The Xbox is Microsoft's game console, released in November 2001. It is Microsoft's first independent venture into the console arena, after having collaborated with Sega in porting Windows CE to the doomed Sega Dreamcast console. The price is currently 149 USD, 199 EUR or 129 GBP. Notable Xbox-exclusive titles that debuted with the console include Amped, Dead or Alive 3, Oddworld: Munch's Oddysee, Halo and Project Gotham Racing.

Microsoft built the Xbox around industry-standard PC hardware, in contrast to the traditionally proprietary design of nearly all gaming consoles. It has an Intel Pentium III-derived processor clocked at 733 MHz and an nVIDIA graphics processor. The processors share 64 MB of system RAM. Storage includes a DVD-ROM drive and a hard disk. Although the Xbox is based on PC architecture and runs a stripped down version of the Windows 2000 kernel it incorporates security features designed to protect it against uses not approved by Microsoft. As the console business model essentially involves giving away the hardware at cost and making profit on game licenses, this is understandable. It did not take long, however, for the hacker community to circumvent these limitations and get the Linux operating system running on the Xbox, thus making it usable as a fully featured PC. Critics have speculated that the Xbox is Microsoft's attempt to monopolize yet another technology market. As of November 2003, estimates show the Xbox's share of the global console games market has fallen behind the GameCube's and is far behind the PS2, considering that it only has a strong market in the U.S. and Europe, and it's competitors are strong in the U.S., Europe, and Japan. In March 2004, Microsoft cut the price of the Xbox in several countries which has substantially increased its sales outside of Japan. The Xbox has yet to return a profit for Microsoft. This is in-line with Microsoft's original assessments, however, as they predicted that they would not make a profit on the Xbox for at least three years after its debut. In 2002, Microsoft released the successful online gaming service "Xbox Live" which has become the de facto standard for online gaming on consoles. Third party services for online play also exist. In January 2004, Microsoft reported that Xbox Live reached 750,000 subscribers. Xbox Live received a major boost in May 2004 when Electronic Arts announced it would support the service for the first time. As it is essentially a PC, a thoroughly dated jab at the Xbox is its large size and weight compared to other consoles. It was rumoured that buyers were advised that they not be placed on top of televisions (as consoles in the past often were) in case a small child slipped on a cord and set it crashing down on their heads with serious injury.