Supposed MS insider discusses RRoD errors, Falcon at 10% failure rate?

[paawl]

I think the best evidence that MS fully expects all rev0 360s to fail within 3 years is this:

MS announced a charge of ~$1 billion to extend the RRoD warranty to 3 years, meaning that this billion doesn't even cover failures in the first year of the then-existing warranty, and it still doesn't cover failures other than RRoD.

Back before the repeated warranty extensions, MS charged ~$100 for repairs.

The money that MS set aside is therefore enough to refurbish ~10 million consoles during a two-year period.

MS had shipped approximately 10 million rev0 consoles at the time they made the warranty extension announcement.

Many commentators and industry analysts noted this at the time of the announcement.

Personally, I think MS knew that they were shipping 10 million "lemons", doomed to premature failure, but did so anyway, denying the problems until they had a solution (the rev1 console), then announcing the warranty extension. It was a cold, calculating, deceitful move on their part, but MS would happily trade ~$1B in extra warranty repairs for the apparently insurmountable lead that they now have on Sony. Remember that MS's Xbox division has lost ~$5B since inception. What's an extra $1B if it pushes you over the top and secures your place in the living room?

Really, what else could MS do? Stop selling 360s and announce a recall during the one year head-start over Sony that MS worked so hard to get?

 

[wco81]

Just curious, are X360s in other regions also suffering the same rate of failure?

Is MS handling things similarly? I guess in the EU, they already have a 2-year warranty mandated by consumer laws?

But do Euro gamers have to send in their units in the mail just like in the US?

 

[fearsomepirate]

It doesn't make any sense that MS would intentionally ship an item with a 30% failure rate that they knew of.

According to the interview, MS didn't "know" they would have a 30% failure rate. They knew a lot of defects were being found right off the line (which always means more defects you aren't catching), knew that they still had a lot more testing they should probably do, but gambled anyway because of their need to beat Sony to market. This is not the first faulty, underdeveloped product MS shipped and then had to cover its butt on. Remember Windows 95? Or 98? Or ME? Or the huge security issues with XP?

I suspect that people put up with huge defect rates in game consoles the for same reasons addicts put up with huge death rates among heroin users.

 

[D3B]

Seems EB Australia has a big RRod problem.
http://www.kotaku.com.au/games/2008...llion_worth_of_defective_360s_from_eb_oz.html

 

[Squilliam]

Seems EB Australia has a big RRod problem.
http://www.kotaku.com.au/games/2008...llion_worth_of_defective_360s_from_eb_oz.html

Apparantly they did a voluntary recall that preempted the MS RROD warranty and now microsoft refuses to take them back.

I could understand the rate of failure though, it gets to 45 degrees+ in some places. (113 for you, metric hating horse riding ludites.)

 

[PARANOiA]

That's very interesting for us Aussies. I have an EB on-the-spot-swap warranty and have had to use it twice in 18 months. What was most interesting was the first time I used it in April '07 it was quick and painless - I dropped my unit without hard drive or cables off, they popped open a new one and I was gaming again within the hour.

The second time I needed to use it in November or so they tried to stop me using my warranty. First, they said I couldn't use it at a different store that I'd purchased the warranty. Secondly, they said because they only had HDMI units they wouldn't swap my old one for a new one, so I'd have to accept a refurb unit. When I refused - since I paid for a new-for-new swap warranty that's what I expected - I had to argue with the manager for ten minutes. Finally he said "you're a dumb fuck who is not worth this shit" and stormed out back to get me a new model. Then he said he had a launch system that was running fine, and I should fix the poor ventilation in my house, since I was obviously the one at fault.

Obviously store managers are getting a bit pissed here, no doubt since it's impacting their bottom line.

 

[AlphaWolf]

Seems EB Australia has a big RRod problem.
http://www.kotaku.com.au/games/2008...llion_worth_of_defective_360s_from_eb_oz.html

So, exactly what were the morons at EB Aus trying to accomplish with their own recall? Do they employ a lot of engineers and techs and they were actually going to fix the problem?

I could certainly see MS being reluctant to take the units back after some guys at EB took it apart and played around with it.

It almost seems like it has to be a joke to me. Are the Australian EB execs really this stupid, did they just think they could give themselves some good PR and hoped that MS would foot the bill for it?

 

[Dave Baumann]

If you click through the links the original story indicate EB recalled due to hard drive issues.

 

[dobwal]

Apparantly they did a voluntary recall that preempted the MS RROD warranty and now microsoft refuses to take them back.

I could understand the rate of failure though, it gets to 45 degrees+ in some places. (113 for you, metric hating horse riding ludites.)

The recall seems be the result of faulty HDDs and not the RROD. Only the Premium has been effected as the recall wasn't for the Cores. Also, the recall was for all in-store inventory and not for customer returned units.

Alot of things seem fishy.

Why would EB lose $85.00 a console because MS extended the warranty for three years? Why is the loss tied to EB inability to offer its own three year warranty?

How is EB repairing units and why are they coming back dead from customers? Like the previous poster stated, when did EB gain the ability to repair something like RROD?

Why not post the actual transcript as its obvious something is lost in the translation by the author of the article?

I'd bet EB is trying to MS to take back all the defective units that they have collected due to their in-store replacement warranty. Its probably that EB set their in-store replace warranty's price too low to actually handle the cost of replacements and now trying to get MS to bear some of the burden of those costs.

 

[Squilliam]

http://www.kotaku.com.au/games/2008...llion_worth_of_defective_360s_from_eb_oz.html

Microsoft responds

We’re not going to comment on this.

Ohh sorry, I didn't read far enough through the site.

