Without that $1.15 billion lifeline, Xbox might not exist today. That’s what a former Microsoft executive said when recalling the infamous Xbox 360 disaster. The ‘Red Ring of Death’ cost Microsoft a fortune, with massive spending just to deliver new Xbox 360 units to customers.

Like most tech giants, Xbox has seen its share of triumphs and crises over the years. Perhaps the most notorious of these was the “Red Ring of Death,” a hardware failure that struck countless Xbox 360 units. The now-iconic red lights circling the power button signaled fatal malfunction. We know now that rapid heating and cooling caused the flaw, and fixing it burned a $1.15 billion hole in Microsoft’s pocket through repairs and replacement shipments. Addressing the crisis was hugely expensive, but if Microsoft hadn’t acted, Xbox could have vanished for good.

Peter Moore, Microsoft’s former head of Interactive Entertainment, discussed the ordeal with The Game Business. “A big chunk of that money went to… FedEx, UPS, DHL, or whatever express couriers we used at the time,” Moore recalled, referencing the huge bill. Xbox moved so fast that warranties were extended and ‘Red Ring’ consoles were swapped for working ones within hours.

That blow hurt Microsoft’s bottom line, but Moore insists the spend was essential for Xbox’s future: “I always say it was a defining moment. If we hadn’t done what we did, I’m not sure the Xbox brand would be around today.”

Xbox 360 and PS3: The Generation That Made Gaming Huge

The Xbox 360 and PS3 era was memorable for more than just hardware meltdowns—it marked a flood of investment into video games. “Both the Xbox 360 and PS3 made the industry grow immensely,” Moore said. “We pushed each other to do better and poured money into third-party developers. The sheer amount of cash flooding in was thanks to the fierce competition between Microsoft and Sony.”

“A rising tide lifts all boats,” Moore added. “Microsoft’s arrival created a tidal wave—billions spent on marketing, advertising, and R&D. Without them, there’s no way the industry would be where it is today.”

Source: 3djuegos