Games
Microsoft's US$1 Billion Xbox 360 Recall Problems Caused By Chip Cheapness
Posted by Jason Chen at 4:30 AM on June 12, 2008
Microsoft's red ring Xbox 360 problems have cost the company about a billion dollars in warranty repairs, but the research vice president and chief analyst at Gartner said that the hardware problems were caused because Microsoft wanted to be cheap. Instead of using an application-specific integrated circuit (ASIC) vender to make a graphics chip for the 360, Microsoft decided to design it themselves and have Taiwan Semiconductor Manufacturing create it. This saved "tens of millions of dollars" in design costs. Yes, only tens of millions.
The good news is that when Microsoft said that their red ring problems are fixed on newer units, they were probably right. They went to "an unnamed ASIC vendor based in the United States and redesigned the chip." Probably ATI, is what EETimes thinks. Moral of the story is to not skimp on chip design so you can save tens of millions, because that may come back and bite you in the arse down the road. [EETimes]

Comments (AU Comments · US Comments)
dave
Posted October 26, 2008 3:21 PM
nvidia have been trying hard to cover up problems with their processors, couldn't be theirs?
dave
Rabid Penguin
Posted 5:28 AM 12/6/08
@noamjamski: But with the NES (Toaster model specifically) it was an issue with the 72-pin connector you hook your game too. $5 fix even without a warranty. And you can easily do it yourself if your are so inclined.
Rabid Penguin
imTheKing
Posted 5:26 AM 12/6/08
@noamjamski: Check failure rates. Just because your one single self proclaimed story hasn't had upsets, look at the mass view.
imTheKing
Munch
Posted 5:25 AM 12/6/08
@Rabid Penguin: Congratulations, Mr. 1,000,000th customer. Did they at least drop some baloons and streamers on you?
Munch
jrghoull
Posted 5:24 AM 12/6/08
you know i could almost swear i've read some posts on gizmodo/kotaku by guys who predicted that as a result of using cheaper chips that this was exactly what was going to happen.
to those who knew...kudos
jrghoull
imTheKing
Posted 5:24 AM 12/6/08
@typoink: I'm sorry but did you just compare the MS made mouse and keyboards to Logitech. You must be out of your mind. And the Zune? Microsoft is always about cheap entertainment.
imTheKing
noamjamski
Posted 5:20 AM 12/6/08
If this is being hijacked into a wacky console death thread, I am an agnostic console junkie. I buy them all to sidestep exclusives and the console wars. I even have a launch Dreamcast that still works! My 360, which is from the second batch post launch still works.
My only console since the Colecovision that ever outright died on me? My 40 gig PS3 which I bought in December. I was watching a rented Blu Ray of the Departed and the disc drive stopped reading. Anything. A quick Google search showed this is a very common problem. Luckily it happened about three weeks after I bought it so I sideswapped customer support and exchanged it at Circuit City. But I found it wild that all of my notoriously unstable systems (Dreamcast, NES, early 360) still sputter along while the rock solid PS3 kicked the bucket.
noamjamski
Ztealth
Posted 5:18 AM 12/6/08
what are the chances, i had disc reading problems on my ps3, i heard there is only a 2% chance of it happening. i have gone through enough xbox 360 rrod to make me stay away from them...
Ztealth
Kaiser-Machead's got LindsayJoy's cookies on the SuperDrive
Posted 5:18 AM 12/6/08
@typoink: I dunno man, but I think their original Zune has a more robust build than the newer ones.
Kaiser-Machead's got LindsayJoy's cookies on the SuperDrive
cloudnine
Posted 5:11 AM 12/6/08
looks like apple did the right thing by buying their own chip producing company :P hah.
cloudnine
Rabid Penguin
Posted 5:09 AM 12/6/08
@Munch: It's hard to beat the prices. Just last week I got a free iPhone. I went to hand the dude the money and then I heard some sirens and they fled leaving me the iPod for free... I must have won some sort of contest or something.
