XpintoBox 360

july 8, 2007

In business it is a calculated risk when it comes to cutting costs. Microsoft just announced that they are taking a $1 billion (yes, with a "b" not "m") loss because of the repairs and warranty extensions for their Xbox 360. I am sure this has all to do with cost cutting while designing the Xbox 360. The hardware failures seem to be quite widespread with people returning their Xbox 360s multiple times for repairs. Not only is the entertainment division of Microsoft in the hole $6 billion since 2002, now it has this huge PR loss -- to which no monetary value can be attached. Robbie Bach has said that the company has made some manufacturing and production changes to lessen the hardware failures. The keyword is "lessen", not eliminate. That is unfortunate since this kind of thing will stick in the back of a consumer's mind when they are out shopping. See an Xbox 360 on a shelf? You might just associate it as the Ford Pinto of gaming consoles.