Opening the Xbox: Inside Microsoft’s Plan to Unleash an Entertainment Revolution [2002]

Date: July 2002

Source: Takahashi, Dean (2002). Opening the Xbox: Inside Microsoft's Plan to Unleash an Entertainment Revolution (p. 115). Prima Publishing.

But Sweeney still had tremendous respect for Blackley, and they became good friends.
And, as Blackley told him about what he was working on, Sweeney came to regard Blackley as the champion for the cause of developers and artists within the ordinarily nasty Microsoft empire. Lorne Lanning, president of Oddworld Inhabitants, a game developer in San Luis Obispo, California, shared that view. “It was a huge relief to have a creatively-driven mind in charge of designing hardware for the industry,” said Lanning. “Seamus was a huge breath of fresh air for developers, even though he was a royal wieseass.”

(pp. 235-236)

Kazuo Hirai, president of Sony’s U.S. games unit, noted confidently that Microsoft lacked the experience to understand the console games market. The PS 2’s Japanese launch was breaking all video game sales records, with nearly 1 million units selling in the first weekend. Hirai pointed to dozens of games on the floor that were being shown for the first time, and he noted that publishers were working on more than 270 games for the PS 2, which was launching in the United States in the fall. The implication: How could Microsoft catch up? Yet some game developers at the show, like Lorne Lanning, creative director at Oddworld Inhabitants in San Luis Obispo, California, complained to the media about how hard it was to write games for the PS 2. The PS 2 development system—which every game developer had to buy to program games—cost a hefty $25,000. And it was a bear to work with. These sore points would eventually give Microsoft an inroad into key developers.

(pp. 240-243)

Bungie was just one of many deals that Fries had in the works. Sherry McKenna and Lorne Lanning of Oddworld Inhabitants were also attractive targets, but the courtship lasted a long time and it involved a series of chance events. McKenna and Lanning had formed Oddworld Inhabitants in 1994 in downtown San Luis Obispo, a small college town on the California coast. They convinced an investment banker to give them $3.5 million in venture capital, which allowed them to escape their jobs (working on Hollywood commercials and theme parks) and apply their special effects and computer animation skills to their own stories. Lanning was an old arcad hound whose father worked at Colecovision. He saw games as a new medium where he could create characters and stories that could eventually be built into a movie franchise. McKenna, who had created theme park rides at Universal Studios Florida and worked on many films, was skeptical. Lanning convinced her to make games based around a set of five stories in the Oddworld Universe. The stories involved empathic little alien characters who had their own personalities, unlike most action-oriented video games. The game was laced with political messages pointing out the horrors of toxic waste, global warming, consumerism, exploitation of the poor, and animal testing. Always “embarrassed by shallow stories,” Lanning felt that using the game’s environment and story as a vehicle for a political statement could carry games to a new intellectual level without sacrificing a sense of irony and humor.” I sat down with Sherry and said let me tell this story,” Lanning says. “I said this was our most logical path on the road to making movies. I believed the games would catch up with the movies in terms of graphics resolution.” “I fell for it,” says McKenna. Abe’s Oddysee and the sequel Abe’s Exoddus were hits, selling more than 3 million units on the Sony PlayStation. But Oddworld’s publisher, New York-based GT Interactive Software, began to implode in the late 1990s. McKenna went shopping for a publisher. In the back of her head, she fondly remembered her meetings with Steve Schreck when he was working at Broderbund Software before moving on to become a planner at Microsoft. McKenna met Ed Fries for the first time at a restaurant in the middle of the Game Developers Conference in March 1999, shortly after the Xbox announcement. Fries was having dinner with another game executive. He came over to McKenna, who was dining with another game executive. He came over to McKenna, who was dining with a Sony official. Fries pulled up a chair as if he and McKenna went way back and mentioned how much he admired Oddworld’s games. “You know each other,” the Sony official asked, slightly suspiciously. “We’re old friends,” Fries said. McKenna played along but inside she was thinking, “Sony thinks I’m talking to Microsoft. This is the most uncomfortable conversation on the planet.” Meanwhile, Lanning and his crew of technicians were trying to figure out how to do their next game on the Sony PlayStation 2. They couldn’t make it work. They were upsed with the hassles of the system. They discovered problems like how they would have to create their own software for anti-aliasing—a technique for smoothing out the jagged lines of polygons in round animated objects—which they had expected the hardware to handle on its own. They wanted a lot of action on the screen, but most of all they cared about facial expressions and eyes on the characters. “A lot of game developers don’t care about the eyes,” McKenna said. “But we come from making motion pictures. We care about our characters more and much of the emotion and empathy starts with the eyes.”
Lanning and McKenna had started hearing about Microsoft’s Xbox project in the summer of 1999. Lanning liked what he heard. He wasn’t happy with the lack of communication from Sony about how to make the process of programming games for the PS 2 easier. Fries and Blackley sent emissaries to solicit their feedback. “Microsoft did something very uncommon and asked us what we wanted in a console system,” Lanning said. At the E3 trade show in May 2000, McKenna was indeed talking to Microsoft again. Lanning was showing the art from the third installment of the Oddworld series to Steve Schreck. Then Bruno Bonnell, CEO of Infogrames, which had purchased Oddworld’s publisher (GT) in 1999, walked in during the middle of the demo. “We’re busted,” McKenna thought. “I just smiled,” Bonnell recalled. “I thought we could all be friendly here and work something out.” The talks continued through the summer. Microsoft’s game managers told McKenna about the Xbox and their plans for it. Lanning was getting excited about its capabilities. He had switched from the PlayStation 2 to the PC. But now he was prepared to switch once again. When Lanning began communicating with Blackley on technical details in the fall of 2000, he was impressed with Blackley’s brilliance. But he did grow tired of how long it was taking Microsoft to make up its mind about the hardware. In one early conversation, Lanning decided to exaggerate what he needed in his game so he could really figure out what the Xbox was capable of. He said he wanted the ability to put four dozen characters on the screen at the same time, with all sorts of lighting and shading effects and a huge landscape with 400 trees in the background and clouds passing overhead casting shadows. “With the Xbox this should be a breeze, right?” Lanning asked. He waited for Blackley’s reaction. “Dude!” Blackley yelled. “You’re fucking high!” Lanning admitted he was kidding, but only a little. His game was going to be ambitious, and he already knew that the PlayStation 2 wasn’t good enough to do what he had described. McKenna decided to hitch the company’s fate to the Xbox, and she later cut a deal at an opportune moment.

