Release: Fall 2001
Microsoft, a company that had been involved in PC gaming on both the hardware and software side for years—with popular titles such as Age of Empires, Midtown Madness and Flight Simulator, was brought into the console hardware market when it was hired by Sega to design the operating system for its Dreamcast system.
At the 2000 Game Developers Expo, Microsoft CEO Bill Gates annoucned their own system: the Xbox. The system would carry a 733MHz Pentium III processor, an Nvidia graphics chip and an 8GB hard disk. The system is powered by a gaming-specific version of the Windows 2000 kernel.
Discussion following the Xbox announcement was plagued with both speculation and personal opinion. Some felt that the Xbox would take over the gaming market as Microsoft had done with the PC market. (This notion was met with a mix of praise and fear.) Others saw no future for the system, as North American companies had been unable to break Japan's hold on the console market since the Nintendo Entertainment System. But if any company would have a good chance, it would be Microsoft.

The Xbox was in direct competition with the Sony PlayStation 2 and the Nintendo GameCube. Of the three, it came in second, after the PS2. The Xbox was a little slow to catch on a first, mostly due to its high price tag, but with the introduction of the Xbox Live service and a few hit titles such as the Halo series, Xbox has made its way into the books as a major success.
An online gaming service which allows you to play certain games over a broadband internet connection. Players communicate using a headset (which is included in the starter pack) during gameplay.
Unlike Sony's PS2, the Xbox is incapable of playing DVDs right out of the box. The required DVD Movie Playback Kit, which retails from $25–35 US, includes a remote and a small module that allows you to play DVD movies on your XBOX, as you would a normal DVD player.