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Peter Moore: 'Xbox One wouldn't have happened' if Steve Ballmer had not saved the Xbox 360

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."

Source: IGN; Via: Eurogamer

107 Comments
  • Thank you Steve.
  • Greetings from Portugal Steve Ballmer!
  • Amazingly, Steve didn't heard you.
  • A big "Thank You"-Salute to the new Clippers Coach from Germany
  • Not a coach brah
  • Owner, yeah i know... this ish slipped just out of my hand...
  • He did it for the developers.
  • Where would we be today without this super-important entertainment device? Our civilization surely would have collapsed!
  • Developers Developers Developers :) Steve for president
  • All hail to Steve Ballmer.
  • Hail Steve Ballmer!
  • Kind if cool. He gets alot of hate, but I I never knew that about him.
  • I always loved how well they dealt with that. Quite admirable
  • That's good no-nonsense decision making, right there.
  • He's always been the type to keep throwing money at things even if they don't work. Every once in a while it paid off ...many times it didn't.
  • You do know that Steve inherited Microsoft at a time were Microsoft was most hated (around the 2000s).
    During his tenure as CEO of Microsoft he grew revenues and profits every year. He branched out and is possibly the soul reason why Microsoft has so many billion dollar businesses today.
    When he handed Microsoft over to Satya, Microsoft had become a huge company with no problems there huge war chest could not buy them out.
    Steve gets a lot of hate, but he deserves a lot more praise and a lot less hate. He ran Microsoft extremely well, despite some personal blunders (publicly laughing at the iPhone for example. But hey, in Steve's defense, the entire industry thought the same way, he was just the only one with the balls to express it publicly).
  • Agreed. Opposite of EFlop.
  • Stop it with Stephen Elop too... I'm typing this from a LUMIA (920).. Some of the best devices Nokia made in its history....the whole Lumia range was for everyone... With choices at every price point...(though now its flooded) With differentiation among them..but still representing a common design philosophy ... I say this was very good..many advancements in the windows phone os itself was due to extensive work done it by Nokia.... Stephen Elop tries his best. But the market was and is too,tough...
  • I agree with you. Elop did his best. He had the connections with Microsoft, he was able to strike a deal with them Nokia could have never had with Google. The did release a complete set of Lumia devices in every price range. He played it by the book. There would have been a huge chance that Nokia as a company would have seized to exist if they went full Android. The would have lost against the powerhouse that is Samsung and there would have been no incentive for Microsoft to buy there handset division.  
  • That's how businesses operate. Ask Coca Cola, IBM, 3M, etc., what the failure rate of new products are and it's quite high...
  • I never liked Ballmer but I gotta say...he''s got balls.
  • RIP Steve Ballmer
  • Lol!
  • That kinda went far.
  • Ballmer really doesn't get the credit he deserves sadly, sure some of his decisions were questionable. But to tar all of them with the same brush would be doing his tenure a great disservice.
  • Ballmer was a great guy with a fab personality. Bill gates is a legend with a gift and a kind heart. Satya doesn't seem to have much a personality but his business decisions are clever and taking Microsoft in the right direction.
  • Man, Satya kind of reminds me of the indian version of the late Steve Jobs (RIP)
  • No way, Satya is a very nice and laid character.
  • Nice and laid ? Haha. Not just laid back? Of course if you are nice and laid it goes without saying that you are probably laid back as well!
  • Satya will RIP windows phone and all of Microsoft's females exec's
  • Yeah he will.
  • I hated Ballmer purely for his personality. Truly cringeworthy antics on stage, bellowing like a used-car salesman all the time etc
  • Wonder how much they spent giving out 1 month gold cards during this time
  • Nothing, gold fees pay for maintenance, any product development costs were already recouped by then
  • Steve is the man.
  • Admirable move for Xbox.
  • Bring Ballmer back and get rid of this dumb sh*t running things now. Its amazing how much worse you dont realize it can get until the change comes.
  • Microsoft is on course to becoming a software giant again. They are moving in the right direction. Nadella is an astute head and is doing exactly what it takes to get Msoft where they belong
  • I agree. Satya Nutella should be sacked!
