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Today, we wrap up our discussion of the console wars by taking a look at Microsoft’s Xbox which was announced in 2001. The early 2000s saw a lot of innovation in hardware and games and we’ll cover some of that, but one significant change that would heavily influence the industry was actually pioneered by that doomed Sega Dreamcast was Internet connectivity. Sony’s Playstation 2, released in 2000, and Nintendo’s GameCube, released in 2001, would also include ways to get online, but Xbox’s implementation of a fully unified network that allowed gamers to compete across consoles was the first of its kind. Now, PCs gamers had been playing across networks, particularly within the popular MMORPG genre, since the mid 90s and we’ll spend a couple episodes taking a closer look at the PC's influence, but today we’re going to focus specifically on how the Internet on consoles helped lead to the prevalence of the competitive gaming and online gaming communities we see today.

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Hi, I'm Andre Meadows, and this is Crash Course: Games. So we close out the 1990s with the Sony PlayStation leading the market and Nintendo the only other real contender, and by 2001, following the commercial disaster of the Dreamcast, Sega had completely exited the console industry. But as one company stopped making consoles, a new company took its place. Microsoft was about to enter the market, and gaming was about to get connected to the internet. Whew! Good thing we survived Y2K for that.


In March of 2000, Sony, who was already dominating the market, released the PlayStation 2. The system itself was light-years ahead of its predecessor. It was a 128-bit system and stored its games on DVDs and CDs. It also had backwards compatibility, which meant that it could play the large library of existing software from the original PlayStation. A common problem in the industry is game mortality, when technology evolves and players are left with a bunch of old games they can no longer play. Publishers might rewrite or port some old games to the new systems, but for the most part, people had to keep their old consoles or just live without playing their beloved copy of NASCAR Thunder 94. The PlayStation 2's backward compatibility solves this problem and won a lot of consumer approval by allowing players to play new PS2 games while still being able to play their old PS1 games all on the same system.

And the switch from CD-ROM to a DVD drive was also pretty important. The maximum storage for a PlayStation game grew from 700 megabytes on CDs to as large as 8.5 gigabytes with the new format. This allowed developers to work on longer, richer, and more complex games without having to stretch the game across multiple discs, like they did with Final Fantasy VII. And since the PlayStation 2 had a DVD-ROM in it, that meant you could also play DVDs on it, kinda similar to how on the PlayStation 1, you could play video games or your Backstreet Boys and Spice Girls CDs. It was the 90s. This was the early start of seeing game consoles as more than just game consoles, but full multimedia entertainment devices, and the PlayStation 2 offered a way to connect to the internet, but it wasn't very straightforward.

Consumers had to purchase an adapter and an additional memory card to go online. The servers didn't even have a name in 2002, but it allowed for multiplayer match-ups and additional content within certain games. But as is the way with these things, the tech was pretty cool, but it was the PlayStation 2's games that helped it succeed, games like Grand Theft Auto 3. It was one of the first 3D open worlds. Sure, you could follow the constructed missions, but you were also free to do whatever you wanted. For example, you could just choose to steal cars and listen to the radio, which was sort of like a real radio station with a talk show and licensed albums from real musicians. You could also run away from the cops, beat up random citizens, just do whatever in the game. Don't do this stuff in real life.

But a game where you can do almost anything, and I do mean anything, did have its critics. GameSpy called it the Game of the Year in 2001, and also awarded it the less-coveted Most Offensive Game of the Year award. The ESRB gave it a Mature rating for violence and sexual content, and the game was banned in Australia, where there was no adults only rating, but despite the controversy, it was still the biggest selling video game in the US in 2001, and still makes titles to this day.

The PlayStation 2 would go on to be the best selling gaming console of all time. As of March 2012, the last time Sony released its numbers, it had sold over 155 million units, and its library of games - more than 1,900 titles. And the PlayStation 2 console was an active product that Sony supported for nearly 13 years, making it one of the longest lived consoles of all time. In fact, the last server on the PlayStation 2 was shut off this year, 2016.

So the PlayStation 2 was a pretty big deal, but it was about to get some major competition. In January of 2001, Bill Gates and Dwayne "The Rock" Johnson debuted the Xbox at the Consumer Electronics Show. Microsoft's console the Xbox was the first by an American company since the sales of the Atari Jaguar stopped in 1996, and the Xbox made all the standard technological improvements - building a faster, higher capacity machine than the previous consoles. But it was that integrated Ethernet port and the network that Microsoft would launch that led to some significant changes, both inside and outside the console industry. Let's go to the Thought Bubble.

