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Microsoft Evasive on 360 Hardware Changes
From all reports Microsoft has upgraded the Xbox 360 consoles coming from their factories, and modified the consoles heading back to consumers from service calls. The trouble is, they're having a hard time admitting it. The company has always maintained there aren't any excessive heat problems with their console, so admitting now that they've added extra heatsink capabilities would be ... somewhat embarrassing. Dean Takahashi at the San Jose Merc has an interview with Todd Holmdahl, the 'hardware guy' at Microsoft: "We're very proud of the box. We think the vast majority of people are having just a great experience. You look at the number of games they are buying, the number of accessories they are buying, the Live attach. They love the box. They continue to buy the box. That said, we take any customer issue very seriously. We continue to look into these things very deeply. You have seen we have made some changes to our customer service policy."
Microsoft is bleeding cash at a faster rate than the first Xbox at a similar point in time and worldwide sales are worse than the first Xbox at a similar point in time(now that the PR stunt of flooding the channel with a couple extra million 360s has run its course).
And now Microsoft has some 9 million or so 360s out there that are defective by design. They will continue to fail over and over again due to heat bending the motherboard and detaching the chips. It's not a matter of if, but when. If you have a 360, it will fail.
The 360 team was given clear orders when they started the follow up to the 5 billion dollar in red ink first Xbox, no more billions in losses. Those days are over, the luxury of just throwing billions at the console market are over. But right now the project is bleeding cash at a faster rate due to the poor sales and hardware defects. And they now have 9 million or so 360s out there that either need to be replaced entirely or have costly modifications to keep them alive.
The 360 will now never be able to even break even and start making back the billions it has cost so far, and of course never begin to make back the billions for the first console either.
It is now just a question of when the plug gets pulled. Does Microsoft want to spend the billions to to keep the 360 artificially alive in the market just to save face or pull the plug now and deal with the short term PR hit and move on to other markets.
I work in a tech support department for a manufacturer, and it's a tightrope to balance Sales desires versus Engineering's desires. Engineering wants to come out with a fix, but yet they want to keep a lid on the idea that they designed a defective product. Sales wants to hear there's a fix but then gets upset when distributors want to return hundreds of product. So, applying my experience to the observations of Microsoft, I'd say it's either a bug they can't reproduce, or a change mid-production for a bug that isn't going to happen a high percentage of the time on the original design.
For example, we had a problem with the open cell foam behind buttons for security panels that were installed in the upper-NorthEast areas of the US, and Canada. Water would get into the cell and freeze, and then subsequent freeze/thaw conditions killed the foam. We revised the design. There's no reason, however, for a Florida or Arizona distributor to return thousands of units for a "button upgrade", even though everyone wants the "latest and greatest". One other example is a "hypothetical" condition. You've got hundreds of products with "reported heat issues". You might think this is an issue, but when you look at the fact there are millions of units out, hundreds is nothing. Engineering on their own makes a heat design change, and you decide to implement it on returns cause the retrofit is cheap and practical. You're not going to recall millions of units that are currently working fine, and there are a couple hundred with REPORTED problems. I have a feeling if you look at other consumer devices stuck in entertainment centers, the number of overheating XBOX360s is on par for the industry.
Again either you 360 works or it doesn't. If it doesn't they will fix it.
Since there is no mass failing so 360s there wouldn't be a recall, and no mass failings means its not like the product itself was built like a piece of crap. All manufacturing processes have defects and they are correcting the ones with those defects. Heck they even extended the warranty by a full year after the original 90 day one.
I dunno just doesn't seem like a story.
Yay anecdotal evidence!
I know 8 people with 360s, and all of them have had theirs replaced at least once. Oddly, the majority of them still love the thing, and a few rewarded Microsoft through the purchase of an Elite to replace their out-of-warranty box when it broke.
And check on those financials. The defects have had a huge impact of the division's bottom line. The 360 would be a profit center for Microsoft right now without all the replacements. You just don't hear about it in the national news precicely because they *are* really good at covering it up, just like they're really good getting the national media to report on product lanuches that don't deserve coverage.