Rabid Penguin
MastaFalse
Posted 5:08 AM 12/6/08
@theoldwolf: Where do YOU live? In Antarctica? Outside?
MastaFalse
fallenturtle
Posted 5:05 AM 12/6/08
And on the same day that Apple will reportedly start designing some of its own chips to save money...
fallenturtle
theoldwolf
Posted 5:04 AM 12/6/08
I've had a 360 almost since launch - my machine was built on 12/15/05 so it's definitely from one of the earliest batches - and I've never had an issue at all. Yes, there's a design flaw that will kill your 360 if it overheats (at all), but if you keep it well ventilated you stand a pretty good chance of not running into the RRoD.
theoldwolf
typoink
Posted 5:04 AM 12/6/08
@nick: What are you even talking about? MS has never made "cheapo" hardware. Their keyboards and mice are expensive and top-notch (equal to Logitech, though I prefer Logi mice). Their MP3 player is, quality-wise, above anything in its class.
And their software is usually rather expensive, to boot.
I can hardly recall any "cheap for the masses" major Microsoft products.
typoink
qwijybo
Posted 5:03 AM 12/6/08
I still get a laugh out of the people on the Xbox forums who blame certain games for the failure. Here's a quick impression "DONT PLAY TEH HALO3 IT SUCZORRZ IT CAUZED RROD ON MY XBOX, WHY CANT THEY MAKE GAMES TAHT DONT BREK THE BOX"
Kudos to Microsoft for taking a bit hit on the repair costs, the fans appreciate it even if a few bad apples think otherwise.
qwijybo
ttech10
Posted 5:01 AM 12/6/08
@blindaxs: I think he means what units can you buy NEW that are the new units. Like are they supposed to be the "Elite's"? Because those RRoD as well.
And no, the ones you get sent back are not the new ones because I have friends that had their "new" units RRoD on them... as soon as they got it back from MS!
So, it seems that these "newer units" without the crappy chips (that MS designed) aren't out yet really because the Elite's have the problem... as well as the "new" units getting sent back by MS.
ttech10
DigitalReaper
Posted 5:01 AM 12/6/08
Still running my launch machine with no issues. **crossin fingers** Hopefully the cheap bastards learned a lesson or two.
DigitalReaper
snitch29
Posted 5:01 AM 12/6/08
Why save billions we you save millions????
snitch29
exkon
Posted 5:00 AM 12/6/08
@Monty:
I have to agree, at least MS kinda fessed up to their mistake and extended the warranty.
The newer units failure rates are really improved. I have an older 360 model (no problems ever) and a newer Elite model, no problems so far.
@DomZ:
Don't EVER call the next version of the xbox the "720" that would be the WORST naming convention ever.
I would assume the 360 would be the 360 degrees of coverage for multimedia entertainment.
What would get you with 720? Nothing extra.
exkon
tamaudio
Posted 5:00 AM 12/6/08
@blindaxs: right, so my "repaired" unit is the "new" variety?
tamaudio
SecretAsianMan
Posted 4:58 AM 12/6/08
This was posted on Slashdot yesterday and the commenters tore it to shit. The article is BS and the guy cited doesn't know what he's talking about. It's very very well documented that the GPU was designed entirely by ATI and Microsoft did not attempt to design their own GPU.
SecretAsianMan
Munch
Posted 4:58 AM 12/6/08
@Rabid Penguin: Maybe it's time to start shopping elsewhere - like not out of the back of a truck.
Munch
Ken_Darrow
Posted 4:58 AM 12/6/08
Thats why your better off getting a PS3. With BR player built in, movies looks so sweet.
Ken_Darrow
Rick36
Posted 4:54 AM 12/6/08
So wadja' expect from M$? Everything is done on the cheap except Bill's house, Allen's yacht, Myrvold's toys, etc., etc., etc.