  • Several years from now, Windows Central will post a blog titled: "'Xbox Two wouldn't have happened' if Satya Nadella had not saved the Xbox One" The question is: How much will it cost then? I kid by the way. I am planning on upgrading my PS3 to an XBox One. Please don't kill me.
  • XBOX 4K
  • I wonder what the next xbox console will be called 3-4 years from now?
  • 3-4 years, that a joke? Cuz I laughed....
  • How it's this even a joke? It's the xbone experiencing hardware issues?
  • Does a console have to have only hardware issues to be saved? Did the Sega Dreamcast have hardware issues? Did the Nintendo Virtual Boy have hardware issues?
  • Virtual Boys hardware issues were the red and black screens, and sucking so terribly... Nothing could have saved it. Dreamcasts hardware issues was it being so easy to pirate games for it. I was young, and didn't know any better so I bought tons of five dollar knock off games for it in Chinatown. I still regret that. RIP Dreamcast, the world didn't deserve you.
  • Phil Spencer, actually. As soon as he came on board the Xbone refocused on games, dropped the Kinect and thus the price leading to a very necessary sales boost in the second holiday period.
  • XBOX ONE80
  • You made LOL. Thank you.
  • Something Nadella probably wouldn't do
  • A good company always backs their product.
    Consistently negative reviews are immediate death to a brand.
  • Yes u da best I love my xbox one !!!
  • A huge mega "Thank You" Steve from the Republic of Ireland
  • I remember this, I used to be a technical support representative for Xbox 360 hardware. I received lots of three red lights calls from frustrated 360 owners, but when they hear about the free shipping, it somehow changes their mood.
  • Like I said, it was "hassle-free".
  • I recently had an issue with my One, and I am glad to say it was still hassle free. In almost no time talking to the rep, he scheduled the replacement. A new Xbox came two days later, with the box and shipping label to send the broken one back, and a free month of Live. Perfect.
  • I forget the issue, was it mainly overheating?
  • I find the contractor in canada is quite incompetent(they have a center in Mexico I hear for bb repairs) sometimes id get a refirb that had a different problem then id have to send it back
  • I doubt Satya would do the same. Steve had a passion for MS that will never be replaced or duplicated.
  • +1520
  • Ballmer is the Man! So sad to see if/when Nadella destroys MSFT.
  • xD
    Why do you all think he destroys MS? Since he took the lead MS really turned around. It is starting to be "cool" again. Likeable. Especially their new way of really hearing the customer feedback and in general providing the platforms to give feedback is awesome.
  • Everything you're seeing except azure, deals with salesforce/ SAP, and the cancellation of the surface mini is all Ballmer's doing:
    Ballmer approved
    1. hybrids computers/tablets
    2. Windows phone make over
    3. Windows as a service; all the way up to red dawn or whatever it's call after Windows 10 which we're just getting to
    4. Xbox, Xbox360, Xbox1
    5. Office for ipad/andriod
    So again, outside of azure, the relationships with salesforce, sap, cancellation of surface mini, and the soon to be windows 10 Linux distro, what's really new that Satya has implemented? Don't get me wrong, I like him, but won't go giving him credit for things he didn't do. And to be honest, even azure and hyper-v, etc had to be approved by Ballmer because these things take years to implement, not 16 months like many of you here seem to think!
  • Well said mate.
  • Excellent!
  • Excellent! Never understood why Steve Ballmer got so much hate.
  • Same here. I always like him, and his energy. GE ran a successful business for a long time. Whatever with the haters...
  • Don't they have insurance for situations like this ?
  • No, it's the risk of doing business.  Nobody is going to insure something like that.  I don't think there are too many insurance companies offer policies for "console manufacturer screwups" and can cover a billion dollar loss.
  • I was happy Microsoft took care of its customers. I myself "replaced" 3 Xbox 360 but It was "hassle-free" and it's also why I'm still with Microsoft Xbox One now.
    Good job Mr Ballmer.
  • Agreed. I went through three myself and I'm glad they swapped them out. I'd rather they had designed them properly from the start but it's the sign of a great company how they get on top of things.
  • And the Xbone killed WMC, so I'll be sticking with my 4 x360s for now.
  • steve ballmer him self was a mistake that should have never happened to Microsoft 
  • Ballmer was probably MS's biggest fan. Too bad he just was horrible at public speaking.
