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Kristopher Kubicki -- Red Ring of Death
Microsoft will take a $1 billion charge to fix Xbox 360 consoles

Microsoft's Xbox 360 was the first to market in the "next generation" console race and is leading in total sales so far. Nintendo's Wii has been selling at a breakneck pace in the United States, but the Xbox 360 has held a comfortable lead over the Sony PlayStation 3.

Furthermore, Microsoft has a rather palatable portfolio of titles for gamers to choose from along with its robust Xbox Live online service. Microsoft has even reached out to the community with its XNA Game Studio Express developmental software.

But there is one pitfall that Microsoft has not been able to get away from with regards to the Xbox 360: the infamous Red Ring of Death (RROD). The RROD has been the perennial thorn in the side of the Xbox 360.

In September of 2006, Microsoft offered free repairs to customer that purchased Xbox 360 consoles manufactured before 01/01/2006. Microsoft noted that the reason for the generosity was due to "higher than usual number of units coming in for repair."

Three months later in December 2006, Microsoft decided to boost the Xbox 360's warranty to a full year. Customers who had already paid for repair service were mailed checks for the full repair costs by Microsoft. "Customer satisfaction is a central focus and priority for the Xbox 360 system," said Jeff Bell, corporate VP of Global Marketing for Microsoft's Interactive Entertainment Business at the time of the announcement.

Despite Microsoft's best efforts, Xbox 360s afflicted with the RROD continued to roll in for service. In April 2007, the company decided to bulk up its warranty services by offering free shipping for consoles in and out of warranty. Microsoft also announced that customers who sent in consoles under warranty would receive an additional 90 days of warranty service -- in addition, consoles that were sent in for service when out of warranty would be returned with a fresh one-year repair warranty.

At the time, the company also announced faster repair times for consoles (within five business days) and the addition of more staff to handle customers’ needs.

All the while, Microsoft remained mum as to the actual problems with the Xbox 360 and declined to give a failure rate for the console. In May, Microsoft's Peter Moore said that “I can’t comment on failure rates, because it’s just not something  -- it’s a moving target. What this consumer should worry about is the way that we’ve treated him. Y’know, things break, and if we’ve treated him well and fixed his problem, that’s something that we’re focused on right now."

Most had speculated that the problems related to Xbox 360s becoming afflicted with the dreaded RROD was because of lead-free solder joints on the GPU and poor cooling within the case. Xbox 360 consoles with upgraded cooling hardware began appearing in Europe in early June. Microsoft responded with "no comment."

Earlier this week, DailyTech reported that the failure rate for the Xbox 360 was as high as 33 percent according to some retailers -- Microsoft had previously stated that the failure rate for the Xbox 360 was in the three to five percent range. “The real numbers were between 30 to 33 percent,” said former EB Games employee Matthieu G. “We had 35 Xbox 360s at launch. I know more than half of them broke within the first six months (red lights or making circles under the game discs). Two of them were dead on arrival.”

The RROD problem is so bad that some companies have even refused to repair the console. “This problem is endemic on the Xbox 360 console and the volume has made this repair non-viable," said Micromart, a UK-based game console repair company. “The work we had done to the console lead us to believe that basically it was a fault with the motherboard and not something that could be resolved easily. And it wasn't going to go away,” continued Micromart's Jeff Croft.

Although it doesn't appear that Microsoft has made any changes to stop the Xbox 360 from coughing up the dreaded RROD, the company announced today that it will set aside $1 billion USD to fix "an unacceptable number of repairs."

"This is just one of those things that happens when it happens," said Microsoft entertainment and devices division president Robbie Bach. "We reached our conclusion early this week and because it's a financially meaningful issue we had to announce it immediately."

Peter Moore remarked that "The majority of customers who own Xbox 360 consoles have had a terrific experience from their first day, and continue to, day in and day out." He was also humble enough to admit that "Some of you have expressed frustration with the customer experiences you have had with Xbox 360; frustration with having to return your console for service after receiving the general hardware error message on the console."

As a result, Microsoft is extending warranties of Xbox 360s afflicted with the RROD to three years from the date of purchase. The company will also retroactively reimburse repair costs for anyone that sent in their Xbox 360 for the RROD.

"In doing so, Microsoft stands behind its products and takes responsibility to ensure that every Xbox 360 console owner continues to have a fantastic gaming experience," said Moore. "If we have let any of you down in the experience you have had with your Xbox 360, we sincerely apologize. We are taking responsibility and are making these changes to ensure that every Xbox 360 owner continues to have a great experience."

Microsoft’s generosity is commendable, but until the actual cause of the problem is identified and taken care of, this may all be for naught.

