Learning from Failure

September 25, 2006

Learning from failure is a hallmark of the technology business. Nick Baker, a 37-year-old system architect at Microsoft, knows that well. A British transplant at the software giant's Silicon Valley campus, he went from failed project to failed project in his career. He worked on such dogs as Apple Computer's defunct video card business, 3DO's failed game consoles, a chip startup that screwed up a deal with Nintendo, the never-successful WebTV and Microsoft's canceled Ultimate TV satellite TV recorder.

But Baker finally has a hot seller with the Xbox 360 , Microsoft's video game console launched worldwide last holiday season. The adventure on which he embarked four years ago would ultimately prove that failure is often the best teacher. His new gig would once again provide copious evidence that flexibility and understanding of detailed customer needs will beat a rigid business model every time. And so far the score is Xbox 360, one, and the delayed PlayStation 3, nothing.

The Xbox 360 console is Microsoft's living room Trojan horse, purchased as a game box but capable of so much more in the realm of digital entertainment in the living room. Since the day after Microsoft terminated the Ultimate TV box in February 2002, Baker has been working on the Xbox 360 silicon architecture team at Microsoft's campus in Mountain View, CA. He is one of the 3DO survivors who now gets a shot at revenge against the Japanese companies that vanquished his old firm.

"It feels good," says Baker. "I can play it at home with the kids. It's family-friendly, and I don't have to play on the Nintendo anymore."

Baker is one of the people behind the scenes who pulled together the Xbox 360 console by engineering some of the most complicated chips ever designed for a consumer entertainment device. The team labored for years and made critical decisions that enabled Microsoft to beat Sony and Nintendo to market with a new box, despite a late start with the Xbox in the previous product cycle. Their story, captured here and in a forthcoming book by the author of this article, illustrates the ups and downs in any big project.

When Baker and his pal Jeff Andrews joined games programmer Mike Abrash in early 2002, they had clear marching orders. Their bosses — Microsoft CEO Steve Ballmer, at the top of Microsoft; Robbie Bach, running the Xbox division; Xbox hardware chief Todd Holmdahl; Greg Gibson, for Xbox 360 system architecture; and silicon chief Larry Yang — all dictated what Microsoft needed this time around.

They couldn't be late. They had to make hardware that could become much cheaper over time and they had to pack as much performance into a game console as they could without overheating the box.

Trinity Taken

The group of silicon engineers started first among the 2,000 people in the Xbox division on a project that Baker had code-named Trinity. But they couldn't use that name, because someone else at Microsoft had taken it. So they named it Xenon, for the colorless and odorless gas, because it sounded

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