Microsoft’s Billion-Dollar Xbox 360 Snafu

July 5, 2007

Today, Microsoft announced that it is extending warranties on Xbox 360 game consoles to three years because of the abnormally large number of general hardware failures its customers are experiencing. Purchasers have been reporting quality issues with Xbox 360 consoles all over the Internet for a while now. Microsoft also announced that it will take a $1.05 to $1.15 billion pre-tax charge against earnings for anticipated costs associated with Xbox 360 console warranty repairs.

Most of us don’t get to design products where there’s $100 million dollars just in the uncertainty of warranty repairs, much less a billion dollars worth of repairs and replacements. However, this episode stands as a not-too-gentle reminder that designers ignore manufacturing margin and manufacturing quality at their peril.

Posted by Steve Leibson on July 5, 2007 | Comments (7)

July 20, 2007

In response to: Microsoft’s Billion-Dollar Xbox 360 Snafu
Brian Dipert commented:

My Xbox 360 Elite teardown link is here: www.edn.com/blog/400000040/post/940012094.html

July 10, 2007

In response to: Microsoft’s Billion-Dollar Xbox 360 Snafu
Plumbum commented:

If this is a RoHS compliant product it could be a combination of things including tin whiskers.

July 6, 2007

In response to: Microsoft’s Billion-Dollar Xbox 360 Snafu
JH commented:

I'm not really suprised... based on M$ software! Why would they think they could design hardware when they can't get software correct? www.ackv.com

July 6, 2007

In response to: Microsoft’s Billion-Dollar Xbox 360 Snafu
Darrell Ray commented:

I am looking forward to the teardown. Gives us fellow engineers a chance to learn from other's mistakes...

July 5, 2007

In response to: Microsoft’s Billion-Dollar Xbox 360 Snafu
Brian Dipert commented:

In EDN's July 19th issue, both online and in print, I'll have a complete Prying Eyes teardown both of the Xbox 360 Elite and its Core/Premium predecessors....including lots'o pretty pictures. Among other things, they'll reveal some of the interim fixes (think epoxy) MS made on the Elite to fix the GPU solder joint reliability issue....along with the more drastic measures (think additional heatsinks and airflow control) being added to consoles sent in for repair. Stay tuned....

July 5, 2007

In response to: Microsoft’s Billion-Dollar Xbox 360 Snafu
Steve Leibson commented:

Everything I've read online indicates that the root cause of the failures is inadequate heat removal. The most common thread of observations suggests that the failures are due to board warping and solder cracking caused by overheating. The credible fixes include better thermal compound on the graphics processor, heat-sink lapping to better affix the heat sink to the processor die, better fans to exhaust the waste heat, and (incredibly), gummy-eraser-based spacers stuck to memory chips to prevent further board warpage. Counterfeit components do not appear to be factors, although they can never be ruled out these days.

July 5, 2007

In response to: Microsoft’s Billion-Dollar Xbox 360 Snafu
JB commented:

Given the spike in failures, you have to wonder if a major batch of counterfeit components made it into these XBox consoles. Anyone heard anything to this effect? Warranty and repair costs are just another line in calculating the cost of counterfeit.

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