insightful)

    by ivan256 (17499) * on Tuesday May 02, 2006 @11:51AM (#15245984)
    ...the never successful WebTV... But Baker finally has a hot seller with the Xbox 360, Microsoft's video game console launched worldwide last holiday season."

    Shouldn't we wait until the 360 has outsold WebTV before we make that declaration?

    • ouch, but I don't think WebTV even had 2 million users
    • the quote was 'But Baker finally has a hot seller with the Xbox 360'

      considering the overheating problems the 360 can have it may have been a subtle dig.
    • by Psychotext (262644) on Tuesday May 02, 2006 @12:49PM (#15246543)
      Last numbers I read for the worldwide sales of the 360 were 3.2 million. Anyone got a number for WebTV sales?
  • destiny (Score:5, Funny)

    by gEvil (beta) (945888) on Tuesday May 02, 2006 @11:54AM (#15246016)
    Wow! With a record like that he was destined to work for Microsoft.
    • Wow! With a record like that he was destined to work for Microsoft.

      In all seriousness, in the tech industry failures can be more valuable than success. The important thing about a failure is that you learn what won't work. Microsoft Windows was a complete failure until version 3.0. Microsoft had a rash of failures with various databases until they came up with Access (low-end) and SQLServer (high-end). The failure of 3DO shows that you that overdesigning a game console and putting cutting edge technology
    • I'd wager that if you can live through failures (financially and psychologically) you're basically trading "maintenance" time (supporting a successful product) for "development" time (creating a new innovative product). Each person has its own objectives in life and its own threshold for security, and not all failures are signs of inherent potential coaxed by external factors. Still, a failure can be seen as a reset operation allowing you to turn the page and try something else that is uber-interesting. If
  • by i_want_you_to_throw_ (559379) on Tuesday May 02, 2006 @11:54AM (#15246025) Homepage Journal
    Holy crap...all you Xbox employees better get your resumes ready!
  • Microsoft (Score:4, Funny)

    by thebdj (768618) on Tuesday May 02, 2006 @11:56AM (#15246045) Journal
    Turning failures into successes since Windows 95. *laugh people*
  • Mirror (Score:2, Informative)

    by brjndr (313083)
    Site apperas to be going down.

    Mirror [nyud.net]
  • Thus just in... (Score:2, Insightful)

    by gnovos (447128)
    And this should properly be followed by: How Intel outfoxed IBM with Apple
  • Aim High! (Score:5, Funny)

    by Rydia (556444) on Tuesday May 02, 2006 @12:08PM (#15246150)
    I am inspired- inspired!- by this man's ability to keep his chin up through it all, shoulder all the adversity, and successfully move from a series of abysmal failures to merely a catastrophic failure!

    My hat, sir, is off to you!
    • This reminds me of something a professor of mine once told me: "Don't forget that every day is a new chance for things to go horribly wrong. It's a philiosphy that has brought me to the hieghts of my career...." and then in sort of a whisperish voice he coninuted "..and some of the low ones too."
  • 'Out-foxed'? No... (Score:3, Interesting)

    by Anonymous Coward on Tuesday May 02, 2006 @12:09PM (#15246169)
    Microsoft went with IBM because they didn't want to get embarrassed by Sony and Nintendo with the uncompetitive chips from Intel and AMD.

    A very senior engineer at NVidia I know is talking more and more about how they see Intel and AMD's x86 chips as dead weight dragging them down and how they would like to make x86 irrelevant by moving all application and OS functionality onto their boards.

    The winners ended up being:

    IBM
    Sony
    Nintendo
    Microsoft

    And the losers ended up being:
    Intel - The big loser in all of this
    AMD - Less so
    Apple - Once IBM won all three console contracts they decided Apple was no longer worth the hassle for only 4% of their chips sales - buh bye!

    If you love sitting around playing with SPEC and Intel's marketing compiler or hangout at aceshardware or other x86 fanboy sites you probably see things differently. Heh.

    But the fact that a company sees there is a viable market for another 2-300 performance add on for x86 gaming systems in the PhysX boards should be as clear an indication as anyone needs to how far x86 is falling behind.

    • by SrJsignal (753163) on Tuesday May 02, 2006 @01:28PM (#15246916)
      BZZZZZZZZZZZZZZ incorrect. Microsoft went with IBM because Intel was not willing to design a chip and then have Microsoft own the IP on the chip. You do know that Microsoft owns ALL of the silicon IP for the Xbox 360, they didn't own squat on the original Xbox and thus were held to the wall on the prices of chips because they didn't own them. Also, maybe you should ask this "senior engineer" at Nvidia why they aren't doing the 360, it's for the SAME REASON, Nvidia wasn't willing to do all the design work and then not own anything. Has nothing to do with x86 vs not x86, thanks for playing. (incidently why in the world would a company with so much expertise not want to go with an x86-style chip, see above).
  • Oops. (Score:5, Funny)

    by Gannoc (210256) on Tuesday May 02, 2006 @12:14PM (#15246215)
    Larry Yang-all dictated what Microsoft needed this time around.