Rick36
execrationist
Posted 4:53 AM 12/6/08
I didn't even get the red ring of death. I got error 74 and one red light, which is apparently only covered for one year. $99 for the bloody repair!
execrationist
Kaiser-Machead's got LindsayJoy's cookies on the SuperDrive
Posted 4:51 AM 12/6/08
Why make billions, when we can make......millions? *pokes lip with pinkie*
Kaiser-Machead's got LindsayJoy's cookies on the SuperDrive
Rabid Penguin
Posted 4:51 AM 12/6/08
I've never had any problem with any of my consoles, not even my 360. Handhelds is a different issues altogether though. My first Nintendo DS and GameBoy Advance SP both came preloaded with dead pixels, and the PSP I bought on release looked like someone left it out in a hail storm.
Rabid Penguin
nick
Posted 4:48 AM 12/6/08
yea, microsoft is all about quantity at a low price, not quality at a high price... which seemed to be the ps3's goal at launch
nick
SigmundTheSeaMonster
Posted 4:46 AM 12/6/08
Recall? I don't think so. More like "We'll give you two more years...suckers".
@discounteggroll: Wasn't just the iMac that had bad caps (IBM, Lenovo, HP, Dell...). Industrial espionage was the reason the capacitors failed. Someone took the plans from one company and undercut their cap sales with their own. Too bad they missed a page on the chemical needed and the cheap caps swelled and failed.
BTW, I'm on my 4th Xbox (first Elite). Now who's a masochist?
SigmundTheSeaMonster
Chromeo
Posted 4:42 AM 12/6/08
Launch 360 crapped out on me. Although I blame it on a combination of the "chip cheapness", and my using the Intercooler, which caused some pretty interesting charring effects...
2nd model is doing fine now!
Chromeo
Munch
Posted 4:41 AM 12/6/08
@discounteggroll: Dell had that same issue
Munch
Munch
Posted 4:40 AM 12/6/08
Nice. Hopefully other companies will learn a lesson before shipping out shitty products.
Munch
discounteggroll
Posted 4:40 AM 12/6/08
kinda like the capacitors in the iMac.
::black van with denim blue rims pulls up and throws me inside::
discounteggroll
blindaxs
Posted 4:40 AM 12/6/08
@XDoctor:
The ones you got back after you sent them in for repair?!?
blindaxs
Monty
Posted 4:39 AM 12/6/08
The chips may have been less expensive, but it was Microsoft that was cheap.
Still, kudos to Microsoft for attempting to fix the problems and standing by the machine in the best and worst of times.
Do we know what the failure rate is of the newer version of Xbox 360 units? My understanding is that it is vastly better than the old units, but still vastly worse than PS3 and Wii failure rates -- but, as usual, I really have no idea what I am talking about.
Monty
XDoctor
Posted 4:37 AM 12/6/08
Which ones are considered 'Newer units'?
XDoctor
DomZ
Posted 4:36 AM 12/6/08
Hopefully they learned their lesson for the 720.
DomZ
exer881
Posted 4:33 AM 12/6/08
lol
exer881
rokstomp
Posted 5:54 AM 12/6/08
PS - I like to state the very obvious.
rokstomp
rokstomp
Posted 5:51 AM 12/6/08
I just had a 7/21/07 HDMI 360 give me the RRoD. I had it for under a year. M$ replaced it. I have say I am very pleased with their customer service. I was playing on my replacement box a week after they received it at their service center.
As to whether or not this new box is more hardy...well, I guess time will tell.
rokstomp
ecsw
Posted 5:49 AM 12/6/08
I don't think it's fair to mention TSMC here. They simply take the design from MS. most of the nVidia and ATI chips are manufactured by TSMC as well.
ecsw
hybrid8
Posted 5:48 AM 12/6/08
Either the article's author is talking out his ass or the report here totally mis-interpreted it.
