Excerpt

Bill Gates was showing off his new baby. It was March 10, 2000, at the Civic Auditorium in San Jose, California. More than 3,500 attendees of the Game Developers Conference had packed the room and the event aired on TV all over the world. Standing on a dark cavernous stage, Gates talked about the future of gaming and was ready to unveil what he coyly called a "secret, a very deep secret." Thanks to months of rumors, everyone knew that he was about to show off the Xbox, Microsoft's upcoming video game console. He pulled a black shroud off a table and there was the machine, a shiny chrome device in the shape of a letter X, with a big green jewel at its center.

"The modest tag line here is the future of console gaming," he said.

To demonstrate the Xbox, he invited one of the instigators of it, Jonathan "Seamus" Blackley, to come onto the stage with him. Blackley was worried sick back stage, but when he came out he exuded confidence. He draped a leather jacket with the Xbox logo on it over Gates' shoulders. He proceeded to wow the audience by showing on a big screen what the Xbox could do. Blackley delighted the audience with 3-D animations that looked real; he showed ping pong balls bouncing around a room in a wild blur of motion, butterflies dancing about a koi pond with perfect reflections in the shimmering water; a room with a desk that was detailed down to the tiniest items like a working computer keyboard; and a computer-animated woman practicing martial arts maneuvers in perfect unison with a 16-foot-tall robot. Blackley put down the competition with style, like a gamer talking trash with friends at the arcade. He got a roar of applause. The Xbox was Microsoft's weapon to take on the Japanese in the video game business and make gaming the premiere entertainment medium. And, more than the words of the world's richest man, it was the eye-popping demos that made this proposition credible.

"We've put quite a budget behind this one, and we're going to break through in a very big way," Gates concluded.

Few people outside the industry knew much about Blackley, a seasoned game developer who only a year ago had shipped one of the game industry's biggest lemons – a failed dinosaur game called Trespasser. And just a year later, he was sharing the limelight with the world's richest man, making lemonade that game fanatics were drinking with delight. He and his friends had gotten Bill Gates to commit billions of dollars to the Xbox. Just who was this Blackley guy?

This was not the first time Blackley rubbed shoulders with someone so famous. A few years earlier, he toiled on Trespasser for filmmaker Steven Spielberg. Spielberg's DreamWorks movie studio in Los Angeles had hired Blackley to help it break into the computer games business, and Blackley aimed to make a great game out of the big DreamWorks' hit, "Jurassic Park: The Lost World." It was a hip job for someone who believed that making video games was more than a technological feat — it was an artistic enterprise — like the craft of making a movie. The association with Spielberg gave Blackley cachet, validating his passion for the emerging art form of interactive entertainment. He was always "burning to get this emotion out of me and put it into the people playing the games."

Blackley was not your typical Hollywood smoothie. His cheeks hung wider than the rest of his face, giving him a kind of chipmunk look. His grin was impish and his voice high-pitched. He had close-shorn brownish red hair that made it easier to spot the stud piercing his ear lobe. He stood 6 ' feet 2 " tall and weighed about 190 pounds; he had the build of a linebacker. He spoke a mile a minute and could match wits with the brightest. Besides games, he had mastered an eclectic mix of topics including cars, physics, jazz, and history. He dressed in daring fashions — like Nehru-style jackets and black sock hats. His flair set him apart from the typically conservative tech crowd. One of his friends described him as "one of the first cool people I met among the geeks" in the games business.

Blackley's knack for talking would get him into trouble. He had built up the hype machine for a new game that would have realistic physics – a world where the laws of everyday life would apply. If you threw a stone in the water, it would splash. Game magazines predicted it would be a monster success. Jerry Sanders, CEO of Advanced Micro Devices, showed it off in the hope that it would sell more of his microprocessors for personal computers. And Bill Gates himself saw a demo and e-mailed Blackley's boss, saying that Blackley was "brilliant."

