Beware the Red Rings Of Death
Newsweek, July, 2007 by N'Gai Croal
Even before Microsoft launched its Xbox 360 videogame console, there were signs it might not be ready for prime time. Shortly after the first units arrived in the hands of journalists and reviewers during the fall of 2005, the company's publicists requested that they be sent back because they couldn't properly connect to the Internet. And while the replacement units worked fine, the manufacturing gaffe caused Microsoft to launch with a significantly smaller number of 360s than it had anticipated.
Still, that embarrassment was nothing compared with what the Redmond giant announced last week: a $1 billion-to-$1.5 billion pretax charge to cover the costs associated with the 360's much-higher-than-expected failure rates. As a penitent Peter Moore, corporate vice president for...
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