I think they pre-empted the manufacturer on this one so it's understanderble from Microsofts perspective. Also they seem a bit annoyed they can't sell their generally useless 3 year warranty. I used to work in retail, a typical $179 warranty cost use less than $70 and probably made the warranty provider a fair bit of cash as well. So it's understandable they would be annoyed by the 3 year RROD warranty.

Im getting a bit emotional here but *Pink Bunny*IT! Relying on deception and dishonourable sales tactics to remain profitable...

I'll leave this thread for a while to calm down. Extended warranties make me mad! It's silly really!

 

[scooby_dooby]

I'd bet EB is trying to MS to take back all the defective units that they have collected due to their in-store replacement warranty. Its probably that EB set their in-store replace warranty's price too low to actually handle the cost of replacements and now trying to get MS to bear some of the burden of those costs.

To be fair, no one could've expected the extremely high failure rate.

Best Buy charged me $50 (CAD) for a 2 year warrantee at launch, in order to make money off that, they would need the failure rate to be less than 10% over 2 years.

But, a retailer complaining about lost profits on a warrantee program is pretty pathetic to me. Boo-hoo, the one time you didn't completely rip off the consumer, and lose money, you want a refund from the manufacturer? Maybe it's justified, but I don't see walmart/bestbuy complaining.

Maybe EB just doesn't have enough clout for MS to care...

 

[sevanig]

Hehe, my mate has been waiting all month so he can swap his 360 at EB...
He calls them every few days, but still out of stock
Its pretty ridicules...

 

[vazel]

Maybe EB just doesn't have enough clout for MS to care...

hehe they're also probably pissed at them for making so much money on secondhand games.

 

[AlNom]

One-liner comments as such are considered to be trolling. You have stated no anecdote or reasoning to support your statement.

 

[lirionisbi]

Ok Mod I Apologize Thank U For The Warning

 

[lirionisbi]

man i've been kicked off txb and ps3forum in few hours. People hate the truth. Its freedom of speech they just can't handle me.

Ok Mod I Apologize Thank U For The Warning

My reasons are I thought obvious so forgive me for sounding such. The rrod of 30% would not considered unreleasable by sony and the wii(funny name). The overheating freezing is unbearable Ps3 doesn't do that. With only dvd i'm pondering the question why? I don't like the controller the headsets brak ez and aren't future proof. And live is where children roam free to say whatever they want. not so on ps3 thank God for non headset bundles. Im not a fanboy I owned 360 for 2 years and convinced everyone in my family to buy both xbox and 360.

 

[Shifty Geezer]

Recalls are made for dangerous products, not annoying ones. Annoying ones are left to the discretion of the company and consumers - if the consumers stopped buying the product, that'd show the market doesn't value low reliability, and that would send the message back to HQ to redesign the system. As long as people keep buying the system, that tells HQ that reliability isn't a factor they need to be overly concerned with. Then the choices to make are financial regards support under warranties (which also affects merchantability, as a poor warranty with poor reliability my impact sales).

It's the market that is sustaining XB360's current hardware situation. People haven't voted with their wallet against reliability. That said, perhaps some have, accounting for a pretty slow uptake of XB360's worldwide compared with other systems. eg. They haven't taken off in the EU in a big way. There could be zillions of reasons, one of which may be people thinking the system is unreliable. We'd never know the decision making process of the consumers to be able to make these calls though. All we do know is poor reliability has associated costs so cheap slapped-together engineering isn't always the cheapest path to the most profitable product, and poor reliability does decrease the merchantability of your product even if it's hard to get a measure on how much.

Other than that, those no reason for a recall. If it's not in the company's financial interests, and there's no legal reason to on safety grounds, calls for a recall are just coming from consumer who don't appreciate the principal of the market, where if you don't like it, don't buy it!

 

[Mintmaster]

A lot of you are saying gamers are really tolerant of bad hardware and don't care much about the RROD. Who's to say that 360 wouldn't have sold even better had this not happened?

I suspect that they have lost and will continue to lose a lot of sales everywhere because of this, especially in Europe. Anyone who would otherwise be sitting on the fence about whether to spend more for a PS3 could easily be swayed by this issue.

 

[Shifty Geezer]

I think that's true. The only problem is quantifying it and determining impact. It could range from a few lost sales to a severely stunted growth. I think research into market reaction would be worth any company investigating to gauge what they should plan for in future situations regarding both development of hardware with an eye on quality and an eye on response to dire quality that will repair lost consumer confidence, to strike the optimal cost/returns balance. After all, you can't just throw in the best quality everything without paying the price.

I suppose in MS's favour regards response, PS and PS2 have had major issues but gone on to do very well. It's not the same thing, but it may present the idea that hardware faults don't have as nasty an impact on sales as perhaps they do.

 

[Squilliam]

I think that's true. The only problem is quantifying it and determining impact. It could range from a few lost sales to a severely stunted growth. I think research into market reaction would be worth any company investigating to gauge what they should plan for in future situations regarding both development of hardware with an eye on quality and an eye on response to dire quality that will repair lost consumer confidence, to strike the optimal cost/returns balance. After all, you can't just throw in the best quality everything without paying the price.

I suppose in MS's favour regards response, PS and PS2 have had major issues but gone on to do very well. It's not the same thing, but it may present the idea that hardware faults don't have as nasty an impact on sales as perhaps they do.

When I was in retail, the "quality" issues of the PS2 lead a lot of people who otherwise wouldn't have considered it to by the Xbox. It was that quality difference that gave Xbox a few hundred sales through my store alone.

Maybe this time, quality issues are what is keeping the PS3 in the race? Though I suspect that by the end of the year, there will be no difference between the two in terms of quality and then you have that "free" three year warranty. All Sony have to do from here on out is match the Xbox, sale-for-sale, then eventually they will draw even enough for the differences not to matter. 42 million vs 50 million isn't a huge gap.