America's Army and Full Spectrum Warrior placed in army "classrooms" stockpiled with Xbox consoles. The more cynically inclined can imagine the system as an effective tool for recruitment: join the Army, get a free Xbox.
However, Microsoft turned down the Army's offer, according to the Army's Roger Smith. He told Wired that Microsoft was concerned about the cost associated with the sale. The Army would be unlikely to buy more than one or two games for each system, thereby reducing Microsoft's chances of recouping the costs of subsidized Xbox hardware. In addition, Microsoft was afraid of a PR backlash. Smith recounts a Microsoft rep's worries: "Do we want the Xbox 360 to be seen as having the flavor of a weapon? Do we want Mom and Dad knowing that their kid is buying the same game console as the military trains the SEALs and Rangers on?" With games remaining an easy target for mainstream media, their concerns seem warranted.
Since then, the Army has lost interest in pursuing a deal with Microsoft. "Our initial enthusiasm when Xbox and XNA were new products has cooled. At this time we have no active or anticipated projects or R&D that are looking at using either of those products for military simulations," Smith told Wired. Perhaps the Army is pursuing a different option: buying PS3s en masse ... or maybe they're simply waiting for Halo Reach?