Posted in: Games, Movies, Video Games | Tagged: entertainment, games, microsoft, video games, xbox, Xbox 360, xbox one

Ex-Xbox Boss Goes Into The Nightmare Of The Red Ring Of Death Disaster

The 'Red Ring of Death' was a pivotal moment in Xbox history. The Xbox 360 was flying and had dominated the PlayStation 3 early on, but then disaster struck. Consoles started overheating and failing all over the place, leaving Microsoft with a huge problem on their hands.

In a really great IGN interview on Podcast Unlocked featuring the bosses behind Xbox, Head of Xbox during the 360 launch Peter Moore candidly went into the situation and one fateful meeting with Microsoft boss at the time Steve Balmer. Thanks to Eurogamer for the transcription:

We were seeing failure rates and starting to get reports through customer service. This was a thing where we couldn't actually figure out what was going on.

We knew we had a problem. I remember going to Robbie Bach, my boss, and saying, I think we could have a billion dollar problem here. As we started to do the analysis of what was going on, we were getting the defectors in, it was a challenging problem for our engineers, and we couldn't quite figure out what it was. We knew it was heat related. There were all kinds of fixes. I remember people putting wet towels around the box.

The moment I'll never forget, I said to Robbie, we've got a business review meeting in Building 34, with Steve Ballmer. I said, we've got to tell Steve, here's what we have to do: we need to FedEx an empty box to a customer who had a problem – they would call us up – with a FedEx return label to send your box, and then we would FedEx it back to them and fix it. Either keep your hard-drive or send it to us.

I calculated with my finance team, Dennis Durkin, Doug Ralphs… $1.15bn, right out there. I always remember $240m of that was FedEx. Their stock must have gone through the roof for the next two weeks.

And, I am trembling sat in front of Steve, who I love to death, but he can be an intimidating human being. Steve said, 'okay, talk me through this.' I said, 'if we don't do this, this brand is dead.

Steve looked at me and said, 'what have we got to do?' I said, 'we've got to take them all back, and we've got to do this in a first class way,' because when you take a console away from a gamer, and you're going to spend three weeks fixing it… so we've got to FedEx this all the way. We've got to FedEx this all the way. We've got to overnight it back in two.

He said, 'what's it going to cost?' I remember taking a deep breath, looking at Robbie, and saying, 'we think it's $1.15bn, Steve.' He said, 'do it.' There was no hesitation.

That decision saved Xbox, there is no doubt about it. I remember at the time, customer service was very prompt and felt fairly painless. It was the absolute best service to a huge manufacturing problem and for that, Xbox still stands today.

Honestly, you should really give the entire podcast a listen. Ryan McCaffrey gets Xbox creator Seamus Blackley, current boss Phil Spencer and Peter Moore on one panel and they go deep into building the console, the brand and behind the scenes stories. It's really fascinating.

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