‘If we don’t address this, this brand is dead’
Ex-Xbox boss (and now EA head) Peter Moore has admitted that when he learned about Xbox 360s bricking courtesy of the now infamous red-ring-of-death error, he sat trembling in front of his then-boss Steve Ballmer and said: “if we don’t [address this problem], this brand is dead.”
“We were seeing failure rates and starting to get reports through customer service,” Moore said on a recent IGN podcast.
“It was sickening. I was doing a lot of interviews. It’s not like today with social media, which would have been horrific. We couldn’t figure it out.”
Though Microsoft had acknowledged that the RRoDs seemed heat-related – and tried several fixes to address the issue, including changing the solder – the company could not isolate what exactly was causing the malfunction.
But it knew it needed to address the problem – and fast.
“I remember going to Robbie Bach, my boss, and saying, I think we could have a billion dollar problem here,” Moore recalls. “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.”
Moore calculated that addressing the issue would cost $1.15bn to put right ($240 million of which went straight to couriers FedEx -“their stock must have gone through the roof for the next two weeks”) – and says he’ll never forget meeting with Microsoft boss, Steve Ballmer.
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 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.
Moore added: “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 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.
Moore believes that if Xbox hadn’t responded as it had, the company would look very different today – and the Xbox One may never have been developed.
If you’re a Xbox gamer, you can thank Steve Ballmer for not even hesitating.
It was that moment of decision that Steve Ballmer made, that I will never forget. He didn’t even think twice about spending $1.15bn to protect a brand that’s probably worth three or four times that today. Xbox One wouldn’t have happened.
So, did the dreaded ring ever stop you playing your 360? If so, did it effect your desire to play that console in the future?