How the Xbox 360 'Red Ring of Death' cost Microsoft $1.15 billion

Back in 2007, the fact that Microsoft spent over a billion dollars to improve its Xbox 360 warranty and repair policies became a popular game industry talking point; at one point as many as 23.7 percent of Xbox 360 owners were reporting console failures, many of which were accompanied by the infamous "Red Ring of Death."

But in an IGN podcast published this week, former Xbox exec Peter Moore shed a bit of light on what it was like to be working at Microsoft during that period, and to be sitting across the table from one-time Microsoft chief Steve Ballmer explaining that the Xbox 360 was going to cost the company an extra $1.15 billion.

"I am trembling sat in front of Steve, who I love to death, but he can be an intimidating human being. Steve said, ‘Okay, talk me through this.’ I said, ‘If we don’t do this, this brand is dead,'" recalled Moore.

"If we hadn’t made that decision there and then, and tried to fudge over this problem, then the Xbox brand and Xbox One wouldn’t exist today."

Microsoft went on to invest in a redesign of the console that addressed some of its shortcomings, and the Xbox 360 continued to see strong sales throughout its lifespan. However, the Xbox business has declined in recent months.

You can hear more of Moore's recollections of his time at Microsoft, as well as comments from his fellow guests (and fellow Microsoft veterans) Phil Spencer and Seamus Blackley, in the latest episode of IGN's Podcast Unlocked.