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By kilkennycat on 7/5/2007 10:01:07 PM , Rating: 6
Anand published the 'Inside the Xbox360" article on November 6,2005 with an excellent physical description and a very clear set of photographs.

Follows is my reply-posting to this article:-

=====Start of my Reply-posting, Nov 16 2005 ============
Seems as if a fan failure (or blockage of the inlet air passage) could potentially cause catastrophic failure of the critical silicon without effective thermal protection.

Anand, Kris, Tuan:-

Any idea of the nature and effectiveness of the thermal protection -- or wanna carry out a potentially destructive test by blocking up the inlet air on your presumably-rare Xbox360? An important issue for the TYPICAL technically-naive purchaser of the Xbox360, who is likely to be very careless about the Xbox360 ventilation and certainly will forget to regularly clear the inlet air-holes of sticky crud and junk. And what about the close-packed-finned heat-sink on the CPU? Such heat sinks on PC CPUs fill up completely with lint after about 6-9 months in a typical home environment. The Xbox360 is DELIBERATELY built to be non-user accessible for cleaning or any other purpose. A very big mistake. The internal air-duct should have been built on to a user-removable cover to expose the heat-sinks and fans for routine cleaning. I have had my share of cleaning out PCs (edit: heat-sinks) that have become completely blocked up with crud, the first obvious symptom being erratic shut-down of the CPU by the motherboard thermal protection. The Xbox360 dissipates a lot of power in the core silicon --- much more than the old Xbox.

At present, I highly recommend taking a 2-year extended replacement warranty on the Xbox360, so that WHEN ( not IF) the heat-sinks fill up with junk (or the fans fail) and the box begins to function erratically, the owner can get a brand-new one :-) :-) :-)

===============End of Reply-posting =======

I also pointed out in a later comment, the disastrous positioning of the CPU and GPU heatsinks in close-proximity to the DVD-drive, probably systematically overheating it in normal use and certainly overheating it after the heatsinks get blocked up with lint, sticky crud and dog and cat hairs. Notice that nice hand-warmimg game-disk after a few hours of playing a 3D-game? DVD-drives do not like heat any more than hard-disks.

And this new 3-year warranty does not solve the fundamental design problems. It just delays the customer-whines. The poor user who has a failure will probably get somebody else's patched-up box in exchange (and still with the same fundamental design flaws).....certainly not a new one, regardless of any future design improvements. Also, with the new 3-year warranty, is Microsoft now going to reimburse all those Xbox360 owners that took out 3rd-party extended warranties?

Recommendation: Open up your Xbox360 (if you still have one that is trouble-free....) the day when the warranty expires and thoroughly clean the internals. ( Sorry, can't do it beforehand-- breaks the warranty-seal) Repeat the exercise every six months.

BTW, the addition of an extra GPU heatsink in the Xbox360 Elite is a giggle since it does not address the real problems. When (NOT if) the main heatsinks block up with crud, that extra heatsink will be totally starved of forced-air.

By Darthvoy on 7/5/2007 11:57:05 PM , Rating: 2
looks like microsoft should have hired you during the design process.

By kilkennycat on 7/6/2007 12:54:38 AM , Rating: 3
Thanks for the compliment, but I prefer to work with smaller and more flexible outfits. I would hope that the upcoming version of the Xbox360 with the 65nm chip-set has been radically redesigned from ground-up for **long-term reliability in typical user-locations**, not just the same ole' layout and physical package with 65nm chips slapped in place of the 80nm ones. A very small fraction of the $1billion would finance a complete package overhaul of the Xbox360.

I have a lengthy background in design for high reliability in both professional and consumer electronic gear. Designing for reliability is seldom a very expensive exercise even for consumer gear. For the hardware design team of a brand-new non-derivative product, such as the Xbox360, active and deep early participation in the reliability testing of the gear they have designed is essential. The design team generally knows where the design is likely to be weakest and can adjust the testing accordingly to hammer on those areas. Unfortunately, many companies contract out the reliability testing to "generic" test houses with no intimate knowledge of the design and its potential weaknesses. And such reliability testing is usually left too late to influence the core-design. The evidence of that with the Xbox360 is beginning to show, with bandaids such as liberal helpings of epoxy to hold down ball-grid ICs under which the solder is either melting away or crystallizing, because of poor thermal and ventilation design.

Unlike consumer-hardware companies with deep product portfolios and experienced hardware-design teams, such as Panasonic or Sony, Microsoft has no long history of hardware-product design. The Xbox360 is likely to have been a contract-design managed by MS personnel with little or no hardware-design background.