(pp. 257-258)

Next came the U.S. launch. For Sony, this debut on October 26, 2000, wasn’t just another new toy for Christmas. Together with the Japan launch, the event marked the beginning of the game trade’s most ambitious assault on the broader entertainment market. On October 17, Microsoft announced to retailers that it had snared Oddworld Inhabitants as a developer. Lorne Lanning and Sherry McKenna would now make the third game in the Oddworld series, Munch’s Oddysee, as an exclusive first-party Microsoft title for the Xbox. The deal was complex because Oddworld was under contract for the game with the French publisher, Infogrames. But one of Fries’s aggressive product planners, Steve Schreck, had known Oddworld’s CEO, Sherry McKenna, from past attempts to recruit her, and Kevin Bachus had steered Fries to Oddworld because he knew that Infogrames was willing to entertain a joint publishing deal. Schreck and McKenna and Infogrames, as well as lawyers from both sides, worked 36 hours straight to finish the deal by October 17. In what McKenna called one of the “nightmares of my life,” they cut an elaborate deal and signed the papers with minutes to spare. Fries had two copies of his speech ready. As his aide told him about the signing, he went with the first speech and told the retailers he had just signed one of Sony’s developers. Bruno Bonnell of Infogrames was growing more excited about the Xbox. His teams had decided to do 10 games for the Xbox, and soon Bonnell would increase that to 25 games. “The more we looked at the machine, the more comfortable we were,” he said.

(p. 278)

It was left to Lorne Lanning, founder of Oddworld Inhabitants, to wow the crowd with the first Xbox demo. Unfortunately, he had shown his game at the CES show, so it wasn’t all that surprising—even though he really could deploy dozens of little characters on the screen and display a vast landscape at the same time. It was just the kind of scene had described to Blackley months ago in jest, only now it was real on the Xbox. “We’ve been awaiting a time when hardware is not the issue,” he said. “The Xbox is allowing us to do what we always wanted to do. This is a sense of the world we’ve always been after and wanted to create.” “These are stories that we want to tell. These are about characters that have dilemmas. Our characters aren’t about the superheroes that we want to be. Our characters are the poor sad schhmucks that we really are. That’s important to us to empower these characters and bring them to life and make you feel compassion toward them.” As Lanning piloted the demo, the Xbox rendered an incredible scene, and it was only running at half the speed of the final Xbox hardware. It had realistic landscapes, big cliffs, reflective streams, trees that looked like they swayed in the wind—the whole works that was necessary to construct an illusory world. He said, “The problems we have today with the Xbox are not like walking through minefields of obscure technology. It’s making things simpler. I’d rather do it the easy way.” The only thing wrong with Lanning’s pitch was that people had heard it before. Microsoft had tipped its hand on Munch’s Oddysee already, and the novelty had worn off.

(p. 290)

The fireworks went off on Wednesday, May 15, 2001. It was the day before the exhibit floors opened, and traditionally the day when the hardware makers held press conferences to announce their news. Microsoft used the same soundstage at the Los Angeles Entertainment Center, a cavernous concrete nightclub that Sega had used a year before the launch its first Internet games. That event was Sega’s last hurrah before it canceled the Dreamcast. Sega’s bad luck was about to rub off on Microsoft. When the press conference got started, the house was packed with international journalists, Microsoft PR people, and industry VIPs. Acid-green light bathed the room. A swirling Xbox logo created a surreal effect. Dance music pounded. The lights zeroed in on a chair on the stage, the music faded out, and Lorne Lanning of Oddworld Inhabitants came out with his long ponytail. He repeated his familiar message about how the Xbox was for the artists, and that game developers could now show off their talents as storytellers. Geoff Keighley, editor-in-chief of the game Web site GameSlice, called this the “PlayStation 2 didn’t let me be the artist I can be” routine. Sitting on a big stool, Lanning showed off Munch’s Oddysee. But to the jaded press that had viewed the demo twice before, this was old news. Next, Lanning introduced Robbie Bach, who came out on stage his characteristic exuberance and golf shirt.

(pp. 311-312)

On July 9, Ed Fries and the first-party team gathered for one of the meetings where they passed judgment on one of the titles they would ship at the launch of the Xbox. The whole point, Fries said, was to “look someone in the eye and ask them if this team is going to make it or not.” They were deciding whether or not the games had made the appropriate progress to deserve their slot in the launch. Wave one titles were going to appear at the launch. Wave Two would appear by the end of 2001. Wave Three would appear in the first six months of 2002. And Wave Four would appear by the end of 2002. Sherry McKenna and Lorne Lanning knew that this meeting was a “go or no-go” meeting for their game. “We were terrified and felt like throwing up all day,” McKenna said. But they got the go-ahead. They had had more than a year to work on their game and had built up a staff of 60 people whose livelihoods depended on it. Now they entered crunch mode, roaring past each milestone.