A former Microsoft employee reveals a secret about the infamous Xbox ‘red rings’: “I’m not sure it would exist today”
The Xbox 360’s red ring of death nearly destroyed Microsoft’s gaming division, until a billion-dollar decision changed everything.
The Xbox 360 was a landmark console, but it came with a catastrophic flaw. The infamous red ring of death (RRoD), a hardware failure that bricked millions of units, became one of the most notorious tech issues in gaming history. And according to former Xbox executive Peter Moore, it nearly ended the brand altogether.
A billion-dollar gamble
In a new interview with The Game Business, Moore revealed that Microsoft spent $1.15 billion to repair and replace defective Xbox 360 units. That included overnight shipping, customer support, and a massive recall effort. The decision wasn’t easy, but it was essential.
“If we hadn’t done what we did, I’m not sure the Xbox brand would be around today,” Moore said.
At the time, Moore had to convince Microsoft CEO Steve Ballmer to greenlight the expense. Ballmer approved it immediately, prioritizing the brand’s long-term survival over short-term losses.
A defining moment for Xbox
Moore described the crisis as a “bone pile” of failed consoles and a period of intense internal stress. Engineers scrambled to identify the cause, ranging from fan placement to soldering issues, while gamers wrapped their consoles in towels hoping for a miracle fix.
Despite the chaos, Moore believes the decision to take responsibility and act decisively was what preserved Xbox’s future.
“We felt that that was money well spent to hang on to a brand that we built, that we felt had huge viability going forward, and of course it does,” he added.
Why it matters today
With Microsoft recently undergoing another round of layoffs and restructuring, Moore’s comments land with added weight. They serve as a reminder that brand trust is built through accountability, and that sometimes, the most expensive decisions are the ones that keep a company alive.
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