After Peter Moore killed the Dreamcast (damn him!) and fired a buncha people (ouch), he was feeling down. Moore was sick and tired to trying to convince SEGA Japan that it needed to hire foreign developers because the Western market was starting to really take off. Good thing Microsoft exec Robbie Bach called Moore to wish him Merry Christmas and offer him a j-o-b at Microsoft. Moore met with Microsoft to meet with Microsoft sweaty man Steve Ballmer to talk about going head-to-head with Sony. Nintendo, it seems, didn't even enter the equation. According to Moore:
So in January (2003) I flew up there and had lunch with Steve Ballmer and you don't say no to Ballmer. We had a great lunch and he convinced me that Microsoft was going to take on Sony... He wanted my attitude, he didn't care what I'd achieved at SEGA, he wanted to know how I was going to win for Microsoft, how we were going to take on Sony, how would we compete with — or acquire — Nintendo. Those were the conversations in those days. It was a classic build or buy conversation. Xbox had launched but it was an aggressive black box for shooters, and how do we evolve that, how do we build the next Xbox, how do we get after Sony? Interestingly, we were just completely fixated on Sony — Nintendo didn't even come into the conversation.
But Steve was very compelling, particularly when you're one-on-one with him in his office — we talked about what we'd done to compete with Sony, where I felt their weaknesses were. But the bigger picture for Steve was, we need to get into the world of consumer entertainment. There's a role for Microsoft to play, we truly believe in Xbox as being something that can... there was a little bit of a concern with Sony — we wanted to keep them out of the living room, from a software and services perspective. And then I started work at Microsoft on February 1 2003.
Ah yes, those were the days. Before the tattoos and the blinking red lights and the winning waggle.