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Microsoft established and owns the Xbox video game franchise. The Xbox brand encompasses five video game consoles, as well as apps (games), streaming services, an internet service known as Xbox Network, and the Xbox Game Studios production arm. With the release of the original Xbox system in November 2001, the brand was first promoted in the United States.

After the Atari Jaguar was discontinued in 1996, the original device was the first video game system provided by an American corporation. As of May 2006, it has sold over 24 million units. The Xbox 360, Microsoft’s second system, debuted in 2005 and has sold 84 million copies as of June 2014. The Xbox One, which was introduced in November 2013 and has sold 46.9 million copies as of October 2019, is the third console. The Xbox Series X and Series S, the fourth and fifth consoles, were introduced in November 2020. Phil Spencer is the current CEO of Xbox, having taken over from former CEO Marc Whitten in late March 2014.

Sony Computer Entertainment positioned the PlayStation 2 as a centerpiece for home entertainment when it was initially launched in 1999, as it could not only play video games but also music CDs and video DVDs. Microsoft, whose Windows operating system, software, and games were largely designed to assist the personal computer (PC) industry, perceived the PlayStation 2 as a danger to the PC.

Kevin Bachus, Seamus Blackley, Ted Hase, and DirectX team head Otto Berkes, four engineers from Microsoft’s DirectX team, began to imagine what a Microsoft system to compete against the PlayStation 2 might be like. They devised a system that would make use of several PC-like hardware components, effectively running a version of Windows and DirectX to power the console’s games. This technique would make it simple for Windows developers to create games on their new system, setting it apart from other consoles’ proprietary hardware solutions. The names “Direct X Box” and “Windows Entertainment Project” were among the suggestions for this console. Microsoft’s marketing team performed customer polls, using the name “Xbox” as a control since they thought it would be the least preferred, but they discovered that this had the greatest preference in their testing and was chosen as the console’s name.

The change of Microsoft Studios to Xbox Game Studios in 2019 reflects Microsoft’s recent efforts to use the branding of “Xbox” beyond the console hardware and as a generic video game brand. In June of this year, Microsoft’s Phil Spencer noted that “It’s not about how many consoles you sell in this business. The business is based on how many people play the games they buy and how they play them “which has been used by journalists to de-emphasize console hardware and place a greater emphasis on games, subscriptions, and services for consumers. Later in February 2020, Spencer stated that, in the future, the firm does not view “conventional gaming firms” such as Nintendo and Sony as competitors, but rather cloud computing businesses such as Amazon and Google. Microsoft Azure, which powers its xCloud game streaming service, is a big component of their future ambitions, according to Spencer. Spencer also mentioned mobile gaming as a possible area where Microsoft is positioning itself with its services if this becomes the preferred form of gaming. In outlining how Microsoft was conceptualizing the Xbox identity for the future, Spencer stated, “I don’t believe it’s ‘hardware agnostic’ as much as it’s ‘where you want to play.”