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XBox (Games) Microsoft Entertainment Games

A History of the Xbox Red Ring of Death Fiasco 230

Posted by Soulskill
from the defective-by-what,-now? dept.
VentureBeat has a lengthy story about the situation surrounding the Xbox 360's "Red Ring of Death." It starts with the developmental phases for the 360, looks at the marketing decisions that drove Microsoft to aim for a release ahead of the PS3, and talks with sources and engineers within Microsoft about what could have been done to prevent the problems. Quoting: "Leading up to the launch in the fall of 2005, the number of defective units would soon grow to tens of thousands. Any other consumer electronics company would likely have postponed a launch with such low yields. But Microsoft had more money in the bank than anyone else. The decision this time would fall to Bach and Moore. The costs of launching with low yields -- where you take big losses on every product sold -- could bankrupt other companies. But Microsoft could afford to do so. Microsoft did delay the launch date from October until November. But some inside the company still believed returns would be out of control."
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A History of the Xbox Red Ring of Death Fiasco

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  • by suck_burners_rice (1258684) on Friday September 05, 2008 @09:03PM (#24897001)
    I'd appreciate it very much if someone could please explain to me, how is it possible that one company sells something at a loss and it's called "dumping" (which you can get in trouble for, IIUC), and another company sells something at a loss and it's called a "loss leader?" Wtf? It's especially clear in this case, when you have orange rings of death and whatnot, that the purpose is to bankrupt the competition by selling yours for less. By the time someone spent their Christmas money on one product, they won't buy the other. Hence, dumping.
    • Re: (Score:3, Informative)

      by Scaba (183684)

      Have you tried Googling the word "dumping"? Because the first link explains it.

    • Re: (Score:3, Informative)

      I'd appreciate it very much if someone could please explain to me, how is it possible that one company sells something at a loss and it's called "dumping" (which you can get in trouble for, IIUC), and another company sells something at a loss and it's called a "loss leader?" Wtf?/quote

      As I recall, 'dumping' is when you sell a product considerably more cheaply in one country than in another. For example: If Sony sold the PS3 in the US for $200, but the equivalent of $700 in Japan, that'd be 'dumping'.

      Hopefully for both of us, my memory is correct. ;)

      • by lysergic.acid (845423) on Friday September 05, 2008 @10:02PM (#24897399) Homepage

        i don't think that is what's usually meant by 'dumping'.

        although it does seem to primarily refer to predatory pricing in the context of international trade, it's not when you sell something cheaper in one country than in another. it's simply when a product manufactured in one country is being exported to another country at a price below cost or below the market value in its home market.

        as with most forms of predatory capitalism, its legality is fuzzy and often what one nation preaches is not what it practices--particularly western nations which like to tout the virtues of "Free Market" capitalism, such as the U.S.

        so if a U.S. corporation wanted to dump products on another nation, they would condemn any protectionist policies which might oppose these actions. but simultaneously, if another country wanted to dump products in the U.S. which competed with domestic industries with powerful lobbies, antidumping petitions would be filed with the Dept. of Commerce.

        things like 'fair value', or the difference between 'dumping' and selling a 'loss leader', are entirely subjective. they're simply used in whatever way most benefits a given group.

        • things like 'fair value', or the difference between 'dumping' and selling a 'loss leader', are entirely subjective. they're simply used in whatever way most benefits a given group.

          Which is why we should make a single international standard, and then sell Bill Gates into sexual slavery!

    • by moderatorrater (1095745) on Friday September 05, 2008 @09:13PM (#24897071)
      As I understand it, the difference is that a loss leader can legitimately expect to make money indirectly from the sales. Walmart can afford to sell its most popular items at a loss so that other items can be sold for a profit. Microsoft does this with the XBox, where they sell the XBox in an attempt to get more sales for their software.

      Dumping, on the other hand, is selling at a loss so that you can drive the other company out of business and then raise the price of that same item.
    • by nascarguy27 (984493) <nascarguy27@@@gmail...com> on Friday September 05, 2008 @09:25PM (#24897137)
      "If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be "dumping" the product." --from Wikipedia [wikipedia.org]

      "A loss leader...is a product sold at a low price to stimulate other, profitable sales." --from Wikipedia [wikipedia.org]

      The XBOX is a loss leader because people will buy it at its cheap price, then people will want to play the XBOX. Those people will be required to buy games. The games are high margin products. Microsoft makes both so it's all good for them. It's just like with printers and ink or razors and blades. Microsoft would be guilty of dumping the XBOX if they sold the XBOX in say Europe for 20 USD, which I don't think they do.
      • But by your definition, Xbox is neither dumping or a loss leader as it does not make a profit overall. Sure the last few quarters it has managed to make a little bit of profit but overall Xbox is like $7 billion in debt as a product.
      • by Dogtanian (588974)

        It's just like with printers and ink or razors and blades.

