If comedy equals tragedy plus time, this one is hilarious: Microsoft is now selling $25 “premium posters” to commemorate the “Red Ring of Death,” a systemic hardware failure in early Xbox 360 consoles that cost the company over $1 billion to fix.
It may be a funny story a decade and a half after the fact, but in mid-2007, the RRoD error was incredibly expensive and damaging for the then-young console and brand. Microsoft’s stopgap solution to the problem was a three-year warranty extension that was said to cost between $1.05 and $1.15 billion dollars (closer to $1.5 billion in today’s dollars). The red-ring error was caused by heat issues and “a badly designed graphics chip,” and it wasn’t fully addressed until late 2008, when a new console revision with a redesigned motherboard and cooler-running chips was released.
In an interview in 2015, then-Microsoft VP Peter Moore said that the warranty extension, while expensive, was a “Tylenol moment” that helped the company prevent irreparable damage to the Xbox brand. He also credited then-CEO Steve Ballmer with the decision to spend more than $1 billion to fix the problem—”I always remember $240 million of that was FedEx,” he said. “Their stock must have gone through the roof for the next two weeks.”
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