Blackley had tried to make his game so real that gamers would lose themselves in an artificial world of an island full of dangerous dinosaurs. Instead, gamers found that the game was slow-paced, buggy, and riddled with inconsistencies; they could never tell if they shot at a dinosaur with a realistic rifle if the monster would be hurt or annoyed. It was so numbingly realistic it was boring. Trespasser was expected to sell a million units, but when it debuted in the fall of 1998, it only sold 60,000 units in the United States, generating about $2.4 million in revenue, a fraction of its estimated $8 million costs. Blackley's flame-out was spectacular and visible. He had been a modern-day Icarus burning his wings by flying too close to the sun. This man, who liked to soar in the clouds in his own glider, had been in his dream job. With melted wings he fell into the sea. He quit the job at DreamWorks and sought out a place to salve his wounds in anonymity. As it all came crashing down, Blackley figured his career in games was finished.

"I figured no one would trust me to make a game again because I fucked up," he recalled. "It was an emotional disaster."

It was all the more crushing because Blackley felt he had let down Spielberg. People aimed their darts at the movie maker, saying he had no business being in games. Blackley was disappointed in himself because he had given up a career as a theoretical physicist – atom-smashing work he felt was akin to "staring at the face of God" – to fulfill his lifelong passion of creating compelling games. He had been very good at game development. One of his titles, "Flight Unlimited," sold 780,000 units, and he had grown so confident at creating games that he trusted his own intuition. He was in for a huge surprise. He was trying to move games closer to film, and instead he had set games back.

"Trespasser was a victim of over-ambition, of trying to achieve way too much innovation," said Austin Grossman, a designer and writer who had worked with Blackley on Trespasser. "But that was Seamus. He wasn't there to do a job. He was there to make his mark."

Monica Singh, another producer at DreamWorks and a close friend, said Blackley took the reviews as if they were personal attacks against him.

As Singh tried to console Blackley, she watched him "descend into his darkest time." He moved out of the office he shared with another producer, and began working in an office by himself away from the rest of the team. He didn't goof around like he once did. He visited his parents in New Mexico but was too fidgety to relax. He broke up with the girlfriend he had been seeing for eight years.

Blackley kept thinking about what might have been. He said, "I believe Trespasser could have been a magnificent game if I had figured out how to pull the team out of the mistakes I had led them into."

Blackley felt he had to get away. He took off on a vacation through Europe and toured a bunch of World War II battlefields and castles. In England, he checked out the historic sites of the war-era code breakers like Alan Turing, whose work became the foundation of computer science. He braved the spiders and looked through the gun emplacements at Point du Hoc, where U.S. Army Rangers scaled the cliffs to take out German artillery on D-Day. He walked on Omaha Beach where soldiers died by the hundreds as they crawled and staggered up the beach in the face of withering machine gun fire. Here, he could forget about work and contemplate heroism in another time. When he returned from his trip, he gathered his belongings and left Hollywood for Redmond, a suburb of Seattle and home to Microsoft.

On Feb. 5, 1999, Blackley showed up to at Microsoft work feeling like a failure. It was his first day as an employee of Gates' empire. Rain had so drenched the lawn of the corporate housing where he stayed that it was inundated with standing water. He was homesick for his sunny Hollywood. He sat through an orientation required for him to get his company identification badge. Then he went to his office. No window views. Every new employee at Microsoft started out with the same kind of windowless 9' by 12 ' office and worked their way up to window views. He knew it shouldn't matter, but, irrationally, he was pissed and depressed. Yet he liked the anonymity. "I was going to be just a regular guy," he recalled. "Just do my work and go home by 5:30 p.m. and hang out with the dog." That was just what he felt he needed to exorcise his personal demons and rehabilitate his spirit. At the time, he was 30 years old.

The sprawling campus was a congenial place – at least when the rain wasn't pouring. It was sprinkled with low-rise white buildings with green-tinted glass. A creek wound its way through stands of evergreen trees. The dozens of buildings provided nearly 5 million square feet of office space. Well stocked with free beverages, volleyball courts, soccer fields and other perks, Microsoft had all the trappings of a hugely successful company. At the time Blackley joined it, Microsoft was on its way to reporting $19.75 billion in annual revenue and astounding profits of $7.7 billion. The campus was populated with multiple tiers of employees. About 73.6 percent of them were male, and the average age was 34.1 years. In the parking lots, employee cars illustrated the stratified work environment. Sleek Porsches and BMWs glistened in the sunshine next to a dinged-up 1972 Toyota Corolla. Far from rich himself, Blackley had a few friends on campus in this super-rich fraternity. It was an insular neighborhood, where people belonged to the cult of Bill Gates. Microsoft was viewed with considerable disrespect from the outside as a bunch of copycats and hegemonists. But inside, Softies believed that they were misunderstood innovators. They had an ability to execute ruthlessly. The attitude was fiercely anti-government because of the recent antitrust case. One division even had a piñata in the image of U.S. Attorney General Janet Reno, filled with bitter chocolate.

