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Why The Xbox 360 (Hardware) Failed

Asian Xbox 360 manufacturers are blaming poor console design cheap components and a lack of testing coupled with a manic obsession by Microsoft to beat Sony as the reason for the Xbox 360 "Red Ring Of Death" probems.

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Update:

Asian Xbox 360 manufacturers are blaming poor console design cheap components and a lack of testing coupled with a manic obsession by Microsoft to beat Sony as the reason for the Xbox 360 "Red Ring Of Death" probems.

Two years ago In a desperate quest for supremacy in the gaming console market and in an effort to beat Sony and then later Nintendo with their Wii console, Microsoft committed themselves to getting the Xbox 360 to market some 12 months ahead of the new Sony PS3. They also stripped costs out of the unit in an effort to undercut Sony.

Now they are paying the cost of their failed marketing exercise after the world's largest Software Company announced on Friday that they will take an A$1.3 billion to $1.4 billion charge to extend warranty coverage on repairs and replacements. The company said a months-long investigation into an "unacceptable number of repairs" to Xbox 360 consoles has helped it identify several flaws that caused the system to crash—indicated by three flashing red lights on the front dubbed the "Red Ring of Death" by gamers.

Smarthouse suspected 7 months ago that there was a problem with the Xbox 360 after we got a high level of emails from readers complaining of problems. We wrote a story that appeared online. This in turn triggered a lot more readers to write to us about their problems not only with the Xbox 360 but in dealing with Microsoft.

In Australia Microsoft refused to return calls on the issue and their PR Company even went as far as saying that there was no problem and that SmartHouse was exaggerating. So we decided to contact retailers selling the Xbox 360. They reported massive problems with the console with several claiming that the return rate was over 30%

As an example the Sony PS2 had a return rate of between 1 & 2% The PS 3 which has only been in the market for 6 months is less than 1%.
Robbie Bach, president of Microsoft's entertainment and devices division, declined in an interview to say what specifically caused the failures or how high the failure rate has been, but Asian manufacturers of the Xbox 360 who have been pressured by Microsoft to lower costs by as much as 15% say that the problem is caused by poor Microsoft design and the Company buying low cost components in an effort to beat Sony.

Recently Microsoft adopted various strategies to be more cost competitive with its Xbox 360 game consoles, with moves including asking for a price reduction from Taiwan-based component makers and working with Lite-On IT for its add-on HD-DVD drive, according to sources in Taiwan.

One Asian manufacturer that SmartHouse spoke to on Friday said "Microsoft have known of this problem for a long time. They are trying to blame component manufacturers but it was a combination of bad design and them (Microsoft) wanting everything cheap. This is what caused the problem along with them wanting to beat Sony to market. A lot of manufacturers were pushed to deliver components without much testing of the components working together inside the console".

Microsoft has said little about the causes of the hardware woes. It relies on two contract manufacturers to make the Xbox 360—Flextronics International (FLEX) and Celestica (CLS)—both of which make the finished product at plants in southern China. But Bach indicated the issue had nothing to do with the recent spate of tainted or defective Chinese imports.

"You should think of it more as a design question," he says. "We had some design issues, and it's a combination of factors that led to the problems." Microsoft said it worked with the contract manufacturers to identify and address the problem, and has taken steps to make sure future shipments do not suffer similar issues.

Despite adding to the continuing losses for the entertainment and devices division, Microsoft

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PSTripleOG3487d ago

Its American and its American and its American and its American.

This Is Living

Out

coolmatrix3487d ago (Edited 3487d ago )

First year 10 million sold.

Since ONLY 1.6 million. I smell a rat.

30% or higher failure rate... Bunch of losers.

Rushed to be first and cheap. NO HDMI, NO HD-DVD, Mostly PC ports. Bunch of losers!!

AFTER POACHING DMC4 and GTAIV and others NOT much PS2 franchises to POACH beyond 2007.

What will MS do? Create NEW Successful IP? I doubt it! Nothing in the Pipeline beyond 2007.

Sounds like a ONE TRICK PONY.

After HALO and two other quaility titles at best nothing for 2008 and beyond.

Oh wait...in 2008 or 2009 you will GET ANOTHER Xbox to buy. SUCKERS!!!

There is a SUCKER born every second and he sends in his 360 for repairs.

I still cant believe there are 360 owners out there. Oh wait...SUCKERS!!

Keep giving Bill Gates your money. He appreciates it. And Bill Gates gives you a refurbished 360 for the FULL PRICE.

You must be A LOSER or A MARK!!!

