Xbox Case Study

Xbox Case Study
The very first announcement about the Xbox, given by Bill Gates, sounded like he was a bit mad, crazy, or delusional. No one exactly knew what to make of the announcement. Yet despite the feelings of many, Microsoft plowed ahead and after five years, changed the video game industry radically.
The machine would be a called a PC in a box, and would claim to be three times more powerful than the PS2. The transformation would change the way the market would view and purchase electronic entertainment. Despite speculation of the Xbox appearing as just another box that will set on top of and plug into a television set, the Xbox proved far more superior to the competition. The Xbox was to contain a processor that was originally listed as 600MHz, but later increased to 733MHz, and contain Windows programming.
If that was not enough, just four years after the original release of the Xbox, in November 2005, preparations for Xbox 360 was made. The Xbox 360 was created to surpass the performance of the original Xbox. Lifelike graphics would run on a high definition game. An increase in demand for the new system was expected to be extremely heavy. Keeping up with production to meet the demand would prove to be a tremendous challenge.
Microsoft after losing billions of dollars on the Xbox, and being criticized by users about the large and bulky design, decided to change strategies. They planned on keeping their existing suppliers for EMS, for the initial requirements, Wistron, and Flextronics would fulfill, and the third would come from a new facility in China named Celestica. The original Xbox was designed in-house, but Microsoft found that outsourcing the new Xbox 360 they could produce a smaller less bulky design. Microsoft was also able to barter down the price and keep it within the range they wanted to sell the unit. Astro Studios met the needs of Microsoft, and won the bid.
Contracts with the chip makers so Microsoft could own the designs were...