        What's the deal with the razors and blades cliche? Nowadays they typically sell the handles with a couple of blades for UK £4-6 (around US $7-11 inc. VAT/sales tax).

        That's not a major ripoff, but it's not especially cheap either. I mean, the "razor" (i.e. the handle!) is just a piece of metal with some rubber grips and a plastic blade attachment. They can't cost that much to make. If they weren't generally one-off purchases, I'm sure they could make pretty decent money by selling these kits alone.

    • by kesuki (321456) on Friday September 05, 2008 @09:26PM (#24897157) Journal

      I'll explain the difference, Dumping is when a company sells a product below cost to bankrupt their competitors.

      Loss leaders are when a store sells a product below what they pay to draw in consumers and get sales.

      Clearly the video game industry is rife with corruption and 'Dumping' primarily because hardware makers can subsidize the price of a console with license fees from game developers.

      depend on 'dumpers' like Microsoft to have some very complex bookwork, and possibly some Chinese shell corporations to sell high priced parts significantly below cost, but only to Microsoft.

      there are lots of ways electronics can be sold below price, specifically cell phones and satellite TV boxes, which come with service agreements. but in the cell phone market, you're not locked into a single phone, although each cell provider has their own line of phones... most big players have models for each provider, except in cases where they get more money to be 'exclusive' to AT&T (like the iphone) etc.

      some of this stuff is illegal in many places, but as i said shell corporations are shady and hard to stop. because billionaires often engage in venture capitalism, it's not hard to 'invest' in a shell corporation that's going to go into an exclusive contract to say, sell 40 million $40 dollar parts at $1 a part, and have the initial VC funding of say 40 million dollars, while 'your buddy' makes a cool million cash etc... then let the company go belly up, or keep using the same shell corporation with additional rounds of VC funding...

      • by kesuki (321456)

        doh the math gods kill me again, 40 million $40 parts is more like 1.6 billion dollars. ah well, the general concept is still there.

      • Re: (Score:3, Informative)

        by ucblockhead (63650)

        If the XBox 360 was an attempt at dumping, then it was a completely failed attempt. But given that in the console market, selling the console below cost and making the money up on sales is the historically common way to do things, it's more reasonable to believe that they were selling it as a loss leader like everyone else. This is certainly the way the PS2 was sold. It was a monster hit, and yet hardly drove either Nintendo or Microsoft out of the console market.

        The remarkable thing about the current ge

        • Well sega has been killed off as a console manufacturer and afaict nintendo have survived only by making a sideways move (leaving the traditional "console with best graphics" game and creating what is essentially a completely new market that they dominate).

      • Re: (Score:3, Informative)

        by inviolet (797804)

        I'll explain the difference, Dumping is when a company sells a product below cost to bankrupt their competitors. Loss leaders are when a store sells a product below what they pay to draw in consumers and get sales.

        'dumping' has a specific meaning in economics, and it refers to the practice of selling product in another country at a price far below that country's local cost. This can happen when the seller's country gives him a subsidy that lowers his costs. Tariffs are used to counteract that. A nice exa

    • by sjbe (173966) on Friday September 05, 2008 @10:21PM (#24897513)

      I'd appreciate it very much if someone could please explain to me, how is it possible that one company sells something at a loss and it's called "dumping" (which you can get in trouble for, IIUC), and another company sells something at a loss and it's called a "loss leader?"

      Dumping [wikipedia.org] is a form of predatory pricing [wikipedia.org] under international trade law whereby a product is sold below cost or below market value in the country of origin. Economists sometimes take a more general definition of dumping to mean any kind of predatory pricing but in my experience this is a less common usage. Dumping often occurs when a producer has excess capacity beyond what their home market can absorb so they sell the excess in a different market either to damage current/potential competitors or to gain market share.

      A loss leader [wikipedia.org] is basically a sales promotion. One product is sold cheaply (possibly below cost) with the expectation, but normally not the requirement, that customers will be enticed into buying additional more profitable product(s). The most famous version is the razors and blade model pioneered by Gillette.