By EndPCNoise on 7/6/2007 1:15:21 AM , Rating: 2
So what are the chances of Todd Holmdahl, the Corporate Vice President of the Xbox Product Group, possibly meeting the same fate as Ken Kutaragi?

By KristopherKubicki on 7/6/2007 3:15:45 AM , Rating: 2
Very good post, and I remember it well.

At the time, there was a lot of concern about the thermal conductivity from the CPU to the HSF -- that was overplayed but eventually Microsoft changed that aspect of the cooling.

I think if you follow all the Xbox 360 criticism, almost every issued raised with the thermal issues received some kind of response -- eventually. Most people assumed the 65nm CPU shrink would address these issues, but here we are almost 2 years later without the shrink.

I really wouldn't be surprised if the shrink comes soon. Microsoft won't keep replacing the existing units with ones that will fail again in 2 years, and everything would indicate the technology is ready now.

By EndPCNoise on 7/6/2007 3:54:50 AM , Rating: 6
You may find this article from interesting...

The error, according to the head of Microsoft’s entertainment and devices division, Robbie Bach, is a “Microsoft design challenge,” not a glitch in the manufacturing process that can be blamed on an assembly plant. Bach said during a conference call that the company has been able to “engineer around,” some of the problems causing the error message, meaning that newly bought Xbox 360s will include hardware fixes, but that those devices won’t be completely redesigned to eliminate the problem.

Microsoft's own Robbie Bach admits it's their design and not manufacturing to fault.

Robbie Bach then talks about a half-a$$ed fix, which does not solve all the RROD problems.

It sounds like the XBOX 360 requires a total and complete redesign to stop these things from croaking. A simple a die shink to 65nm alone, without a redesign, is unlikely to make the XBOX 360 reliable.

By energy1man on 7/7/2007 1:46:01 PM , Rating: 2
This is the link to the location of the actual Microsoft investor relations call:

In the call they say say that the changes they have implemented should drastically cut down on any future occurrences. Taking them at their word the problems should be fixed.

They also commented on the cost breakout of the 1.15 billion charge. 50% to current one year warranty, and 50% to the warranty extension. In this they broke out the costs into two categories, one for repair costs where feasible, and the other for writing off units that are not economically feasible to repair. This should mean that a significant number of people will be getting new units.

They briefly commented on engineering costs, saying that they changes they have made should not have an impact on costs going forward.

By Proteusza on 7/6/2007 6:50:18 AM , Rating: 2
Sadly, I'll bet people at the time (and probably some right now) are thinking what do you know, you dont work for a multi billion dollar company?

But clearly, you were right, and they were wrong, and the XBOx360 could have been far more profitable for them had they tested it properly.

It just goes to show the problems which corporations exhibit - they arent set up to solve problems which they dont understand. now that they know what went wrong in its design process (that being that they didnt ask someone like you to comment on its reliability or lack thereof). corporations have been seen to make the same bad decision twice, but time will tell if the next xbox is better.

question for you - why didnt they do a mini redesign to solve the problem? is it too expensive to change manufacturing processes once they have already begun? Surely the cost of fixing the flaw would be cheaper in the long run than bad press and mass returns?

By Lakku on 7/6/2007 9:24:40 AM , Rating: 2
Good post, except for the heating up of the game-disc issue. I assume you are refering to the fact the game disc itself is hot after you remove it from the 360, after extended use? Well, my PS3 does that with games and movies, so does my 360, and so does my Wii, all 3 make the disc pretty darn hot. My PC also heats up discs after I install a game, and it's nowhere near the rest of the components. I'm not sure the placement near the DVD drive has everything to do with that. Just my 2 cents.

By TomZ on 7/6/2007 1:51:49 PM , Rating: 2
I agree, and one thing to remember is that "warm to the touch" is no problem for most electronics. Most electronic components are good up to 70°C, which is about 160°F, which is pretty hot to the touch, and probably would burn you with a few seconds of sustained exposure.

By bob4432 on 7/6/2007 5:11:53 PM , Rating: 2
i would really like to know what type of thermal compound they used - when i took mine apart to have the gpu hs milled down perfectly flat it was more like some type of tar instead of a thermal compound. removing the xclamp, milling down the hs surface to a near mirror surface and using some as5 dropped the temp of my 360 quite a bit (sorry don't have any temp numbers, just by the feel on my hand) and also now the discs don't come out hot, they are now barely above ambient room temp.

so what is ms going to do about the people that went ahead and opened up their console after the 1yr warranty to fix their design flaw??

my copper gpu prototype hs will be here soon and i will then see how much of a difference that makes :) :)

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