The new Xbox documentary series called Power On: The Story of Xbox briefly discusses the huge success that was Grand Theft Auto 3 in 2001, and also explains why the game never ended up on Xbox until a few years later.
As revealed by former Xbox Director of 3rd Party Relations Kevin Bachus, Microsoft was approached by a "small game publisher" (Rockstar Games) who wanted to "really invest" in turning their 2D series of games into a 3D experience. Of course, this ended up being GTA 3, which went on to become the top-selling game of 2001.
Unfortunately, Microsoft decided to turn it down. Drew Angeloff, who worked for Xbox between 1999 and 2004 (and later returned in 2008), highlighted that a group of "newly important executives at Xbox" (revealed to include the 'Father of Xbox' Seamus Blackley) felt GTA would struggle to make the transition from 2D to 3D, amongst other things.
Angeloff: "These newly important executives at Xbox, who would review all the pitches from publishers and developers, they said 'I don't think that game is going to be able to make the transition from 2D to 3D'."
Bachus: "They felt that it was complicated, they didn't really understand the user interface, they thought that it was based on a game that hadn't been all that successful. To my surprise, it was rejected."
As a result of this, Grand Theft Auto 3 became a PlayStation 2 exclusive at launch and went on to be an absolutely massive hit — but it would eventually find its way to Xbox along with Vice City and San Andreas in the mid-2000s.
The damage was done by that point though, and the Xbox brand missed out on potentially a huge chunk of sales and new players as a result. Imagine if GTA 3 was an Xbox exclusive?! How different things might have been...
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