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XBox (Games) Microsoft Entertainment Games

A History of the Xbox Red Ring of Death Fiasco 230

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 @10:03PM (#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.
  • by Samantha Wright ( 1324923 ) on Friday September 05, 2008 @10:20PM (#24897119) Homepage Journal
    Wait, what? You mean the evil old space-shuttle-sized black toaster had the red ring of death problem just like the sleek new 360? Oh, wait, you just forgot to put "360" anywhere in the summary. Or the tags. Or the category icons. Good job, guy(s).
  • by moderatorrater ( 1095745 ) on Friday September 05, 2008 @10:27PM (#24897161)

    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 extending the warranty and making sure that people get their xbox's replaced. Also, the PS3 is too expensive and the controllers are crap; it gives an overall feel of not being worth the money. The mass exodus as exclusive titles left Playstation to go multi-platform says it all, really.

  • Interesting timing (Score:5, Insightful)

    by daemonenwind ( 178848 ) on Friday September 05, 2008 @10:36PM (#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.

  • by Naughty Bob ( 1004174 ) * on Friday September 05, 2008 @10:46PM (#24897311)
    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.
  • by dindi ( 78034 ) on Friday September 05, 2008 @11:05PM (#24897411)

    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 core. It is like when I used to race bikes. Many people hated us, but so many respected us that we kept the sport up. Well .... this is something I am missing from ps3.

    The system is superior, the blueray is SUPER-DUPER, but I go online, 4 out of 16 have a microphone, and then 2 start team killing.

    Bottom line: I am not buying a xbox because it will die on me, I am not getting a wii because I do not want to host family parties (nor play mario #122 or other kiddie games), and I keep my PS3 to play once a week (I pkayed XBOX 4 times 2+ hors a week)......

    Well, maybe I just keep all that money I spent on games and spend it on my motorbike, and if I really want to shoot at people I just go and play paintball....

    Dunno .... really, just opened a game coming from amazon (grid) and I realized, that without a strong online backing (like XB LIVE, whic I [prapaid for a year) any console is as good as a brick .....

    Still I am with this shiny piece of shit, and the other white crap (xbox) is on the floor disassembled with a red ring of death ..... well .//... really I like games, but dunno where to go .....

    Sony fanboy ? My siby canera developed a dead pixel after 2 weeks of diving (30+ meters, maybe one hard impacts). Local support SUCKS so much I never bothered to even try. While MS support is the WORST, and I use linux, than OSX (apple) for an operating system for the last 16 years) I rally wish anyone had such a cool service as xbox live.....

    I guess ... hmm dunno ... can apple maybe make a console and make a service that costs but works, and then I do not have to rely on crap MS hw&sw and crap sony service?

    OK I am complaining, but even being a gamer I am just trhinking of selling my ps3 and just forget about it till a quality console with a quality service comes along...

  • by Tridus ( 79566 ) on Friday September 05, 2008 @11:23PM (#24897525) Homepage

    "now with the 360 they have taken on the reputation of having created the worst console in the history of gaming."

    Can't say I agree with that. In terms of defect rate, absolutely. But if you have a working 360, it does a lot of things well.

  • by fermion ( 181285 ) on Friday September 05, 2008 @11:27PM (#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.

  • by bigstrat2003 ( 1058574 ) * on Friday September 05, 2008 @11:28PM (#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"?

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

    by santiagodraco ( 1254708 ) on Friday September 05, 2008 @11:30PM (#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.

  • by EdIII ( 1114411 ) * on Friday September 05, 2008 @11:44PM (#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.

  • by Locutus ( 9039 ) on Saturday September 06, 2008 @12:07AM (#24897771)

    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 are hundreds of millions of PS2s on the market and the PS3 is still moving up that ladder.

    No wonder Microsoft is going to try and go back to building the PC gaming market. Once again, they'll use the marketshare of Windows because they can't compete AND MAKE A PROFIT with out it.


  • by 2nd Post! ( 213333 ) <> on Saturday September 06, 2008 @12:21AM (#24897833) Homepage

    Uh that is just two examples. How about the SNES, NES, Genesis, GBA, DS, PS2, PS1, etc?

    I think you will find that the PS3 and Xboxes are the exception and not the norm.

  • by Xzzy ( 111297 ) <> on Saturday September 06, 2008 @12:38AM (#24897909) Homepage

    Too bad the reliability problems have been resolved.

    Not to ruin the fun of a good old fashioned Microsoft bashing but the 360 has been fine since last fall. Sure it sucks it launched with so many problems, and I was as mad as anyone about it a year ago, but they made good and now we can concentrate on playing games.. which is the point of the whole thing.

