Dean Takahashi has released some Microsoft internal e-mails that summarize the outcome of the fateful meeting where the Xbox team and the WebTV team submitted their competing proposals to Bill Gates. This meeting would help decide who would go forward and do the research to get Microsoft’s game console built. Gamers can thank their lucky stars that the Xbox team was chosen; how the decision went down is summarized in the leaked e-mails.

Basically, there were two approaches suggested. The first option was that Microsoft build up the WebTV platform, based around WinCE. The other scenario would have Microsoft scaling back the PC to get something that was focused specifically on gaming. Bill Gates clearly favored the PC-based solution. His belief at the time was that eventually, PC and console prices would converge; both would reach $199. For a time, heavily subsidized PCs did reach $199, but that is hardly commonplace today. Most “low end” PCs hover around the $350 price point, but cannot match the graphics capabilities of the Xbox 360.

It is interesting to note what ideas suggested in the 1999 meeting made it into the original Xbox, and what would have to wait. Even as far back as this early planning stage, Microsoft was imagining game console configurations with and without a hard drive. Also, the “tax” on peripherals that Bill Gates was looking for in the original Xbox would really not develop until the Xbox 360.

Other interesting tidbits: Intel was the first original hardware vendor to talk to. While Microsoft dallied with AMD for a while, eventually, the Xbox did get the Intel CPU. Of course, both chip vendors lost out on the sequel, with IBM getting the nod. Microsoft also plans to string Sega along until they can announce the Xbox, pimping the Dreamcast while secretly seeking alliances with other partners for their own attack. Ultimately, Microsoft appeared to be afraid of the inroads that Sony was making. According to Microsoft, their “goal needs to be to contain Sony and to focus on a duopoly.”