I quite clearly remember Microsoft execs (mostly J Allard) talking about their serious ambitions for the first Xbox to reach 100 million in sales, that they saw the games market as financially lucrative, and that they could beat Sony to the punch at being the future multimedia supplier under the television. All fairly reasonable ambitions considering the effort, positioning, investment and people involved.
Of course they failed on all three counts. Miserable market penetration, Catastrophic losses, and not a dent on Sony's space. It's nice to paint it like the 2-console cycle was their plan all along, but that's the power of media spin on hindsight. There are certainly records about detailing Microsoft's financial expectations: only 900 million lost over the first two years with profits therafter as opposed to 4 billion losses over 4 years etc.
Consider this: Would 360 be doing any worse right now if the original Xbox never existed? In Japan it would almost certainly be doing better.