  • by stuboogie ( 900470 ) on Saturday September 06, 2008 @01:30AM (#24898107)
    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.
  • by Gulthek ( 12570 ) on Saturday September 06, 2008 @01:51AM (#24898189) Homepage Journal

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

  • by magus_melchior ( 262681 ) on Saturday September 06, 2008 @02:18AM (#24898311) Journal

    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 color), and all the companies who did nothing but contribute to the "Nintendo = kiddie" image by inundating the Gamecube, GBA, DS, and Wii market with ports of kids' television shows. You know, the actual kiddie games.

    GP did say he didn't want to host gaming parties, so Wario, Sports, Smash Bros., and Mario Kart are out. Fair enough, but slapping the "kiddie" label on Nintendo's library is pretty hasty. What Nintendo does need, and I suspect this was a showstopper for him, is a team of networking people who can build a system that Nintendo can administer, but isn't prohibitively costly for those who join. Tie networking seamlessly into the Player 2-4 spots and synchronize displays between 2 Wii consoles, etc. A little late for this sort of design this late into the game, but I would bet that Nintendo is working to bring something like this to handhelds and home consoles-- that would redeem them for their silly and cumbersome "friend code" system that not many games use anymore.

  • by stuboogie ( 900470 ) on Saturday September 06, 2008 @02:29AM (#24898383)
    "It would, however, be interesting if XBOX dropped out and left only Sony and Nintendo."

    Everyone should be thanking MS for jumping into the console market. Whether you like the XBox or not, the competition has made the market better.

    Bash MS all you want, but they introduced more versatility in the XBox than Sony did with the PS2 (ie. harddrive, online multiplayer, custom soundtracks). Sony had a virtual monopoly in the console market and MS forced them to work harder. That only benefits the consumer.

    Sure MS has lost a ton of money breaking into this market. Did anyone actually think it would be easy wrestling market share from a monopoly??? (If it were, Linux would have a much larger share of the PC platform. Yeah, yeah...mod me down. I'm writing this from a "Hardy" box.)

    The RRoD is a serious goof by MS. Still, they have made great strides in establishing a position in the market considering this is their 2nd gen. and they are just now getting some of the franchise titles that were previously exclusive to Sony. Not to mention the benefit of having the enormous library of games Sony built up with the PS and PS2.

    Whether you prefer the 360 or the PS3, you should want MS to stay in this market for the long haul. The competition will only improve the consumers experience.
  • by BcNexus ( 826974 ) on Saturday September 06, 2008 @03:09AM (#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.
  • by Chuck Chunder ( 21021 ) on Saturday September 06, 2008 @06:08AM (#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.

  • by phayes ( 202222 ) on Saturday September 06, 2008 @08:15AM (#24899727) Homepage
    Too bad you're wrong.

    Microsoft is still recycling that enormous pile of steaming 1st gen 360s into the loop by sending them out as replacements for newer machines that die of RROD. So, you buy a newer 360 to attempt to avoid the problems that plague the older 360's but yours dies anyway (even the newer 360's have a failure rate of between 10% & 16%). You send it in to get repaired & you get a lemon back which will only last a year.

    With a process like this, you know that the RROD problem is never going away until MS both solves the problem (failure rate < 3%) in a new Xbox design and stops sending out the ticking timebombs as replacements.

  • by jonadab ( 583620 ) on Saturday September 06, 2008 @08:38AM (#24899821) Homepage Journal
    Eh, before XBox there was Sega, and before Sega there was Intellivision.

    Competition is good, but it doesn't really matter very much which companies are doing the competing. There's only room for so many major game consoles at once -- I would say somewhere around three in any given generation. When more companies than that try to introduce new consoles at once, some of them fail (e.g., Atari Jaguar). So I would say that if Microsoft were to exit the market, there's a high probability somebody else would step in.

    Not that I think Microsoft is likely to exit the market in the immediate future. They aren't known for exiting markets, generally, for one thing. I suspect it would be inconsistent with their overall corporate strategy.
  • Nothing new (Score:2, Insightful)

    by gilesjuk ( 604902 ) <giles.jones@zen.[ ]uk ['co.' in gap]> on Saturday September 06, 2008 @09:37AM (#24900123)

    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.

  • The PS3 is now out-selling the 360.

    The PS3 may have a higher attach rate as well, last I heard.

    The PS3 plays a modern high definition movie format you can actually buy new releases in.

    The PS3 doesn't charge me to play online, so its substantially cheaper than a 360 over a year, or worse, five years.

    The PS3 rarely crashes (I know some people report that it happens, even though its pretty stable).

    The PS3 has some great exclusives.

    Failure? hardly. Its still being sold successfully and selling more by the month while the 360 goes downhill.

"You must have an IQ of at least half a million." -- Popeye