    They couldn't be late. They had to make hardware that could become much cheaper over time and had to pack as much performance into a game console as they could without overheating the box.


    "Unfortunately, Larry Yang did not explicitly forbid overheating the power supply"
  • by dpbsmith (263124) on Tuesday May 02, 2006 @12:17PM (#15246248) Homepage
    Learning from failure is easy. The tough part is learning from success. When a project succeeds, there's no pressure to make searching analyses of the reasons for success. The upper-level managers involved begin to think they're innately cool and have all the answers... the success of their product line proves it.

    Think Netscape... think Digital Equipment Corporation (I date their decline from the day when a salesperson apologized for being slow to return a call but added "After all, we're a billion dollar corporation." Think Ashton-Tate. Think Quark...
  • by BAM0027 (82813) <blo@27.org> on Tuesday May 02, 2006 @12:29PM (#15246364) Homepage
    Blame his management for his failures. He was probably subordinate to many in key decisions. I would praise his for going after such diverse and technically challenging projects as he has.

    What's the alternative? He slept with the right people? Come on. Each of his "failures" has been really high profile for each of the company's he's worked with. I think it's shortsighted to simply blame him.
  • From the article:

    The team labored for years and made critical decisions that enabled Microsoft to beat Sony and Nintendo to market with a new box, despite a late start with the Xbox in the previous product cycle.


    When I read that .. the only thing I could think of was: made critical decisions == compromise quality. Hahahahaha. We all know the production problems and quality problems the 360 had / is having.

    I love spin!
  • Nick Baker (Score:2, Funny)

    by sottitron (923868)
    Couldn't you also read Nick Baker's track record as proof positive the XBOX 360 will fail? That is an impressive list of failures and I don't want the XBOX 360 to ruin his average. Real quick question: is this guy old? Did he perhaps work on the design team for the titanic, too?
  • by Merciful Oblivion (952702) on Tuesday May 02, 2006 @01:14PM (#15246788)
    "He worked on such dogs as Apple Computer's defunct video card business, 3DO's failed game consoles, a chip startup that screwed up a deal with Nintendo, the never successful WebTV and Microsoft's canceled Ultimate TV satellite TV recorder." Generally a record like this indicates an aptitude in government.
  • by mb12036 (516109) on Tuesday May 02, 2006 @02:22PM (#15247442)
    Nice to see the XBox doomsayers are still hanging around Slashdot.

    All the 360 flames would be a lot more compelling if they weren't coming from people who already hate Microsoft. If Redmond came out with a motor that ran on water and gave the cars away for free, I would fully expect a series of comments about how the interior only comes in three colors and there are too few cup holders.

    Slashdot should just refrain from posting anything about the 360 - this forum is so heavily biased against any Microsoft product that Slashdot readers will find any reason they can to pick it apart.

    The irony is how worshipful XBox haters are towards the Playstation - a product of an equally evil corporation that also wants to take over the galaxy. But they're not after Linux at the moment, so I guess that makes Sony Ok.
  • by Epistax (544591) <[moc.liamg] [ta] [xatsipe]> on Tuesday May 02, 2006 @02:32PM (#15247557) Journal
    I am reminded of the South Park episode where the local boys are playing baseball but want to lose because they don't want to play anymore because they find the game ruthlessly boring. Unfortunately for them all the other teams also want to lose for the same reason, and South Park keeps winning games and ends up having to play all summer to the delight of the parents, but not to the kids.

    Stockholders = parents. Kids = Intel. A contract with Microsoft sounds great for a company, until you start reading into it. By the way that Microsoft does things, if the xbox 360 flops at any point Microsoft would be protected from losing capita by Intel and other contracted companies. The way they do it is that say they estimate 5M units to be sold in X time, they order that many units. If only 1M sells and they don't think they can sell the rest, by their contracts they do not have to, the contractors have to keep the parts that MS didn't sell and sell it themselves or take it as a loss. So if Intel took up the task and the 360 undersold (a very real worry if I was Intel), they would be at a loss of hundreds of millions to billions of dollars, while Microsoft would shrug it off and make an xbox 720 or something. Intel put the numbers in a calculator with some estimate of probability, and it came up sour. Microsoft wasn't willing to budge. To the best of my knowledge, this is what happened.

    Signing a contract with Microsoft is like arguing on the Internet....

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