Triumph at E3
The Xbox conference unfolded during the opening ceremony of E3—the Electronic Entertainment Expo—and official sales launched that same day across North America, uniting the United States and Canada, as well as in Korea. Although the Xbox project had wrapped up well ahead of its final deadline and at the perfect moment, a simultaneous global release remained unrealistic. Electronic devices required passing rigorous radio certification standards, and Europe in particular imposed exceptionally strict criteria while moving at a glacial administrative pace. Moreover, ID Group's top priority markets were the United States and Korea, so the console debuted first in those two nations, with sequential rollouts planned for other countries as conditions allowed.
From the following day onward, the mass media poured forth favorable reviews of the Xbox. Part of that success came from ID Group's tireless PR department, but the most important factor was that the Xbox itself had been built to surpass its competitors. This allowed the publicity team to carry out their core duties with far greater ease. Different outlets emphasized different strengths depending on their editorial leanings. The most frequently mentioned feature was, naturally, its raw power. When laid out in numbers, the comparisons became crystal clear. As a result, the common understanding quickly took root that while the Xbox stood shoulder-to-shoulder with the PlayStation 2 in price, its performance led by at least fifty percent.
Next came the flood of discussion around Doom 3, Halo, and Tekken Tag Tournament HD. After all, a console's true worth lay in the games people could actually play. This was the one area where the PlayStation 2 currently held an edge. The Xbox had launched early, while the PlayStation 2 arrived three months later, aligning their release dates. Those extra three months had given the PlayStation 2's first- and third-party developers ample preparation time, resulting in a healthy slate of simultaneous titles. Yet in North America, the Xbox refused to yield ground. The national phenomenon that was Doom 3 and the brand-new franchise Halo possessed such overwhelming presence that they devoured the competition.
Browsing gaming internet communities revealed that conversations revolved overwhelmingly around Doom 3 and Halo. And the clearest proof that this buzz extended far beyond niche forums came in the form of sales figures. On the very day E3 opened, anyone who wanted one could walk into a store and take an Xbox home. For $299.99—three $100 bills bearing Benjamin Franklin's portrait—customers could purchase the complete package. Inside the box were the console itself, the power adapter, various cables, and a single controller. Game DVDs retailed for $55 each, while an additional controller for two-player action cost $49. All told, adding one game and a second pad pushed the total just over $400.
The hardware price matched the competition, but game prices had risen slightly from the previous generation. In his first life, when the original Xbox had looked far more rugged, Halo launched at $49.99. This time, the massive spec upgrade meant the company needed to generate more revenue from software, forcing a modest price increase. For every $55 game sold, ID Group received $12 in royalties, the developer took $25, and the remaining $18 covered distribution margins. These figures included taxes, so actual net profits were somewhat lower.
Most buyers purchased the console with a single game, but a surprising number grabbed all three launch titles at once. Though $55 per game felt expensive, it remained far cheaper than building a comparable PC gaming rig. Furthermore, the Xbox's primary audience consisted not of teenagers but of men in their twenties through forties—adults with solid purchasing power who opened their wallets without hesitation. Thanks to this, the Xbox easily moved one million units on its first day. The explosive initial surge eventually moderated, yet steady sales continued. By the end of the launch window, the console had approached two million units sold. At this pace, analysts predicted ten million units by year's end would be perfectly achievable.
Unfortunately, each unit sold at a loss in these early stages, meaning higher sales translated directly into greater short-term deficits. Still, the attach rate for game titles had exceeded expectations, sending a positive signal that the company would reach profitability sooner than forecast. Not everything, however, was rosy. The PlayStation 2 remained a formidable rival that refused to be underestimated.
“Hmm. The PlayStation 2 is performing even better than anticipated.”
Priced identically at $299, the PlayStation 2 maintained formidable momentum. According to the market trend report delivered to Yoo Jae-won, its sales had outpaced the Xbox. While the Xbox had moved nearly two million units in its first week, the PlayStation 2 had comfortably surpassed that figure. Retail POS systems remained fragmented, making precise statistics difficult to compile, but these numbers came from indirect verification through distributors using ID Group's own POS infrastructure. In stores, the PlayStation 2 was indeed selling more briskly than the Xbox. The same pattern appeared in Next Trend, ID Group's internet trend analysis tool. Search volume still favored PlayStation-related terms.
Beyond the PlayStation's solid sales, another landmine had suddenly been triggered.
These were familiar arguments in Korea, yet the articles had not originated there. When asked which country harbored the most negative attitudes toward games, Korea would top most lists. Yet these scorching new pieces had come from the United States. Many Koreans, fed on American movies and television, imagined the United States as an exceptionally open and free society. In reality, America proved surprisingly conservative. The lightning rod of controversy was, of course, Doom 3.
Doom 3 dove headfirst into the aesthetics of violence, displaying its destructive beauty through visceral visuals. Dismemberment was standard fare; finishing moves included clean decapitations, spine-ripping, and heart extraction. The Xbox's powerful graphics rendered these scenes with shocking realism. When connected to the world's finest display device—the Tour Cinema Display—the game ran at thirty frames per second while delivering full-HD visuals of unparalleled brutality. Still, because the targets of the Doomguy's rampage were not humans but demons risen from Hell, ethical debates had largely been absent. At worst, internet memes joked that the demons were the real victims.
Yet to America's conservative voices, the excessive violence remained problematic regardless of its demonic targets. “I wonder when public perception of gaming will finally improve,” Yoo Jae-won muttered, feeling a quiet stress despite knowing these critics represented only a vocal minority. After all, Doom 3 had received the ESRB's Adults Only M rating. Blood and severed limbs were entirely within bounds. The real issue was the self-appointed moral guardians who insisted on interfering anyway. People who believed such things should simply protect their own families rather than attempt to police everyone else's entertainment.