Nothing of what was written here about the Xbox360 is remotely true. It's a widely known fact that ATI designed the graphics ASIC in the 360. In fact it's the bloody original R500 previously intended for retail.
hybrid8
MagnoliaBoy
Posted 5:37 AM 12/6/08
I'm going to show my age a little bit, but the only two consoles I've ever had issue with were the Atari 2600 and Sega Genesis. I went through about 4 units each. The issue being the wall adapters would explode or sizzle up and burn out the board on the console. Still have my Dreamcast, works fine though it's getting a little yellow. The last console I've purchased was the PS2 and it's still humming along.
MagnoliaBoy
typoink
Posted 5:36 AM 12/6/08
@imTheKing: I did indeed. I prefer Logi mice, but MS's aren't bad. And MS introduced the scroll wheel to the masses and invented the side-tilt wheel. Logitech's unmatched on the extra-high end, but the medium-grade mice from both companies are generally on pretty equal footing.
And, at the moment, I feel that MS keyboards are better. Especially the current MS Natural, which is the best keyboard I've ever used.
typoink
SpoBo
Posted 5:34 AM 12/6/08
Wasn't this public knowledge already that Microsoft skimped on everything with the X360?
SpoBo
noamjamski
Posted 6:23 AM 12/6/08
@Rabid Penguin: Heh, no my NES still works! If anyone mis-interpreted my post I wasn't bashing the PS3. I find it ironic that I have owned notoriously unstable consoles my whole life and it was the PS3 of all systems that died on me.
noamjamski
danger_the_pirate
Posted 6:22 AM 12/6/08
link to the ATI Xenos aka the 360s graphics chip. [en.wikipedia.org]
k im done now.
danger_the_pirate
danger_the_pirate
Posted 6:20 AM 12/6/08
@danger_the_pirate: "ati designed it" it being the graphics chip in the 360.
danger_the_pirate
danger_the_pirate
Posted 6:20 AM 12/6/08
yay gizmodo for posting complete bullshit! even on wikipedia the graphics chip is listed as ati. the problem with the 360 is that they had to use lead free solder, which people who manufactured the console were, apparently, not familiar with. this coupled with the fact that the cooling system is poorly designed (x-clamps!) is what is wrong with the 360. the confusion may lie with the fact that ati designed it, but microsoft has the rights to do what they want with it (die shrink!) which they didnt with xbox 1.
danger_the_pirate
imTheKing
Posted 7:06 AM 12/6/08
@typoink: ahhh I didn't realize you meant average priced mice / keyboard. I have a bad habit of buying the "top" most expensive item when it comes to just about anything haha.
imTheKing
BigViper
Posted 7:05 AM 12/6/08
what kind of pants does mario wear? denim denim denim :)
BigViper
twylight
Posted 7:30 AM 12/6/08
drop this article - is pure BS
twylight
Ryanraven
Posted 7:25 AM 12/6/08
I've had a few RRoD's and now i have one of those niffty halo 3 xboxes so i'm golden now i hope!
Ryanraven
dbc
Posted 7:19 AM 12/6/08
@danger_the_pirate: Even if this posting is complete BS, blaming the problems on Pb-free solder and poor heatsink clamping is utter delusion. Most of the feedback from those failures reported massive overheating. I would say that would only contribute to an additional 10 deg C temperature rise.
If the report is true, the engineering staff and production team deserve a spanking. It's OK to save some bucks, but the system obviously went into the wild without proper testing.
dbc
MINI Driver
Posted 7:07 AM 12/6/08
Is this the same MS team who decided to save money and not hire a designer for the Zune, and hence decided that sh!t brown was a 'really hip color choice'?
MINI Driver
keltic
Posted 5:18 AM 12/6/08
I see a lot of people acting like the PS3 is near flawless. If Sony's official claim of .2% failure rate is true, then they all just happen to belong to people who live near me. Cutting edge electronics have issues all the time. At least MS stepped up and took the heat. I recall not so long ago that the PS2 was dumping disc drives left an right. What did Sony offer? Oh yeah 90 day warranty...
keltic
diabolusunknown
Posted 9:21 AM 12/6/08
@MINI Driver: I thought you were banned?