      The important difference is that a loss leader isn't necessarily destructive. With dumping there is no attempt at profitability, at least not in the short term. However predatory pricing in general, including dumping, can be very hard to prove. It's quite rare to have clear evidence that dumping is occurring. Furthermore in some countries (notably China) it's not unusual for the government to hold stakes in manufacturing firms. Naturally it is rather difficult subpoenaing records from a state owned Chinese manufacturer so you can sue them for dumping.

    • It's called "dumping" when it's done by someone you dislike, and "loss leader" otherwise.

      For the politically unconnected company, there are three pricing models, all predatory:

      Dumping - lower than competitors
      Ripping off consumers - higher than competitors
      Cartel - the same as competitors

    • I'd appreciate it very much if someone could please explain to me, how is it possible that one company sells something at a loss and it's called "dumping" (which you can get in trouble for, IIUC), and another company sells something at a loss and it's called a "loss leader?" Wtf? It's especially clear in this case, when you have orange rings of death and whatnot, that the purpose is to bankrupt the competition by selling yours for less. By the time someone spent their Christmas money on one product, they won't buy the other. Hence, dumping.

      They're only "dumping" if their business plan doesn't indirectly profit from the sales, thus compensating for the losses in consoles.

      For example, if I'm a gas station across from another gas station, and I start selling gas at $1/gallon in order to get the other gas station to fold, I'm dumping. I'm just losing money, no part of my business plan makes any money back. It's not a "loss leader" for anything else.

      However, with videogame consoles, neither sony or microsoft are losing money in their videogame d

    • It's called "dumping" when it's done by someone you dislike, and "loss leader" otherwise.

      For the politically unconnected company, there are three pricing models, all predatory:

      Lower than competitors - Dumping
      Higher than competitors - Ripping off consumers
      The same as competitors - Price fixing

    • 'd appreciate it very much if someone could please explain to me, how is it possible that one company sells something at a loss and it's called "dumping" (which you can get in trouble for, IIUC), and another company sells something at a loss and it's called a "loss leader?"

      For starters it's not sold. If it were sold you could do what you want with it, mod it to your particular desires, run what you want on it. As it is, it's like buying a record or CD player from one of the 4 big music companies and find

  • Collapse? (Score:3, Interesting)

    by Elektroschock (659467) on Friday September 05, 2008 @09:11PM (#24897053)

    What if the company is just facing the domino effect of collapse because their engineering and management does not work anymore. It makes me depressed to observe all this. [slashdot.org] They were unable to deliver VISTA in time. Customers and hardware suppliers actually hate VISTA.

    They develop a game console with gigantic losses. They develop the next game console as a second choice. Maybe something is broken in their management of development. I mean look, where is the bugzilla server for the xbox?

    Do you remember the story about the lawyer's letter to the parents of the baby killed by an Xbox fire?

    But this Slahsdot post finally reminds us that Microsoft was never different. When we look back there is actually a history of autism in the company but it always paid off in the past. Like Napoleon, an insane leader who did every mistake but for some time he was quite lucky.

  • The future profits that the company once hoped for are now likely to wind up in Nintendo's pockets.

    Right, just like a defective Audi will drive people towards purchasing a Toyota Yaris. Nintendo and Microsoft aren't competing for the same market niche, and apparently the author doesn't realize that. The Wii is for casual gaming, the XBox and PS are for hardcore gaming. Might as well say that peggle is taking sales from Half Life 2.

    The XBox360 is getting a lot of negative press, but I think they made the right call by launching early. They've been able to displace a lot of the negative press by extendi

    • Re: (Score:2, Insightful)

      by Naughty Bob (1004174) *
      You are wrong, at least with regards to my situation:

      I wanted a PS3, but I've got about £1000 worth of PS2 games that I'm not about to give up on (my PS2 just gave up the ghost).

      Having bought a cheap replacement PS2 instead of the backwards-compatible PS3 I'd have liked, I was not well disposed to Sony, so I look to the XBox-

      Just too unreliable.

      I now have a Wii, and love it, but would have probably been happier with a more powerful machine.

      For me, both MSFT and Sony dropped the ball badly.
      • I'm interested in why you didn't buy a backwards compatible PS3. Too expensive for you? Personally I held off on getting a PS3 as long as I could, wasn't till late 2007 that I began to think it was worth getting it in the near future. Then this year, my PS2 Linux kit HD started having issues, so I knew it was only a matter of time. I use mine for Linux, Oblivion, Orange Box, PS2/PS1 games and some media stuff.

