Peter Moore, the video game executive recalls the ?Red Ring of Death? saga.

The popular Xbox 360 was in question years back and the issue cost Microsoft more than $1 billion. In the year 2005, when Xbox was launched, the news hit saying that its console is useless.

The three flashing red lights horrified people and was considered the console?s way of conveying something worst had happened. These lights were soon termed as ?Red Ring of Death?!

It is to be noted that in the year 2007, the issue got worse enough to compel Microsoft to cover an unprecedented repair worth $1.15 billion!

Moreover, it also included offering a fixed Xbox 360 to the affected customers and extending the warranty of console to three years.

At present, Peter Moore recalls the problem after eight years in an IGN podcast that casts Phil Spencer, existing Xbox Head and one of its original creators, Seamus Blackley.

In the Words of Moore

According to Moore, the company was witnessing failure rates at that time and received reports through customer service.

It was the time when nobody was able to figure out the events taking place, mentions Moore. Everyone in Microsoft knew that there was a problem.

In fact, Moore went to his boss, Bobbie Rach and expressed that company may face billion dollar problem. Later, the investigations started and they were getting defectors in while analysis was going on.

The issue became a great challenge for the engineers, as they failed to detect the reason behind the issue.

However, one thing was clear that it was all related to heat and there were all types of fixes. Not only this, people even put wet towels around their Xbox in order to protect the console!

Peter Moore then decided to sit with his financial team to calculate the total amount involved to fix the issue.

It was very important to pay heed to the issue, as it became a serious PR problem for the Xbox brand. Finally, the entire team worked out and declared that it would cost around $1.15 billion to set things back in place.

This had to be conveyed to the boss and Moore did it very well. He set out a plan according to which they had to FedEx an empty box to those customers who were facing problems.

These customers would then call up the company with a FedEx return label to send their boxes. Later, the company would FedEx it back to them and fix the issue.

The Bottom Line

Todd Holmdahl, the hardware engineer of Microsoft and Moore kept on scratching their heads to detect the issue.

Finally, Steve Ballmer took the decision to spend $1.15 billion to keep the brand image intact. No doubt, the amount is around three or four times that today.

The podcast is worth listening. It?s quite interesting to get an insight into Microsoft?s biggest product issue so far.

Peter Moore has put it together in a real manner and has revealed the ups and downs faced by the company.


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