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A History of the Xbox Red Ring of Death Fiasco
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."
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.
McCain/Palin '08. Now THAT's hope and change!
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. 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 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.
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.
clearly you are new here.
If you mod me down, I will become more powerful than you can imagine....
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?
AirSpeak - http://itunes.com/apps/AirSpeak
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...
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?
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 is a form of predatory pricing 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 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.
"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.
-- "So they told me that using the download page to download something was not something they anticipated." - Bill Gates
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.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
FTFA: "Microsoft has still sold more Xbox 360 consoles than Sony to date."
Damn, I never saw that coming!!!
"16MB (fuck off, MiB fascists)" - The Mighty Buzzard
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.
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 concerning this problem?
wish me luck
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.
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.
Worst console? Hm.
There DOES seem to be a big following online for it with Live. It's pretty cool to play all those old games on the system, and I do know a fair number of people who use the system a lot.
Train wreck? I agree. Will it continue on? Probably. Flawed and broken, though fortunately people actually have a choice in the console market.
It would, however, be interesting if XBOX dropped out and left only Sony and Nintendo.
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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."
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.
Not to ruin the fun of a good old fashioned Microsoft bashing...
You wouldn't happen to weigh more than a duck, would you?
"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.
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 system and then waiting on hold, then talk to a person for a few more minutes. A couple days later there's a box on your doorstep, which you pack up and send off at no cost. A week or two later the console comes back fixed. They'll do this for any '360 purchased ever, if you have RROD -- I worked on a "launch window" title and had one I got on launch day direct from MS.)
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.
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. It may be more reliable and save on R&D costs, but a console like a PS3 would blow a PC equivalent (512mb RAM, 6800GT, let's not talk about the CPU) out of the water. In the console market, you have to build a "console" and not a PC, otherwise you'll never bring down the cost sufficiently, and it won't have a very good lifespan (graphically).
They haven't been resolved. Although the rate of RROD isn't as high as before (it was around 33% before), it still happens to the newer consoles.
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.
Democracy is a sheep and two wolves deciding what to have for lunch. Freedom is a well armed sheep contesting the issue
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.
Cut that out, or I will ship you to Norilsk in a box.
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.
- Michael T. Babcock (Yes, I blog)
I've had my "Lemon" since launch and have had no problems whatsoever... which I suppose puts me in the upper 66% of consoles.
Or maybe it's that I took proper care of it, keeping it well ventilated and all. Many people are hard on stuff. Pretty much all of my buddies have 360's, and the only ones that have returned theirs were the ones that DIDN'T listen to the rest of us (stuck it in a closed cabinet and left it running for 3 days, moved it while it was playing, etc.) They're the same people who think they can overclock their PCs to 6GHz without having the expensive memory or an elaborate cooling system and then STILL shove them in their desk cabinet.
Just my take on the entire RRoD thing. I know the cause, and it is caused by a case of bad engineering... but if you treat your consoles like you'd treat your Ferrari, it wouldn't overheat and break the solder points. To me it's just plain common sense to keep it ventilated.