  • Steve doesn't get the credit he should. A lot of today's stuff is thanks to him.
  • Agreed, see my correspondence above.
  • Sometimes it's needed to keep pouring money into something that's no success. Surface is an example of that.
  • Or the Zune. WP. Vista. Humph ;)
  • Yeah, now ask Satya where the surface phone is! with surface holding its own and being recognized as basically its own high-end brand, there's no reason not to do it outside of satya wanting to market other cell phones outside of WP. With all of your services going to competitor device first, it gives those potential customers no reason to move to WP, however if you put it on your devices first for a limited amount of time then migrate those services to other platforms then you give yourself a fighting chance (ballmer had this right i think also, however, Satya, put the others first....he could have at least given it to all platforms simultaneously). I'm hoping windows 10 mobile gives wp a second chance because i thinks its really good!
  • Agreed. Hopefully w10 is the kick in the pants the platform needs!!!
  • Seeing the current direction of Windows and Xbox Steve Ballmer is very much missed. Windows 10 is so bad I'm exploring switching to Android.
  • Windows 10 isn't bad, I think your just over exaggerating now. Build 10149 is actually very smooth and simple to use. It still beats Apple and Android unless your going to point out the old stop gap thing. Windows 10 I'd the first of build around user requests; it's such a move away from the norm that Apple had even laughed a feedback/suggestion portal to mimic what Microsoft is doing, yet boo media outlet seems to point those things out outside of Windows central
  • Lol u compare a desktop operating system to a mobile operating system which is a Linux ripoff. Anyone talented could have made a better version of mobile os then android. But life is all about marketing.
  • The thing is, Microsoft was one of the leaders of the living room. Google and apple were not in it yet, just Sony and Nintendo, and it was one turf u cant give up. Its retarded to give it up. 1.15 billion is nothing.
  • Thank you Steve Ballmer. That was truly a great thing.
  • Thanks Steve!  It's this type of reverence to a fan base that makes me respect him quite a bit.  I remember when this was happening and while it was frustrating, I was incredibly impressed with the quality of service and the perfectly orchestrated logistics that they figured out with FedEx.  From local repair facilities that were spun up within weeks to the ease of getting a replacement configured.  ​
  • Xb1 is still an example of bad cpu design that continues @ amd. Their standalone video cards are still great haven't had a problem yet
  • Steve Ballmer, if you ever read this (which I doubt) Thank you very much from the bottom of my heart! It is thanks to you that I've been able to have countless hours of entertainment with my xboxs :}
  • It's going to get even bigger with Satya Nadella ;) Trust me on that!
  • Wow, so its real: Ballmer is crazy...XD
  • Thank you Steve Balmer! On a side note, I find my son "Balmering" all the time. Lol. He's six months old and can't walk. But when I stand him up... It's all laughs. If you don't know, look it up people.
  • It's not hard spending 1.1 billion of someone else's money tbh
  • My 360 Elite lasted 5-6 years before the RROD. I was lucky. Fixed it myself with new thermal paste and voila like new.
  • Steve, thank you so much! You may have not had the best time at MS, but as a long time MS and XBox fan, I must say thanks! Posted via the Windows Central App for Android
  • Peter Moore was also head of Sega USA during Dreamcast.
  • Ballmer made the save but saddly he dropped the ball with the Xbox One launch.  The Xbox One is still paying the price for that mistake.
  • Steve....you da real mvp
  • The Xbox should be taken seriously by Microsoft with windows 10 I want Microsoft to make revolution in gaming industry. Gaming is important.
  • I like the cut of his gib
  • While I haven't listened to the podcast, I can say from first-hand experience (and based on what is written here) that Moore is doing a bit of retconning of Xbox 360 history. He treated the early adopters that first complained as "insignificant" based on his interview with Dan Hsu so long ago. It wasn't until Dean Takahashi of the San Jose Mercury News (now with Venturebeat) helped take him to task that Moore admitted there were problems. The Powers That Be at MS knew they rushed the launch and it cost them dearly.
  • thank you
  • thanks
  • I like the cut of his gib
  • new reply
  • asdasdasd
  • ffghfgh ffff
  • The Xbox should be taken seriously by Microsoft with windows 10 I want Microsoft to make revolution in gaming industry. Gaming is important.