The Xbox did not play DVDs at launch. This was because the Xbox used the Dolby Interactive Content Encoder for encoding multichannel audio into Dolby Digital 5.1. While this was great for game audio, this was a problem as Microsoft would have to pay licensing for 5.1-encoded DVD movie/audio playback. They would have had to pay the Dolby license for EACH Xbox console if they wanted it to play DVDs out of the box, which would have increased the console's price and would have made them look worse compared to Sony's PS2. The solution was that they pushed the licensing cost from the original Xbox to the Xbox DVD playback kit, which was a remote and dongle that had the Dolby license and would enable your Xbox to play DVDs.
This had actually turbo fucked the original Xbox because while the Xbox DVD playback kit was only $20, it was still an additional purchase on top of the $300 console price. The Xbox DVD playback kit was seen as an accessory so a lot of people didn't know the Xbox could play DVDs and Microsoft couldn't advertise their console played DVDs without saying "and be sure to give us $20 to play DVDs". The people that knew the Xbox could play DVDs just saw it as Microsoft being greedy. Meanwhile Sony had heavily marketed the PS2's ability to play DVDs right out of the box.
And for forcing me to write all this, I would like to leave you retards with this bit of advice