Sony, meanwhile, positioned the PlayStation 2 in direct contrast to the Xbox, marketing it as a console for the entire family. Looking at the simultaneous launch lineups, the PlayStation 2 indeed offered many cute and casual titles alongside its mature offerings. Those buying a console for themselves often chose the Xbox, but parents shopping for their children reached for the PlayStation 2 first. Of course, the PlayStation 2 had its share of blood-soaked games too. Sony simply chose to emphasize the family-friendly angle while still releasing adult titles. Yoo Jae-won understood Sony's strategic maneuvering perfectly, yet he had no desire to copy it.
“At least Korea remains relatively quiet about all this.”
The situation had indeed played out differently this time. Korean outlets had reported on the American violence controversy, but their tone suggested mild curiosity rather than agreement. “It seems advertisers still sit above sponsors,” Jae-won observed with a wry smile. The broadcasting and newspaper industries' favorable response made perfect sense; they were currently under an unprecedented carpet-bombing of advertising tied to the Xbox launch. ID Group's annual marketing budget in Korea had long surpassed the trillion-won mark. From image campaigns to detailed product spots, every channel had focused exclusively on one item since June: the Xbox. Newspapers and broadcasters alike ran relentless ads for the console and its exclusive games.
As a result, the Xbox enjoyed far greater popularity in Korea than the PlayStation 2. It also possessed an advantage the competition lacked—complete Korean localization. Being able to enjoy everything from the operating system to the games in one's native tongue proved an unbeatable strength.
“And we still have two trump cards left.”
Yoo Jae-won had prepared two special measures to counter the PlayStation 2. The first was the media hub concept. At this stage, both the Xbox and PlayStation 2 suffered from the same serious limitation: too few games. The PlayStation 2 had roughly ten titles, while the Xbox offered only three. Ten games might sound substantial, but half were puzzle or casual experiences, leaving just five true AAA experiences. Creating games worthy of next-generation hardware required developers to scale up teams and invest far more capital. Simple pixel-art 2D titles had migrated to the indie category. Modern games now demanded high-polygon modeling, high-resolution textures, and massive rendering farms for CG cutscenes. Naturally, development cycles had lengthened, meaning few AAA titles could launch at release.
The gap was filled by media playback capabilities. The standout format was DVD. CDs had claimed the next-generation mantle in the mid-90s, but their glory proved short-lived. DVDs, offering longer playtimes and superior image quality, had sparked an immediate revolution. Yet DVD playback required considerable processing power—especially since Jae-won's influence had pushed the default codec from MPEG-2 to H.264-level high definition. While picture quality had soared, both encoding and decoding now demanded significantly more computational muscle. DVD player prices had risen accordingly. Jae-won had released the high-definition video codec for free, which helped ease the burden somewhat, but ordinary profit-driven companies raised prices whenever they could justify it. Premium players exceeded a million won, while even budget models topped five hundred thousand.
In that environment, a machine capable of playing DVDs at a price of $299—roughly three hundred thousand won—drew enormous attention. When respected AV magazines tested the Xbox's DVD capabilities alone, it earned rave reviews for surpassing million-won dedicated players in both picture quality and convenience. For married men who wanted to game, the DVD function provided the perfect justification when persuading their wives. Still, the PlayStation 2's DVD playback also outperformed most dedicated five-hundred-thousand-won players, so Jae-won needed another decisive advantage. That advantage was Timeflix.
Until now, there had been only two ways to access Timeflix: subscribing to Time Warner Nextcom's cable television service, or visiting the Timeflix website on a PC. A third option had now arrived. One of the apps preinstalled on the Xbox's operating system was Timeflix itself. Because the console included a built-in hard drive, simply turning it on without a game disc greeted users with the familiar Android OS desktop. The Timeflix app sat prominently among the icons, complete with a three-month free trial code. Timeflix was already spending heavily on promotion anyway, so bundling the trial made perfect sense. Depending on settings, the Xbox could even be configured to boot directly into Timeflix. While the console primarily used a joystick for navigation, an optional remote control transformed it into a perfect streaming device.
“The living room will belong to the Xbox,” Jae-won thought, his ambition laid bare. He had no intention of declaring it as bluntly as Microsoft had in his previous life, of course. No matter how powerful he became, trying to forcibly claim every family's living room would only breed backlash. His true strategy was to let media hub functions—DVD playback and Timeflix—seep naturally into daily life.
“Which is why we need LCD TVs.”
The second trump card Jae-won had prepared was LCD HDTVs. On traditional CRT televisions, the visual difference between the Xbox and PlayStation 2 remained relatively subtle. Connect them to an LCD, however, and the gap became painfully obvious. His second major plan involved mass-distributing LCD HDTVs worldwide, using the 2002 World Cup as the launching pad. It might seem like the tail wagging the dog, yet attacking the HD-challenged PlayStation 2 while simultaneously conquering the next-generation display market made it the single most powerful card in his deck.
To that end, ID Electronics was diligently researching HDTV and HD broadcasting systems, while ID Display continued smooth progress on production line expansion and process improvements for large TV panels. If everything proceeded as smoothly as the Xbox project, mass availability of thirty-inch LCD televisions could begin by next summer or fall.
“Whew. That should wrap up E3, then?”
Stretching, Yoo Jae-won checked his email inbox and ID Talk messages. The ID Display status report he'd just reviewed had been the last item. With the successful Xbox unveiling at E3, every major objective for the first half of 2000 was now complete—save for one. A strange, indescribable feeling washed over him. The final remaining task was his wedding to Tiffany.