        • Re: (Score:3, Interesting)

          by Naughty Bob (1004174) *
          Too expensive, correct- I'm rarely an early adopter, save for a few specific subsets of gadgetry, and who knew they'd slowly lose functionality, rather than gain it?

          On a side-note CronoCloud- How did you play Oblivion on a PS2?

          (Lastly, thank you mods for the +3, Troll above- I feel I've finally arrived)
    • by Chuck Chunder (21021) on Saturday September 06, 2008 @05:08AM (#24899229) Homepage Journal

      Nintendo and Microsoft aren't competing for the same market niche, and apparently the author doesn't realize that.

      Utter rubbish.

      While different consoles do have features that reach out to different niches there remains a huge area of market overlap in which they compete.

      If the Wii didn't exist would MS have sold several million more 360s? Of course they would.

    • Re: (Score:2, Troll)

      by electrictroy (912290)

      >>>The Wii is for casual gaming, the XBox and PS are for hardcore gaming

      If you define "hardcore" as "boring and overly complicated" then you hit it in one. I don't own any of these consoles, but I am leaning towards Wii because it returns gaming to its primary purpose - fun. It's like a return to the classic-era Nintendo, Sega, and Atari consoles, and it's probably the reason Wii rose to #1 worldwide.

      I don't find much fun in reading esoteric manuals & memorizing complicated commands (as is of

    • Right, just like a defective Audi will drive people towards purchasing a Toyota Yaris. Nintendo and Microsoft aren't competing for the same market niche, and apparently the author doesn't realize that. The Wii is for casual gaming, the XBox and PS are for hardcore gaming. Might as well say that peggle is taking sales from Half Life 2.

      While the Wii and the Xbox appeal to different segments of the gaming market, it's a false dilemma to say that a gamer can't purchase both or has to choose between consoles. U

    • by Guppy06 (410832)

      "Nintendo and Microsoft aren't competing for the same market niche, and apparently the author doesn't realize that."

      Have you taken a look at Wii Ware and Xbox Live Arcade recently?

      "The Wii is for casual gaming, the XBox and PS are for hardcore gaming."

      Yes, that's why Microsoft bundles their Xbox 360 with such hardcore games like Uno and Pac-Man CE, or why their memory cards come with 70-hour gems like Geometry Wars and Worms.

      "The XBox360 is getting a lot of negative press, but I think they made the right ca

  • Interesting timing (Score:5, Insightful)

    by daemonenwind (178848) on Friday September 05, 2008 @09:36PM (#24897227)

    I wonder at the timing of a Xbox-critical article on the exact day the latest price cut hits, bringing the Arcade version under the price of the Wii.

    The first two questions to ask about any news story:
    Why am I hearing about this, and why now?

    It's amazing how much is revealed by these 2 questions.

    • Re: (Score:3, Informative)

      by lanner (107308)

      Well, it does coincide with my personal experience of the Microsoft Red Ring of Death. My XBox 360, bought in late 2006 if I remember correctly, just died a few weeks ago and we recently got the replacement back. Adult-only home, well ventilated and treated properly.

      Units will continue to die for years to come. For us owners, this problem will continue for a long time.

      Most XBox 360 consoles before the recent hardware changes will die with unreasonably short lives. It's just a matter of time. It's a des

      • by elrous0 (869638) *
        Ditto for me. My launch console finally RRODed two months ago. MS did fix it fast, though. Had it back a week later. Guess they're used to it by now.
    • It's amazing how much is revealed by these 2 questions.

      The only thing it reveals to me is that you are probably a conspiracy theory nutbag.

      The day of such a price cut probably is a good day for a bit of a retrospective.

      What would you prefer? That they only reported the price cut? I don't see why simply regurgitating a press release would be the sort of reporting we should wish for.

  • by Frag-A-Muffin (5490) on Friday September 05, 2008 @09:41PM (#24897275) Homepage

    We've seen it time and time again, how Microsoft can afford to buy it's way into a market segment. I wonder if it will pay off in the long run, because it seems they've hit a saturation point with this product they have. Not much growth over the last product revision, and barely making a penny in the last few quarters (let's not talk about making up for all the loses to date yet).

    With the stock price stagnant, how long can upper management convince shareholders that this is the right thing to do?

