Exclusive: The Xbox 360 Uncloaked - Page 7
- May 05, 2006 16:54 PM PST
- Email this!
"We didn't know what we were doing the first time," said Gibson. "If we did, we would have been more terrified about what we were getting into. It was such a barn burner just trying to complete development on time. There wasn't a lot of time to step back. We had this vision to change video games and the industry. We put our heads down on how to get that product on the shelf. When we were still putting our team together, the PlayStation 2 was already on the shelf in Japan."
Gibson began to assemble a team of electrical and mechanical engineers who would craft the system design. He asked the Mountain View group to cast a wide net in their search for relevant technologies for the key chips. The Mountain View crew looked at everything in the technical universe, including architectures for supercomputers, corporate servers, Macintosh desktops, standard PCs, set-top boxes and even cell phones.
"We wanted to look at everything with a computer in it," Gibson said. "We had an open mind."
To flesh out the chip manufacturing strategy, Holmdahl discussed his ideas with Larry Yang, who was running the silicon team in Mountain View.
"One thing I learned," Yang said, "was the strategy toward partnerships had to be different. In a standard PC, they increase performance but keep the selling price the same. It's different with a console. You want to fix features and drive costs down. It's hard to engage with a merchant semiconductor company and hit cost objectives. They typically double up on a chip's performance for the same cost. They don't ship the same chip for seven years. It's not in their DNA."
Yang's team started figuring out how Microsoft could control the schedule for reducing chip costs and integrating components together. Fortunately, globalization was on Microsoft's side. Foundries such as TSMC and contract manufacturers such as Flextronics were now much bigger and able to handle the demands associated with large console volume sales. In every aspect of hardware, from the design on through the finished product, specialists could handle a single task extremely efficiently. While each middleman player took its own profit, its specialization advantages could give the company that used it in an outsourced manufacturing model an advantage over the vertical companies that owned everything. Even the big Japanese electronics giants, Sony included, were now adopting outsourced manufacturing, said Jim McCusker, a senior vice president at Flextronics and the project lead on Xbox. Microsoft didn't need to enter the hardware or chip manufacturing businesses, but it did need to control the key parts of the supply chain to make some magic happen.
"The point of globalization is that it broadens the number of partners you can work with to get a product out without making it yourself," Yang said. "If you control the key points in the supply chain, that's what matters. Then you tap the key players who can do the work for you and all they do for a living is that one thing. You can control your own destiny."
Inside the Mountain View campus, Yang's team would grow to include chip architects, design verification engineers, physical designers, operations people, supply chain managers, and planners. The team saw an opportunity to create one of the necessary chips for Xenon, a TV encoder that would enable the machine to record and play back video, from the ground up. It would take no more than 10 engineers, partly because Microsoft owned encoder technology thanks to its Ultimate TV project. This was one case where the WebTV experience paid off.
