Microsoft: Out of the X Box

How Bill Gates built his new game machine--and changed your living room forever

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The trick going forward is for Microsoft to walk a delicate line between two opposing principles: openness and, for lack of a better word, closedness. Whoever is king of the living room will control the flow of 1s and 0s that very soon will make up the entire fabric of our living culture. That's a big responsibility, and a big test for any company--it's always tempting to use that kind of power to squeeze out the competition. If Xbox 360 were to take over your media cabinet, would it play DVDs with Sony Pictures movies on them? Of course. But would it play songs from a Sony-owned online music store? Would it accept messages from AOL Instant Messenger? Would it network with a computer running Mac OSX and not Windows? If a platform is too open, you can't make money off it. Too closed, and nobody else uses it, and it withers away and dies.

The final step in the process has nothing to do with what's inside the Xbox: Microsoft will have to make it cool. In addition to giving it that iPod-esque design, Peter Moore will run a very hip, very un-Microsoft ad campaign featuring quirky hipsters wearing the Xbox logo. Moore just threw the Xbox 360 the equivalent of a movie premiere: a party, broadcast on MTV, with Elijah Wood as host and featuring beyond-trendy rockers the Killers. For the Xbox 360's theme song, Moore licensed an obscure Sex Pistols B-side titled C'mon Everybody, with Sid Vicious on vocals. "Bill and Steve, Gates and Ballmer--when we make marketing presentations, they'll sit and watch and say, 'I have no idea what's going on,'" Moore says. "But at the same time, that's what I need to hear. Because if they do understand it, that's when you know you're in trouble."

If it seems incredible to you that, a year from now, there could an Xbox 360 in your living room--or a PlayStation3 or a Nintendo whatever-they're-calling-it--and that you could be using it to videoconference with your brand-new gamer buddies while grooving on a Mahler symphony, think of all those iPod owners who, five years ago, didn't know what an MP3 was. Jaded as we are, the future can still surprise us. It might just be both nerdier--and cooler--than anybody expected.

TIME ONLINE EDITION See a history of great game consoles and Grossman's audio tour of the Xbox at

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