    • by timmarhy (659436)
      i think MS entering the console market is the best thing that ever happened to it. look at the game selection and how the market has exploded since the xbox. so unless you own ms stock, why would you really give a crap if MS profits or not?
    • Re: (Score:3, Interesting)

      by Dripdry (1062282)

      It depends on emotion. if people *think* the stock is worth the price, they'll hold it or buy.
      Apple is in the same boat.

      I think MS is in a precarious position. If one of their bets doesn't pay off soon (XBOX, Vista, or otherwise) I think they will have a few people to answer to.

      Lowering the price seems like a desperation move, although the system HAS been out for 3 years now.

  • ...right now with their G84/G86 GPUs at the moment. They estimate their losses to be in the range of 100-200 million USD. Dell, HP, ACER, Lenovo, and other laptop makers are affected by this with no end, or resolution for the owners of the units containing the defective chips, including yours truly.
    The failure rate has been measured in either weeks, months or years. Owners of the affected laptops have been buying extended warranties to cover replacement in the event they should fail.
    Dell has acknowledged th

  • My XBOX 360 dis 4 months ago and I bought a PS3, re-purchased all 6-8 games I play (mostly FPS team games, GRAW, COD, RS).

    How do I feel? I feel like using Linux: it is better than windows, but lacking stuff. PS3 is superior (like linux) but it is lacking a strong community feeling like xbox live. It is also lacking the sometimes needed, but sometimes hated strong core (assholes) who play 600 hours a month to be the best in certain games. These are the guys who sometimes hate, but the ones who give a strong

    • by bigstrat2003 (1058574) * on Friday September 05, 2008 @10:28PM (#24897563)

      I do not want to host family parties (nor play mario #122 or other kiddie games)

      First off: Mario is not a "kiddie" game. It's a platformer, but that doesn't make it childish.

      Second: Zelda, Smash Bros, Super Paper Mario, Metroid Prime 3, and Mario Kart are kiddie games? Damn, why didn't someone tell me?

      Are you one of those gamers who defines "kiddie" to be "doesn't include lots of gore and/or swearing"?

      • Re: (Score:3, Insightful)

        by stuboogie (900470)
        Actually, yes. Any game that is rated E and is simple enough for the younger audience to play would be considered a "kiddie" game.

        While many of these games are still fun to play, they provide a completely different gaming experience/style than the type of games the OP is talking about. So, while I like playing games on the Wii, the type of games I enjoy most are not targeted to that console.

        Given a choice of a Wii or a 360/PS3, I would not select the Wii. I think that is the point he was trying to make.
      • Re: (Score:3, Insightful)

        by Gulthek (12570)

        Any game that doesn't deal with adult themes or content is a kiddie game. Not that it's a bad thing.

      • Re: (Score:2, Insightful)

        It's the adolescent equivalent of "family-friendly". Some gamers don't speak political-correctese.

        With all the bombs, smashing stuff, abuse of turtles and evil chestnuts/mushrooms, you'd think Jack Thompson would target Nintendo instead of Rockstar Games. But then, it's done with several doses of humor and Miyamoto-style wit, so no one is offended.

        Well, except the turtles. How dare he strip search them.

        But the blame should be placed on whoever designed the Gamecube (black/white should've been the first colo

      • by dindi (78034)

        I define kiddie games like this:

        There are colorful cartoon-like characters in the game who collect coins which hang in the air, and you are bouncing of huge mushrooms and your enemies are evil turtles and other cartoon animals, plants and persons.

        It is similar to a psychedelic dream, except is is presented in a generally bad resolution and a low but vivid color palette.

        Metrois prime is the only game that made me think of getting a wii until I saw the resolution and the graphics detail, which almost surpasse

    • Consoles? Useless without online play?

      I'm really feeling old. I remember visiting cousins just to play SNES/N64 games with them. =/

      • by dindi (78034)

        I remember hosting lan parties at my house. We were playing anything and everything of the few that allowed to shoot each-other.

        I also remember playing Quake and Counter Strike on a 56K modem.

        Then remember playing on XBOX live with a bunch of strangers. Still community feeling and good laughs.

        Then I go online (with the same games) on my PS3. It is worse that driving an ATV alone in the forest/desert (actually it is not bad, just a lonely activity).....

    • Re: (Score:3, Interesting)

      by dindi (78034)

      The point of the post was, that while the xbox is a limited hardware, the whole experience of the xbox live system is really fun (for me).

      However, that POS died on my, so I am here with a $500 dismantled box and peripherals, and 10 games ($600) as a waste. And I refuse to buy a piece of hardware that already died on me once because that is just stupid. I heard of people who have 2-4 xboxes, all which died.