Microsoft is no doubt responsible for the heat sink, which they can be blamed for. I always wondered why the ATI chip which had such a large heat sink for the PC got away with something so small on the 360. But anyways, still on Elite since its release. Open air stand is the solution to any of these problems. And that small sacrafice is worth the entertainment the 360 gives me.
diabolusunknown
Ariel_Wollinger
Posted 9:15 AM 12/6/08
I have a RROD on an Elite...
Ariel_Wollinger
danger_the_pirate
Posted 9:14 AM 12/6/08
@dbc: uh, no. wrong. overheating doesnt give the rrod. most of the failures are from shitty soldering in the bga under the chip. the x-clamps warp the board. shitty soldering + board warping + rapid heat up and slow cool down = recipe for epic failure. thats what they got. and i wasnt trying to imply this isnt 100% microsofts fault, it is, they screwed themselves in a variety of ways. also, most people think that if a lot of heat is coming out of the console, it must be overheating. im sure thats where a lot of the overheating reports come from. *sigh* [xkcd.com]
danger_the_pirate
robinandtami
Posted 9:08 AM 12/6/08
@theoldwolf: I agree with that. I got my first 360 on 12/18/05 (the second launch day.) It worked like a champ until I bought an Elite when they launched April 07. At that time I moved my launch box from the nice open airy spot I had it, into a poorly ventilated entertainment armoire. It ringed out on me the second or third time I used it in that location. I sent it back to MS in August (was waiting for the new chipset ot go into manufacture)and MS sent me back a brand new unit with a manifacture date just a few days old. I did NOT put it back into an armoire. Both my replacement unit and my Elite have been working just fine in open airy spaces.
I agree that you should not have to coddle your electronics like that, but when it is a well known issue and you choose to purchase the product anyway AND choose not to provide it with the extra ventilation it needs; I have no sympathy. People who keep getting RRoD after RRoD need to seriously look at where they are placing the console.
It's not like MS is the only one to have done this. Last years line of Onkyo receivers had terrible overheating issues with some even smoking and flaming. Onkyo has not gotten a black eye over it though. I guess people are just more passionate (fanboish) over game consoles.
robinandtami
wvv
Posted 11:24 AM 12/6/08
@ecsw: Yeah it definitely is not fair to mention TSMC. They are a good company, and if it is a design error it is on Microsoft's part and NOT TSMC, since TSMC does no design. They take a company's completed design and manufacture it. They make stuff for both Nvidia and ATI, and last time I checked those products weren't failing by the thousands...
wvv
gwolf
Posted 11:19 AM 12/6/08
Guess I am Lucky, I have had a 360 and PS3 for about the same amount of time and neither has died on me. I have to wonder though if the 360 is getting a better work out than the PS3, given the attach rates. When PS3 has as much content as the 360 will more problems start to surface?
gwolf
VeeDub
Posted 12:38 PM 12/6/08
I am on my 3rd 360... no more red ring o death. It will be a year since I got this one in October of last year. The problem I have is that although they finally gave me a brand new box the first one lasted 8 months before problems occurred. The box I am using now is getting closer o that point and this one gets more use than the previous. Fingers crossed that everything is okay.
VeeDub
SomeoneUKno
Posted 2:16 PM 12/6/08
@Rabid Penguin: Wait a second, the iPhone turned into an iPod?! Holy crap! Thats amazing! Its an apple product that can literally downgrade itself!