Not long after he started at Microsoft, Blackley attended the Game Developers Conference in San Jose, CA, in March, 1999. As the conference ended, Blackley met with Johnny Wilson, editor in chief of Computer Gaming World, a game review magazine. The gray-bearded Wilson was a kind of elder statesman among game critics and he had done much to build the hype around "Trespasser," which graced the cover of CGW more than a year before its release. Wilson saw Blackley as an ambitious genius who tried to break new ground. Yet his magazine was one of those that panned the game. Wilson and Blackley sat atop the Microsoft booth at the end of the show, as workers were busy dismantling the exhibits. Blackley was mentally packing away his dreams. Wilson stretched out his hands to Blackley, and told him in a kindly voice, "Seamus, keep making games." The moment was too much for Blackley. He broke down in tears.

At Microsoft, Blackley took a job as a graphics program manager working for one of Microsoft's multimedia executives. There, in the shadow of the Cascade mountains, he figured he could always get rich from Microsoft's lucrative stock options (if the stock performed miracles), and do some good coding.

"I wanted to keep my head down and focus on good old-fashioned technology," Blackley recalled.

It was an opportunity to escape the embarrassment that awaited him from chance encounters with fellow game developers. Stripped of the things that gave him self-confidence, he had to start rebuilding his sense of self. Blackley's trip to Redmond might have achieved his aim of technical grace and anonymity. But Blackley wasn't meant to be a bystander in life. Once, he interceded when a pit bull seized the throat of a Labrador retriever that a little boy was walking through Blackley's friend's neighborhood. Others just stood by and watched, while a crowd of bystanders were yelling "Do something!" Blackley moved between the dogs and began pulling the pit bull off the other helpless dog. He wrapped his huge bulk around the pit bull, which wouldn't let go. He began pounding the dog with his fists. Finally, the pit bull yelped and let go. Blackley had saved the Labrador's life, while very clearly risking his own, according to witnesses on the scene. He got up, walked into his friend's house and began crying, thinking, "That dog was just doing what it was bred to do. It didn't know any better. It just doesn't make you feel good hitting a dog like that."

Just days into the job at Microsoft, Blackley steered off course. Sony announced the details of its PlayStation 2 game console. It was such a big event in the history of games that Blackley felt weird sitting on the sidelines. A friend of Blackley's, Otto Berkes, had already been contemplating how to take on Sony. He got Blackley to think about Microsoft's response. And, Jay Torborg, one of Blackley's overseers, asked him to write an analysis comparing the graphics of the PlayStation 2 to those of personal computers. Blackley took the assignment on the road. His former girlfriend had recently moved to Boston. He visited her, and on the plane trip back he started thinking about his assignment. He thought of how Trespasser could have been a magnificent game if made today. So much had moved forward on the PC. The graphics chip makers were hitting full stride with 3-D animation hardware. The Windows 98 operating system was fully capable of running games without constantly crashing. There was a growing base of fans and a community of dedicated game developers.

"You realize that you're at a tipping point for things to happen," Blackley recalled. "That occurred to me on the plane. It switched on in my head, and I became driven. It was like taking on a new mission: what if we could make a game console at Microsoft?"

Blackley might not have had such a hard time with Trespasser if the PC weren't such a pain in the ass for programmers. He had needed more horsepower to do his game right, but he also had to make sure it ran on the slowest of game computers as well as the fastest. That had always been the curse of doing PC games. Computer gamers owned a mish-mash of hardware that had been made by different companies with a wide array of configurations. It was a miracle that most computers were even remotely close to being compatible with the Microsoft and Intel standards. The only way to make sure a game would run on all machines was to shoot for the lowest common denominator. And the technology kept changing. Even seasoned game developers fretted, as Blackley discovered on Trespasser, that "it's like we have to recreate the camera every time we want to do a new film." That was a contrast to video game consoles, which were stable, predictable platforms because they were all uniform and because they changed technology only once every five years or so.