      On the other hand I took a quick view of other options, and mentioned that the WII does not interest me

  • by PotatoSan (1350933) on Friday September 05, 2008 @10:18PM (#24897495)
    Thankfully the average consumer is well-enough informed to boycott such a deeply-flawed product, thus preventing Microsoft from profiting off of this business model! I mean, can you imagine if they were selling millions of 360s, taking broken units back, and still making money?
    • Re: (Score:2, Insightful)

      by Locutus (9039)

      they are losing billions and a huge portion of the population doesn't even know what RRoD is. They have seen it but don't know it has a name. They wrote off billions last year to try and make this year look good but they will probably never make a profit on the product.

      And really, the Xbox has been a failure for what it was intended to do and that is hold off Sony's PlayStation. The PS2 is out selling Microsofts Xbox360 in a big way and the PS3 is now at or around even with Xbox360 quarterly numbers. There

    • by phayes (202222)
      There is more truth in your joke than you suspect once you leave the USA. Here in France as well as in Japan from what I've read, the reliability problems that the 360 has have caused people to boycott it or to choose the PS3 instead. Microsoft's policy of abandoning the Xbox (look at how Sony has continued to sell & develop games for the PS2!) also caused people to avoid it. With Microsoft's plan to bring out a successor to the 360 as soon as possible, it's easy to deduce that the 360 will be orphaned
  • by fermion (181285) on Friday September 05, 2008 @10:27PM (#24897559) Homepage Journal
    MS just seems like the typical firm with money than sense, like the family who will come into a lot of money, then put a a statue that pees water by the pool.

    For instance, it can't be that difficult to design an OS that works. Linux has done the basics, and it is free. Apple has done the GUI, with much less money than MS. Yet the best MS can do is a spend millions of dollars on pointless commercials. Is this because it has no idea how to fix the software? Is there no way to invest the 77% profit margin in making working products. Does it all have to spent on yachts.

    And it is not rocket science to design a game console. We have had generations of them that worked very well. MS just jumped in and borrowed existing tech, then used the windows 77% percent profit margin to subsidize the costs. And the xBox 360 is the second generation product.

    Of course, we must acknowledge that MS tried to design custom hardware, a task for which it has no experience. This leads to the question of why it couldn't just pay for someone to do it right. Oh yeah, the yachts.

    People like to compare IBM to MS, and see MS slowing down, but then ultimately being successful like IBM. What people fail to realize is that IBM spent the money to make rock solid products. The Selectric was a damn near perfect machine. The big iron did their job. The IBM PC was bulletproof. I don't know how MS is going come out the other side of the desktop monopoly when Google moves all the customers to the clouds with a six nines failure rate, and MS is still living in a world where a four nines failure rate is acceptable.

    • People like to compare IBM to MS, and see MS slowing down, but then ultimately being successful like IBM. What people fail to realize is that IBM spent the money to make rock solid products.

      Actually, IBM went from being a hardware company to a services company. When MSFT helps you design, install and optimize competitive products like IGS does with setting up Solaris servers connecting to EMC disk arrays. Realizing that money can be made off of more than just software licensing, then they'll be successful like IBM.

      Go read ex-CEO Louis Gerstner's book, it wasn't typewriters, the mainframe or PCs.
      http://www.amazon.com/Who-Says-Elephants-Cant-Dance/dp/0060523808/ [amazon.com]

  • by bigstrat2003 (1058574) * on Friday September 05, 2008 @10:29PM (#24897569)

    FTFA: "Microsoft has still sold more Xbox 360 consoles than Sony to date."

    Damn, I never saw that coming!!!

    • Re: (Score:2, Funny)

      FTFA: "Microsoft has still sold more Xbox 360 consoles than Sony to date."

      Damn, I never saw that coming!!!

      Sony hasn't sold any Xbox 360 consoles, so that quote is correct!

  • It's called Hubris (Score:5, Insightful)

    by santiagodraco (1254708) on Friday September 05, 2008 @10:30PM (#24897575)

    Microsoft's problem is pretty simple, hubris. It's illustrated quite well when you look at the kind of management practices taken by Ballmer and to a lesser extent Gates.

    Microsoft has been so enamored of their own success that they believe that they cannot go wrong, simply because of who they are. They are also more than willing to pursue business with the kinds of principles and ethics that you'd expect from a used car salesperson. They really don't care what the customer experience is, they care about making money and believe that no matter what they do, they will succeed regardless.

