The entire Xbox brand might have ended several years ago if Microsoft's now former CEO Steve Ballmer had not made the decision to spend over $1 billion to deal with the "Red Ring of Death" crisis that hit the Xbox 360 in 2007. That's the word from former Xbox executive Peter Moore in a recent podcast interview that centered on Microsoft's game consoles.
Moore, who currently works as a top executive at Electronic Arts, stated in IGN's latest Podcast Unlocked episode that Microsoft was seeing very high hardware failure rates on the Xbox 360 after its launch. He said that the situation was so bad, he felt he had to schedule a meeting with Ballmer and then Xbox head Robbie Bach to let them know how much money it would take to fix things:
I calculated with my finance team, Dennis Durkin (now the Chief Financial Officer of Activision), Doug Ralphs (then Senior Director of Finance at Microsoft's Interactive Entertainment Division)... $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."
Moore brought that information to Ballmer at that meeting:
"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."
Moore said that Ballmer's decision not only saved the Xbox 360 but the entire Xbox brand:
"It was that moment of decision that Steve Ballmer made, that I will never forget. He didn't even think twice about spending $1.15bn to protect a brand that's probably worth three or four times that today. Xbox One wouldn't have happened."