There would have been no Xbox One had Microsoft not greenlit the $1.15bn scheme to fix and replace broken Xbox 360s hit be the Red Ring of Death.
In a detailed interview with IGN, as transcribed by Eurogamer, former Xbox man and current EA exec Peter Moore recalled the tough road leading up to the moment he had to present the $1.15bn figure to his bosses.
"We were seeing failure rates and starting to get reports through customer service. This was a thing where we couldn’t actually figure out what was going on. It was sickening," Moore said.
"I remember going to Robbie Bach, my boss, and saying, I think we could have a billion dollar problem here. I said to Robbie, we’ve got to tell Steve [Ballmer]. Here’s what we have to do: we need to FedEx an empty box to a customer who had a problem – they would call us up – with a FedEx return label to send your box, and then we would FedEx it back to them and fix it.
"I calculated with my finance team – $1.15bn, right out there. I always remember $240m of that was FedEx. Their stock must have gone through the roof for the next two weeks. And, I am trembling sat in front of Steve, who I love to death, but he can be an intimidating human being. Steve said, ‘okay, talk me through this.’
I said, ‘if we don’t do this, this brand is dead, we’ve got to take them all back, and we’ve got to do this in a first class way,’ because when you take a console away from a gamer, and you’re going to spend three weeks fixing it… so we’ve got to FedEx this all the way. We’ve got to FedEx this all the way. We’ve got to overnight it back in two.
"He said, ‘what’s it going to cost?’ I remember taking a deep breath, looking at Robbie, and saying, ‘we think it’s $1.15bn, Steve.’ He said, ‘do it.’ There was no hesitation. I’m thinking, I’m about to crater Microsoft’s stock. Actually, nothing moved."
All of which, Moore believes, means Ballmer should effectively be credited with saving the Xbox brand
If you’re an Xbox gamer, you can thank Steve Ballmer for not even hesitating,” he continued. He didn’t even think twice about spending $1.15bn to protect a brand that’s probably worth three or four times that today.
Now, we were a wealthy company who could afford to do that, but not even hesitating because the brand was more important. 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."