TheMART-sucksdick3487d ago (Edited 3487d ago )

Ive never looked at it that way. You got me thinking and i guess the 360 is a complete piece of ****... I own 2 and i have been lucky enough to stay with them from 2005. Saying that am always on my ps3 and saturn so my 360's never get played. Maybe after halo 3 MS will get desparate, or just make more halo's. MS are on the edge of a very high cliff, and if they dont do something soon about their bad surport and bad hardware they will slip and fall (something bad?). The more i look at it i laugh, WHERE THE HELL do MS get the right to jump into the so called console war anyway??? anybody??? something to do with MAC?? The xbox 1 was a rushed idea, the xbox 360 was a bad idea... The more people stick up for MS the more they are proving to be cowards. They give the ps3 bull all the time about lack of software.... Them buggers cant talk, 70% of games on the 360 are FPS. Microsoft should give up with the 360 and just make software. And saying that i run vista and thats a piece of **** too. Bad company - Bad software, Bad hardware, Bad surport, User Friendly - NO!. Over priced - YES!... I'm going to tell the truth, the only reason i bought a 360 was to play the driving games it has to offer, (am a driving nerd) their wheel sucks BTW. Yep so i guess the 360 is doomed, unless (you know the rest) oh wait ...pull their DlCK out their arses and make some good hardware. Please Microsoft Fix your consoles, Stop being cowards and grow some balls NOW!

Also Known As3487d ago

You have to be a member of that website to read the article? Where is the complete article? This is a frivolous submission, just more sony fanboys posting every little insignificant article that makes the 360 look bad.

The title should read: WHY THIS ARTICLE FAILED approval

jromao3487d ago

...and the kids too, unless they got one new and very fresh xbox everyday to play with. With some new game copies to replace the one scratched. If MS try to save money with the console components means NO respect at all for customers and just ask "...give me your money..".

Nice, just let me run to shop and buy one xbox (first in my life) :) (of course this is my daily stupid moment, fortunaly I fix the bug in my brain after half of second).

Morbius4203487d ago

I'll bet it's you who sucks not the Microsoft Wheel.

Also Known As3487d ago (Edited 3487d ago )

WHAT THE HELL IS WRONG WITH THIS WEBSITE?

why would they let a title like that be posted? I could understand if the title read: Has the xbox 360 failed?
The title allowed makes it look like if it actually did fail.
If i were microsoft i'd sue the owners of this website. I'm pissed.

MaximusPrime3487d ago

They should have worked on it more like Sony.

I congratulate Sony for bringing out PS3 a year later. Many reports show that less than 1% failure rate. Keep up a good work, sony!

As for Microsoft, you are an idiot, a GREEDY idiot.

As for Nintendo, no hard feeling. You did a good job, i admit.

dantesparda3487d ago (Edited 3487d ago )

@Cool Matrix
Tone it down, you sound to fanboyish. Yes some of those points may be true, but others sound a little to exaggerated to me

And @ A.K.A
You need to tone it down too, cuz you also sound too much like a fanboy. And the impression i got when i read the title was why the Xbox console is breaking down, not that 360 is failing to sell. So take your fanboy goggles off, and you might be able to see that

People cant we stop with the exaggerations? It really takes away from your credibility. I really do believe that the failure rate of the 360 is far higher than 30%, as i've had 2 break down on me already in a yr and half's time (1st one in 80-soemthing days & the 2nd one, in a yr & 3 months), and have seen enough of them break down to know that there is a mayor problem here, and thats not even counting the countless others on my friends list and on the internet and at websites. But at the same time, do we really believe that the PS2 had a failure rate of only 1-2% percent? I mean, come on! PS2 DREs where all over the place. Granted there were way more PS2's around at that time than there are 360s today. But still, come on, lets get real! And the same for 360 owners, less than 30%? seriously? You dont think so cuz why? cuz your machine hasnt broken down (yet!) Come on, people stop all this fanboy bullsh!t and get real, lets be accurate and hold these companies feet to the fire when they fvck up.

