The Making of Xbox 360

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Case Details:

Case Code : OPER061
Case Length : 20 Pages
Period : 2000-07
Organization : Microsoft Corporation
Pub Date : 2007
Teaching Note :Not Available
Countries : US
Industry : Gaming Console

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The Xbox

Developing Xbox was a new experience for Microsoft as the company had never worked with retailers and game developers before, nor did it have any experience in making consoles. Microsoft, the first American company to enter into the gaming business, had to transform itself from a software developer to hardware manufacturer and create a consumer brand from scratch.

From the beginning, Allard was clear that the console should have Internet and broadband capabilities, he said, "Microsoft is totally committed to online gaming. I believe broadband will emerge from a novelty to a necessity, just as cell phones and Web browsing have."

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Through market research and focus group studies, Microsoft arrived at its target audience, who were aged between 16 and 26 years, and were gaming enthusiasts. The brand was positioned to target this group of passionate gamers who spent at least 10 hours every week playing games...

The New Xbox

In early 2002, Microsoft planned to launch the second version of Xbox. The project to develop the new Xbox was code named Xenon. The company planned to create a seamless experience to the consumers by bringing in connectivity between gaming consoles and personal computers and by providing access to digital music, videos, photos, for the gamers.

According to Allard, "If you think of Xbox 1 as a painting, we mostly sketched in what we wanted to do. So, in Xenon, what I wanted to do was really set out more like a sculptor would and just marinate in the problem for a little bit...decide what it is, what singular vision we wanted to have to shape."...

The Design

During the development phase of Xbox 360, one of the first problems that Microsoft encountered was the design. The first version of Xbox received some bad reviews due to its huge size, which was one of the reasons for its dismal performance in the Japanese market.

The next version was to be designed to be aesthetically appealing to a wider range of customers. Jonathan Hayes, Design Director of Xbox, who was from Rhode Island School of Design, wanted Xbox 360 to convey power and grace...

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