Microsoft had designed its Xbox with a plan to move online, which is exactly what it did on its one year anniversary. In 2002, Xbox Live launched, and more than 150,000 subscribers signed up in its first week. The system was a unified network, where players could connect and compete with other players all over the world. Players could speak to each other and coordinate strategy with a new voice chat system. The network also allowed them to download new maps and other content for their games.

Microsoft released its Xbox with Halo: Combat Evolved. It was a critical and commercial success. By 2005, the game had sold over 5 million copies worldwide. Video game journalist Steven Curran called it, "The most important launch game for any console ever," and that it surpassed GoldenEye as a new standard for multiplayer combat.

But Halo launched before Xbox Live was finished and would never support online multiplayer matches, but it did support a feature called System Link, which allowed players to connect up to four consoles together like a LAN network, like PC users had been doing for years, to have up to 16 player death-matches. But Halo 2 launched in 2004 and delivered on the promise of Halo's great multiplayer experience and the potential of the Xbox Live network. Halo 2's system was pretty great at matching players against other gamers with similar skill levels, and the game was really designed for online multiplayer. With this online matchmaking, players had the chance to get good, like, really good, and some of these players would eventually take part in the first US Professional League of Major League Gaming, which hosted its first televised league tournament in 2006, playing Halo 2. Thanks, Thought Bubble.

So professional gaming, or electronic sports, or e-sports, were on the rise all over the world, with the help of online multiplayer from PCs and now also from Xbox. But at the same time, Microsoft was making some games for players who didn't want to pay that monthly subscription, or just wanted the single player experience, like 2004's Fable. Fable included a morality alignment system that encouraged players to make moral choices within the game.

Completely opposite from Grand Theft Auto 3, players' decisions in Fable now had real consequences, and the choices to help or hurt non-player characters in the game would be reflected in the on-screen character appearance, and the non-player characters definitely remembered if you murdered someone in their town. They were less likely to help known thieves and killers.

Meanwhile, Nintendo had its own entry in this console war: the Nintendo GameCube. It debuted in 2001 and it was the first Nintendo system to deliver its software on discs rather than cartridges. But instead of using standard 5 inch DVDs like Microsoft and Sony, Nintendo chose the unusual mini-DVD format. Look at you, you're so tiny. Now these discs couldn't hold as much data as DVDs, but they did make piracy more difficult for Nintendo games, and like Sony, the GameCube supported limited online gaming with an adapter. Nintendo's next console, the Wii, would have a few games with online multiplayer, but Nintendo would not fully adopt an online service like the Xbox until the Wii U console in 2012. But we're just talking home consoles. Nintendo also developed the DS handheld system in the early 2000s. The Game Boy had been around since 1989, there had been several evolutions of the handheld platform, like the Game Boy Color, Game Boy Advance, Game Boy SP, but it was the DS, or Dual Screen that was revolutionary.

The top screen displayed the games, while the bottom was a touchscreen, which allowed developers to include novel control schemes in their titles, and it supported Wi-Fi, continuing the trend toward connected gaming, and Nintendo had one more major exclusive that debuted in 2001 on the GameCube: Super Smash Brothers Melee! The four player free for all fighting game was a vast improvement to the Nintendo-64 original, with more Nintendo fighters and a finely tuned and balanced fighting mechanic system. Melee was so well-received that it would become a standard in professional gaming, and these tournaments, like the FPS tournaments of Halo, were indicative of a larger shift in the industry.

So whether playing in groups at gaming tournaments or LAN parties or playing at home online, more and more gamers were being connected with and playing real players. Players were getting more competitive and forming massive communities within these games, and we'll get into this a little bit more when we talk about MMORPGs, but this internet access was giving players and gamer culture a new home.

Thanks for watching, we'll see you next week, and make sure you pay your internet bill so you can keep watching this show and playing those games.

Crash Course: Games is filmed in the Chad and Stacey Emigholz Studio in Indianapolis, Indiana, and it's made with the help of all of these nice people. If you'd like to keep Crash Course free for everyone forever, you can support the series at Patreon, a crowdfunding platform that allows you to support the content you love. Speaking of Patreon, we'd like to thank all our patrons in general, and we'd like to specifically thank our High Chancellor of Knowledge, Morgan Lizop and her Vice Principal, Michael Hunt. Thank you for your support.