    Well to some extent that's true, or was true in the past, as mass and momentum are real. However it's also very clear that eventually momentum decreases and customer loyalty is a fickle thing. MS is already seeing the fruits of their poor judgement. Apple is selling more Mac's than ever, and I'd argue that Vista has played a big part in that success. I for one don't own an Xbox 360, I own a PS3. I probably won't ever buy a 360.

    I'm sure Microsoft will recover, but to what extent remains to be seen. But unless they change their principles and work toward attracting the kind of loyalty through quality and connecting with your customers that Apple has enjoyed they will continue to see, if nothing else, a customer base that will be willing to jump ship at the first opportunity.

  • RROD (Score:2, Interesting)

    by Narmacil (1189367)

    I was playing Halo 3 the other night and my network connection was acting up, then the game lurched, froze and put tons of bars across the screen, followed by a loud screeching noise

    so yeah, my Xbox RROD'ed on Sept 1st. I think its kind of odd that this story would pop up on /. within a week of it happening to me. I should pry call Microsoft sometime soon to get it replaced, but seeing as I'm a busy engineering student I haven't gotten around to it yet. Does anyone have any tips for dealing with Microsoft c

  • by EdIII (1114411) * on Friday September 05, 2008 @10:44PM (#24897647)

    But some inside the company still believed returns would be out of control

    I usually wait 6-12 months after a console is released before I purchase it so that I can get one with a working mod-chip from Canada. I'll be damned if Sony, Microsoft, or Nintendo are going to tell me I cannot play backups. Yes, Backups. So I had nearly a year to watch this infamous shit storm start, and not become a victim.

    The problems with the console were known fairly early by pretty much everyone. People talk. Kids talk even more, and most times you cannot shut them up. After about 6-8 months I myself heard about RROD constantly from people. Microsoft really "screwed the pooch" on this one and AFAIK, the losses on the returns have been at least 1.9 billion. That is a staggering number.

    The only thing new about this is that there were people in Microsoft that knew they had quality problems, and yet made a business decision to push forwards anyways. The only word for that is hubris. That is what really amazes me.

    Microsoft's top game executive, Robbie Bach, president of the Entertainment & Devices group, said at a dinner in July that Microsoft's own research shows that gamers have largely forgiven the company for defective Xbox 360s.

    That is awesomely full of shit. It says that he is an executive though, so I am not surprised.

    The WHOLE reason I have still not purchased a XBOX360 is the Red Ring Of Death fiasco. It has to be the most unreliable product put forth in decades, probably since the Ford Pinto. I am not a fanboy and I own both a PS2 and a XBOX. I would really like to get a XBOX360, but to this day I cannot be assured that it will not fail within 6 months.

    I bet that the "gamers" polled in that little research project were ALL under 14 years old. Of course they "forgave" Microsoft. They're kids! Try asking their parents if they can receive forgiveness. I bet there would be a different story entirely as shipping costs are not free. The time and hassle on the phone to get it taken care of takes its toll.

    Forgiveness? That's a riot. Nobody that had to pay for that console is going to forgive or forget about this for a long long time. This WAS Microsoft's version of the Ford Pinto, even more so than Vista. That is saying something too.

    • For most people shipping costs are in fact free. The replacement process is not without hassle -- I had to request a box 3 times before actually getting one, though you could legitimately blame their shipping company for that -- but the whole thing never cost me a dime, and I had my '360 back within two weeks of sending it off. I live in Canada; I don't know how it is overseas, of course.

      (For reference, the process is this: you call their toll-free line, spend about 10-20 minutes going through an automated

      • by phayes (202222)
        I'd really like to hear from someone who has gone through replacing their RROD'ed 360 who isn't from the USA, though. MS's support policies outside the USA are often much less painless. As in: In the USA just call them on the toll free number. In France, Call them non toll-free, give your credit card number, & IF MS decides it's not their fault then they'll give you a chargeback.
  • Competition (Score:3, Interesting)

    by OvERKiLLsFFT (986079) on Friday September 05, 2008 @11:09PM (#24897783)
    I think that Xbox is the best thing that happened to PlayStation. In the real world, there is nothing like a little competition, especially direct competition. From Wikipedia's article on competition: "Merriam-Webster defines competition in business as 'the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.' Seen as the pillar of capitalism in that it may stimulate innovation, encourage efficiency, or drive down prices, competition is touted as the foundation upon which capitalism is justified."
    • Right, as a Sony fanperson, I think it's good that Sony has some competition rather than totally dominating the market. It pissed me off to no end how SCEA slacked off a bit with added functionality for the PS2. Did you know that the PS2 can do a some of the media functionality the PS3 can do? But only in Japan. Same goes for the HDD stuff. NTSC-J FFX can use the HDD but NTSC-U/C territory FFX can't.

