Gamers who have been playing consoles long enough might recall the unfortunate incident with the Xbox 360’s red ring of death from many years ago. Basically this resulted in the console “dying” and sending it back to Microsoft to get it fixed was pretty much the only thing gamers could do.
Unsurprisingly this cost Microsoft a lot of money and according to a recent interview on IGN (transcribed by Eurogamer) during their podcast, EA exec Peter Moore (who used to lead the Xbox team) recounted how had Microsoft’s then-CEO Steve Ballmer simply looked at the numbers as to how much it would cost Microsoft to fix the issue, the Xbox brand might not be what it is today.
According to Moore, the total cost of fixing the issue which included using courier services like FedEx to ship empty boxes to customers who would then ship it to Microsoft, and who would then send it back, amounted to a whopping $1.15 billion. In fact $240 million of that amount went to FedEx just in shipping costs alone.
Moore then recounted how he approached Steve Ballmer about the problem, after which Ballmer asked him how much it would cost to fix it all, to which he replied $1.15 billion, but instead of balking at the figure, Ballmer just told Moore to go ahead and do it. “If you’re an Xbox gamer, you can thank Steve Ballmer for not even hesitating. He didn’t even think twice about spending $1.15bn to protect a brand that’s probably worth three or four times that today.”
He also adds, “If we hadn’t made that decision there and then, and tried to fudge over this problem, then the Xbox brand and Xbox One wouldn’t exist today.”