Speaking to IGN, former Microsoft VP Joachim Kempin has revealed that Microsoft got into the console business to beat Sony at the ‘game’ they dominated in.
Interestingly, this came about after Microsoft expressed interest in a partnership with Sony, but was denied. Kempin says Microsoft then deliberately created the original Xbox to take Sony’s Playstation 2. Microsoft did not want Sony to dominate the television market in the way that Microsoft did so with the PC business.
“Sony was always very arm’s length with Microsoft,” Kempin explained.
“Yeah, they bought Windows for their PCs but when you really take a hard look at that, they were never Microsoft’s friend. And Microsoft in a way wanted them to be a friend because they knew they had a lot of things we could have cooperated on because they are, in a way, an entertainment company, you know? I mean, at least a portion of Sony is and they had some really good things going there, but as soon as they came out with a video console, Microsoft just looked at that and said ‘well, we have to beat them, so let’s do our own.'”
Kempin explained that Microsoft took to manufacturing the console after failing to convince any PC manufacturer to build the new console.
“The [PC manufacturers] were smart enough not to bite, because they studied the Sony model and saw that Sony could not make money on that hardware model, ever,” Kempin said.
“So they supplemented it with software royalties, and Microsoft copied that model.”