SomeoneUKno
oopl
Posted 2:03 PM 12/6/08
It's perplexing that the XBOX 360 still sells so well with all these problems.
oopl
Hello_Newman
Posted 5:48 PM 12/6/08
There is no excuse for heat problems. A 120MM fan run at low speeds is so cheap that it's not even an issue. If it's a hardware thing, if it's too small a hard drive, those are things that are obvious. If it's a case with bad ventilation, there's no excuse for millions of people boned just because some guy thought it would look more pretty without a fan that could handle it. Whoever did this lied on their resume' They simply weren't prepared to design a case that would be shipped to millions of people.
Hello_Newman
Knirfie
Posted 7:15 PM 12/6/08
Seems like a very weird story, the CPU and GPU were designed by IBM and ATi from the very beginning...
Knirfie
scarbrtj
Posted 9:25 PM 12/6/08
I keep my Xbox in a dedicated cold room, constant HEPA filtering and dehumidification of the surrounding atmosphere as well, and on its own dedicated circuit and industrial-strength UPS... and I have had *no* problems whatsoever for the past two years or so. Wtf is all the fuss about.
scarbrtj
A Puckish Satire of Contemporary Mores
Posted 11:38 PM 12/6/08
@exkon: 720 is one of the codenames in MS, AMD and whoever else is involved at this point. I don't think it will become an actual product name.
A Puckish Satire of Contemporary Mores
imTheKing
Posted 11:35 PM 12/6/08
@scarbrtj: thats solves the problem. invest thousands of dollars to keep your 360 in a dedicated cold room..... anything else captain? Do you have a special room where you have a robotic setup that grooms your cats as well since there is a "fine art of grooming cats"?
imTheKing
Rabid Penguin
Posted 12:33 AM 13/6/08
@noamjamski: I know what you meant. I was just merely pointing out that when a console fails today you have to send it away for a week and spend like $100 if it's out of warranty. If your NES ever does fail, it's around $5 and you can do it yourself :c)
@SomeoneUKno: All the "i" products confuse me.
Rabid Penguin
torched
Posted 12:27 AM 13/6/08
@scarbrtj: dehumidification below 50% would be bad for your system. A RH of 50% to 60% is recommended to minimalize static and static dust cling.
torched
cbearnm
Posted 1:17 AM 13/6/08
OK, I get it, MS is cheap so they deserve what they got. But I can virtually guarantee that this is not the only part that MS was cheap with. There are probably 10, 20 50 or even 100 other parts that MS subbed out that are working just fine. If they had not made these substitutions, the 360 would have cost around $1000.
It's real easy to look at a failure and trace back to the root problem. Virtually every electronics product has this same 'issue' to some degree. It is the nature of the business. It only becomes a problem (huge as it is) when that part is defective. This is not an uncommon practice by any means. It's only news because it was a very costly mistake.
BTW, I think the 'cold room' guy was being sarcastic. Maybe some people can't read into it.
Lastly, I know he was kidding about the industrial strength UPS, but MS recommends that you do NOT use a UPS with the 360. I checked with Belkin and they agreed, since the 360 power brick uses thyristors, a UPS can actually harm the circuit.
cbearnm
vinnyr
Posted 8:26 AM 12/6/08
Hey, I rock it old school, got me a gamecube, and an N64!
vinnyr
OrsonSiren
Posted 3:19 PM 12/6/08
in regards to the 2nd reply.... if you buy a 720 your the leader of the idiots! nuff said.... m
OrsonSiren
Fuzzims
Posted 6:54 AM 12/6/08
One thing to say.
HAHAHAHAHA good F them for making me wait two weeks to get mine back
Fuzzims
koolmoedean
Posted 4:36 AM 12/6/08
Vendor is spelled "O-r."
koolmoedean
shawnmeboy86
Posted 4:35 AM 12/6/08
stupid M$...sad face
shawnmeboy86
Tripnutz
Posted 4:34 AM 12/6/08
I went through 3 of them :)
Tripnutz
MINI Driver
Posted 11:44 AM 16/6/08
@diabolusunknown:
Only in your deeply disturbing Ballmer manlove dreams diabolusunknown
MINI Driver