See fanboys, you's just dont get it. PS3 (and hence forth Sony) made your 360 better (well, maybe not in terms of manufacturing, in that regard, it actually made it worse!), but without the PS3, the 360 would not be a s good as it is today, thanks to the pressure it felt to beat Sony. And the same thing with the PS3, without the 360, it wouldnt be as good as it is today, trust me, you wouldnt have half the sh!t and features that it does (or are being) added on by these BIOS (firmware) updates. Also, it pushes both Sony and the publishers to work harder, to pull-off a better version of the game they are making in order to compare better with the 360 version. Cuz see, there is a perception out there, that the PS3 is supposed to be better and unfortunately for you PS3 owners, this just isnt true so far. From what I've seen, so far, of both consoles, i can honestly tell you that the 360 is better at texturing, period! also, it is better at anti-aliasing, and tends to sustain better framerates usually than the PS3 version. And i am no 360 fanboy, just ask any of the 360 fanboys on this site. They all think that i am some sort of undercover Sony fanboy, because i dont sweat the 360 like they do or think its nearly as impessive as they do. And whats funny is I've never even owned a Sony system in my life! Not PS1, not PS2, not PSP, or PS3. While i bought both the Xbox and 360 at launch! Yet, they all think i am, cuz i dont praised their beloved 360. But hey, what can you do? I've seen better than the 360, (on the PC) and thats why I am not as impressed by it as they are. And instead am disappointed by some of its graphical shortcomings, like the lack of basic features like; trilinear filtering (yes i know the system can do it, but it just isnt doing it in most of its games,...why?), and also wheres the serious Anisotropic filtering? Ati chips are usually really good at giving you AF without so much of a performance hit, yet, here is the 360, barely using it, again, why? And why all the vertical tearing? (what to keep the framerate up? but you usually dont get "tearing" unless the framerate goes over the refresh rate and vertical sync is off, yet here is the 360 tearing like crazy when most of its games are not doing 60frames, so how are they going over the 60hz? it doesnt make sense, i guess the chip just isnt good at syncing) And why arent more games running at 60fps? All disappointing to me. I blame it on the in-line processing (which is just inferior!) and the 128-bit GPU to CPU bus, (also inferior!) But dont get to excited PS3 fans, as the PS3 has the same exact problems. The lack of all these graphical features is why i am not so impressed by these machines. Sh!t the GC, PS2 And Xbox could do trilinear filtering wonderfully. So why cant these systems? It looks like they are really using brilinear filtering (that's right, "bri" not "bi") which i guess is alot better than them using "bi"linear filtering. But is still unacceptable in my book. Although i do gotta say, that the games coming out are starting to look alot more impressive, but still lack many of the features i have just mentioned.

Eagle Eye3487d ago (Edited 3487d ago )

Jeez wonder why you only have one bubble. And look he's from Europe what a shock...just another American hater.

Texas GMR3486d ago

I've had a "day 1" launch console and have had no problems. Guess I'm one of the lucky ones. The thing about it though, is they make the games I want to play.

You got to give to them. Their strategy worked! They were the first to market and they are in the drivers seat of this console war.(360 vs. PS3. I think Nintendo will sell the most.) It's up to them to make the right moves from here on out.

It's all about the games, and in my opinion, at this point in time the 360 has got a lot of good ones coming.

360 won't fail and neither will the PS3. Most of us have a little "fanboy" in us on this site and that's what makes this site so interesting. But 95% of the gamers out there have no clue what is going on behind the scenes and probably really don't care as long as they can play the games they want to play.

All people are going to see is MS has a 3 year warranty and the others don't.

Have fun with what ever system you own and don't let what the others do get you too fired up over nothing.

+ Show (7) more repliesLast reply 3486d ago
Also Known As3487d ago (Edited 3487d ago )

You have to be a member of that website to read the article? Where is the complete article? This is a frivolous submission, just more sony fanboys posting every little insignificant article that makes the 360 look bad.

The title should read: WHY THIS ARTICLE FAILED approval

darkling3487d ago (Edited 3487d ago )

Asian Xbox 360 manufacturers are blaming poor console design cheap components and a lack of testing coupled with a manic obsession by Microsoft to beat Sony as the reason for the Xbox 360 "Red Ring Of Death" probems.

Advertisement
----------------------------- ------------------------------ - --------------------

Two years ago In a desperate quest for supremacy in the gaming console market and in an effort to beat Sony and then later Nintendo with their Wii console, Microsoft committed themselves to getting the Xbox 360 to market some 12 months ahead of the new Sony PS3. They also stripped costs out of the unit in an effort to undercut Sony.

Now they are paying the cost of their failed marketing exercise after the world's largest Software Company announced on Friday that they will take an A$1.3 billion to $1.4 billion charge to extend warranty coverage on repairs and replacements. The company said a months-long investigation into an "unacceptable number of repairs" to Xbox 360 consoles has helped it identify several flaws that caused the system to crash—indicated by three flashing red lights on the front dubbed the "Red Ring of Death" by gamers.

Smarthouse suspected 7 months ago that there was a problem with the Xbox 360 after we got a high level of emails from readers complaining of problems. We wrote a story that appeared online. This in turn triggered a lot more readers to write to us about their problems not only with the Xbox 360 but in dealing with Microsoft.