Working at Microsoft in the division focused on graphics, Blackley had been exposed to the latest graphics chip technologies, the ones that were still in the labs. Blackley made his technical comparisons. It dawned on him, "we could smoke the PlayStation 2." He knew that DirectX had better tools than the PlayStation 2. So he thought, "What if there were a game console that was easy to program?" What if that console could take advantage of the best of PC technologies without taking on the complexity of having to support dozens of different combinations of user hardware, with incompatible sound cards or graphics components? It was not a brilliant thought. It was obvious. It was also obvious to most people that it couldn't be done. The PC always had these tradeoffs, and video game consoles had others like early technological obsolescence. Nothing would ever change that. But Blackley persisted in experimenting with this "what-if" exercise.

"I realized we could make a superdooper bad-ass game console," he said. "The hardware didn't have to be the limiting factor anymore. It could be like the canvas that allowed the artist to express his true intentions without so many compromises."

Upon his return to Redmond, he began sharing this "bullshit idea" among his friends at work. They exchanged some emails and decided to call the machine the Xbox, named after the DirectX technology that allowed games to run on Microsoft's Windows software.

Blackley spread his gospel. Even before he began recruiting, three others were ready to join because they had been thinking the same thing. Ted Hase, a manager in the Developer Relations Group who promoted game technology; Kevin Bachus, a product marketing manager for DirectX who had an encyclopedic knowledge of the games industry, and Otto Berkes, a DirectX graphics programming whiz who had begun work on a "Windows entertainment platform." They could all relate because they too had complained for years about the PC. They all wanted Microsoft to create a console.

One by one, co-workers signed on board. Blackley met with Bill Gates and Microsoft President Steve Ballmer more times than most other first-year Microsoft employees could ever hope. The two men replaced Spielberg as Blackley's business idols. Again, he happily played the role of their gregarious acolyte. By the end of the planning he had gotten one of the world's biggest technology giants to commit billions of dollars over five years in what would be the manifestation of the "war for the eyeballs" of consumers that had been predicted years earlier by Intel Chairman Andrew Grove, who felt that an all-out battle for consumers was about to bring the PC industry into conflict with consumer electronics makers. Like a virus run amok, Blackley and his friends instigated the largest start-up in Microsoft's history. He inaugurated a World War between the hegemonies of Microsoft, Sony and Nintendo. A year after the idea sprouted, Gates and Blackley told the world about the Xbox at the Game Developers Conference, and 20 months after that Microsoft unleashed the Xbox on gamers and vowed to sell tens of millions of units.

Blackley had recovered from his failure. He dove back into the fray and set himself up for either a glorious comeback or an even more gargantuan mistake. He became the little guy people in the games industry rooted for even though he was part of a giant, much-vilified company. This is the story of how he and his cohorts convinced Bill Gates to enter the video game business, pitting technology based upon the PC against the established consoles of Sony, Nintendo and (for a time) Sega – in what would be no less than a worldwide battle for control of entertainment in the living room. Time will tell if Microsoft will take over the video game business and control the future of entertainment in the same way that it has absorbed so many other high-tech markets. Brilliant or stupid. Fast or slow. Does Microsoft really get it? People would wonder that throughout the entire Xbox project. But one lesson was surprisingly clear to Blackley: "It turned out that fucking up was a really good experience."

This is the story of how Jonathan "Seamus" Blackley and his cohorts persuaded Bill Gates to enter the video game business. The move pits technology based on the PC against the established consoles of Sony and Nintendo and Sega (though that last has already fallen by the wayside)—in no less than a worldwide battle for control of entertainment in the living room.

Big ideas can emerge from fiascoes. On February 5, 1999, Blackley showed up to work feeling like a failure. It was his first day as an employee of Microsoft. Rain had so drenched the lawn of the corporate housing he had been assigned that it was inundated with standing water. He was homesick for his sunny home in Hollywood in Southern California. He sat through an orientation required for him to get his company identification badge. Then he went to his office. It was in the middle of a building with no window views. Every new employee at Microsoft started out with the same kind of windowless 9' by 12' office and worked their way up to window views. He knew it shouldn't matter, but, irrationally, he was pissed and depressed. Yet he liked the anonymity. "I was going to be just a regular guy," he recalled. "Just do my work and go home by 5:30 p.m. and hang out with the dog." That was just what he felt he needed to exorcise his personal demons and rehabilitate his spirit.