  • by BcNexus (826974) on Saturday September 06, 2008 @02:09AM (#24898539)
    TFA says that that Xbox 1 has 90% yields from start to finish. How surprising is that? MS simply built a practically industry standard PC. It had a hard drive, an Intel processor, an NVIDIA chip, a DVD-ROM and a power supply. These components were so standard, time tested, and widespread that combining these components into a machine with high yields was child's play. Add to that, the fact that MS was willing to hemorrhage cash with some presumably going towards for build quality on each unit sold, and it's no wonder the Xbox 1 was reliable. What's more, the PCBs and heat sinks had plenty of open air around then to encourage heat dissipation and removal through the fan at the rear.

    Many people complain about how incredibly hot their electronic devices become during use, and laptops get the most complaints. Why? Because everything is packed into a nearly air-tight space, hampering heat removal. The 360 designers sabotaged the 360's reliability by building a small and sexy machine that can't dissipate heat from the internal components fast enough to keep the running reliably.

    The 360 designers dug themselves a deeper hole by rushing unique hardware elements, in contrast to the Xbox 1, which had industry standard components. Intel had its Celeron's for the Xbox 1s "dialed in" at its factories: yields should have been in the nineties. Likewise, the SDRAM chips were industry-standard, along with the DVD drives. As far as I know, the NVIDIA GPU was neither new nor groundbreaking. Microsoft commissioned IBM to build a custom chip--who's IP would be owned by MS, so no skin off of IBM's nose if the custom processor failed due to MS's unrealistic usage in production--based on a fledgling microprocessor technology. This was a big risk that hasn't paid off because the 360s physical dimensions seem to belie an overly optimistic idea of heat production from the CPU. With the Xbox 1, any veteran engineer could say, "Look, here's a Celeron, here's its heat production, we NEED a heat sink of such and such size, we need open space around it, and this much airflow." With the custom 360 CPU, engineers may have been afraid to speak up about the thermal requirements because the CPU was so new and unfamiliar. Then, there's the ATI GPU, again custom. MS went ahead and crammed it into the system while telling themselves it wouldn't overheat, would perform admirably, and, if not, they could make it work reliably. Well, they should have been more cautious and properly spec'ed and tested the GPU. After taking the time to test and establish the GPU's operating conditions, only then should they they begun design on a case that would be small and still allow adequate heat dissipation.

    In the end, the Xbox 1 was a great console because of three things: one, MS didn't innovate: they simply built a Wintel PC based on reliable, time-tested, industry standard components. Two, MS used its position in the software market to cover its losses for producing a high-powered, high quality PC. Three, MS built the Xbox 1 with more regard for function than form. The case was huge, but was great for thermal management.
    • Re: (Score:3, Interesting)

      by Caboosian (1096069)

      The difference here is that the Xbox cost them a huge amount of money (I don't think they ever made a profit off an Xbox sale), and did not benefit from integration of parts. For instance, one of the most acclaimed bonuses of a 360 (by developers) is the integrated memory (I'm not a hardware engineer, so if I'm off here, correct me). The fact that the memory can be used both as video ram and standard ram allows for serious optimization benefits.

      Just throwing together some PC parts doesn't make it better.

  • ... is a new Xbox 360 logo [today.com].

    And I'm sure those $200 cheap Xboxes aren't all refurbished red ring casualties. Not all of them.

  • Nothing new (Score:2, Insightful)

    by gilesjuk (604902)

    Big company releases defective product to get a foot in the door. Hardly anything new?

    Typical of Microsoft, thinking of themselves rather than the people who have to use their product.

  • Incomplete when reaching the market and let the client base do the beta testing. I think Visual Studio is their best product. Still, Microsoft make really good mice and keyboards that even work under Linux, so credit where credit's due.
    • For the most part, keyboards and mice follow the PS/2 and USB standards for interfaces and MS doesn't do anything radical with their products. They do have some nice features but for the most part, MS doesn't stray from the norm of what mice and keyboards should do. Yes, it's amazing what MS quality can be like if they follow standards.

10.0 times 0.1 is hardly ever 1.0.

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