In Australia Microsoft refused to return calls on the issue and their PR Company even went as far as saying that there was no problem and that SmartHouse was exaggerating. So we decided to contact retailers selling the Xbox 360. They reported massive problems with the console with several claiming that the return rate was over 30%

As an example the Sony PS2 had a return rate of between 1 & 2% The PS 3 which has only been in the market for 6 months is less than 1%.
Robbie Bach, president of Microsoft's entertainment and devices division, declined in an interview to say what specifically caused the failures or how high the failure rate has been, but Asian manufacturers of the Xbox 360 who have been pressured by Microsoft to lower costs by as much as 15% say that the problem is caused by poor Microsoft design and the Company buying low cost components in an effort to beat Sony.

Recently Microsoft adopted various strategies to be more cost competitive with its Xbox 360 game consoles, with moves including asking for a price reduction from Taiwan-based component makers and working with Lite-On IT for its add-on HD-DVD drive, according to sources in Taiwan.

One Asian manufacturer that SmartHouse spoke to on Friday said "Microsoft have known of this problem for a long time. They are trying to blame component manufacturers but it was a combination of bad design and them (Microsoft) wanting everything cheap. This is what caused the problem along with them wanting to beat Sony to market. A lot of manufacturers were pushed to deliver components without much testing of the components working together inside the console".

Microsoft has said little about the causes of the hardware woes. It relies on two contract manufacturers to make the Xbox 360—Flextronics International (FLEX) and Celestica (CLS)—both of which make the finished product at plants in southern China. But Bach indicated the issue had nothing to do with the recent spate of tainted or defective Chinese imports.

"You should think of it more as a design question," he says. "We had some design issues, and it's a combination of factors that led to the problems." Microsoft said it worked with the contract manufacturers to identify and address the problem, and has taken steps to make sure future shipments do not suffer similar issues.

Despite adding to the continuing losses for the entertainment and devices division, Microsoft executives pointed to a silver lining: "Most customers are going to look at it and say, 'Great, Microsoft stands behind the product,'" Bach says. "Ultimately, it becomes a positive thought in people's minds."
Stalled Momentum
Microsoft will record the expenses in the quarter that ended June 30, compounding losses at a division that has yet to become profitable. Fallout from the admission won't end there. The hardware problems could undermine Microsoft's credibility with the hard-core gamers it has fought hard to court in recent years. The company belatedly owns up to flaws that reach back to the November, 2005, Xbox 360 launch.

Users complained then that the console scratched game discs and rendered them unusable. It took nearly a full year for Microsoft to admit that the original batch of shipments was failing at an unusually high rate. Last September, the company extended its 90-day warranty to a full year. Then they offered free shipping on returns.

What's more, Microsoft's pronouncement could further slow the momentum the company had built with its year-long lead over Sony's PlayStation 3 and Nintendo's Wii. Since January, the Wii has stolen the spotlight—and gamer dollars—from rival systems. Microsoft shipped 10 million units through 2006, but has sold only 1.6 million additional units since then. The company failed to reach its forecast of shipping 12 million units through June.

In June, the Wii outsold the Xbox 360 by a 2-to-1 margin and it outstripped PlayStation 3 sales nearly 4 to 1, according to product tracker NPD Group. Nintendo President Satoru Iwata predicts the company will sell more than 14 million units in its current fiscal year.

Game Releases Planned
Like other makers of consumer electronics, Microsoft is willing to accept losses on gaming consoles in hopes of recouping revenue through game software. And Microsoft plans to release some blockbusters later this year. Along with others in the games industry, it is expected to showcase many of those products at this month's annual E3 games expo held in Los Angeles. Microsoft is betting its core Halo franchise will give it a boost later this year with the release of Halo 3.

The company also has stolen a march on Sony, getting Take-Two Interactive Software (TTWO) to drop its PlayStation exclusivity for the next instalment of its Grand Theft Auto franchise

kingofps33487d ago

I thought this was old news.

MADGameR3486d ago

MS wanted to release the X Box 360 early so they can say ''We are leading the next gen race'' They thought by releasing it cheaper and they knew that SONY's PS3 was going to be more expensive than the 360 So they wanted the extra leverage. It was definately a rush job in numbers of units.

pwnsause3487d ago

OMG this is flame bait lol

Blankman3487d ago

the 360 hasnt failed but a lot of the things said such as pushing the console out early in an effort to beat sony are probably responsible for such high failur rate console design being approved for sale to the consumer. They need to find a way to change the design of the 360 because i really dnt see how they can maintain their lead with that 33%even if they have a 3yr warranty. I want quality products not a product that has a 1 in 3 chance of failin.

pwnsause3487d ago

well i believe that 3yr warranty signifies no price drop for a while

Also Known As3487d ago

Microsoft didnt become one of the worlds most important companies because they are dumb. If they see that not lowering the price is hurting them they WILL do it.