Microsoft’s marketing department hated the name Xbox so much they put it in focus groups only as a control variable to prove how bad it was, and it won. Employees called the project the coffin box because they thought it would end their careers. This episode traces how the original Xbox was born from Bill Gates’ fear that Sony’s PlayStation 2 would replace the Windows PC in the living room, and how an internal civil war between the WebTV team’s cheap Windows CE appliance and the DirectX team’s PC-in-a-box was settled in a May 1999 pitch meeting.

We cover the Valentine’s Day Massacre of February 2000, when spiraling costs and a stripped-down Windows nearly got the project killed, the decision to include an 8 GB hard drive and a broadband Ethernet port when most homes used dial-up, and the supply-chain failure behind the oversized Duke controller. From there it’s the November 2001 Times Square launch, a console that cost $425 to build and sold for $299, a $4 billion overall loss, fewer than half a million units sold in Japan, and why historians still call it a success thanks to Halo, Xbox Live, and a modding scene that turned the box into a media center.

• How the WebTV and DirectX factions fought over the design and why Gates chose PC architecture to win developers
• Why the Duke was so large: Mitsumi Electric refused to build a folded circuit board for an unproven Microsoft console
• The launch math: 1.5 million units sold by year’s end while losing $125 per console, worsened by the April 2002 price cut to $199
• How Halo legitimized console shooters and Xbox Live grew from 100,000 subscribers in its first week to 20 million by 2009
• Andrew Huang’s boot ROM crack, save-file buffer overflow soft mods, and how Xbox Media Center evolved into Kodi