During the Xbox 360 “red ring of death” scare, then Microsoft CEO Steve Ballmer chose to commit to spending $1.15 billion to fix the issue. For those unfamiliar, the red ring of death refers to an issue in the early days of the Xbox 360 that bricked the console. Microsoft’s brand took a hit for it happening in the first place, but likely would have been even more disastrous had they not taken costly and speedy actions to resolve the issue. Then Xbox’s (now EA’s) Peter Moore said in an interview with IGN (via Eurogamer) that without the $1.15 billion resolution “Xbox One wouldn’t have happened.”
In the interview Moore explained the moment they had to make the decision on how to fix the issue. It was a tension filled time that in hindsight affected the future of the Xbox line as much as any other moment. The long story short is that to fix Xbox 360’s having the issue, Microsoft would have to have send customers an empty box and have them ship their console to be repaired.
Another factor in this episode was that they didn’t know what actually caused the issue. This was a scary time for Microsoft and the Xbox team.
This process would be expensive regardless of shopping costs but Moore was worried that time was a large factor. He told Ballmer “'We've got to take them all back, and we've got to do this in a first class way” he then added in his interview with IGN “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.”
This is a great story from someone who has firsthand knowledge of the situation and shows us how tense it really was.