Xbox 360 will make Christmas and beyond

Mike Bantick
Tuesday, 07 October 2008 05:46

Opinion and Analysis

Much of the hardware side has seemingly been traced back to Microsoft keeping production of the application specific integrated circuit (ASIC) in house.  A reluctance to outsource the ASIC and therefore design issues with heat dissipation looks to have been the cause of the resulting RRoD’s.

Given that Microsoft, was trying to cram the power of three PowerMac G5 towers into a little white box, and make it run efficiently and at an appropriate temperature, it is not surprising that any mistake with design would cause some sort of issues.

Keeping the ASIC design in house apparently save Microsoft tens of millions, but the subsequent RRoD fiasco cost approximately US$1 billion.

All this became clear around June this year and it now looks as if Microsoft has outsourced the ASIC design, probably to ATI (owned by chip maker AMD) for later Xbox 360’s.

The moral of the story?  In the world of game console manufacturing, being a loss leader on hardware is normal.  The longer term effects of PR loss can more damaging than the benefit of saving a bit on hardware costs.

The Xbox 360 is a solid gaming platform, filling, and overlapping much of the gap between the Wii and the PS3.  It has an excellent online service, a broad range of excellent gaming titles, as well as a modular design that allows options to the purchaser.

But Microsoft will be forever tagged with a poor quality public relations reputation.  If anything could bring on a premature demise of the product it is this tag.  The reality is, that it should be years before we see a replacement for the Xbox 360 hardware, but like the Vista, Windows 7 circus possibly dropping a whole new hardware platform onto the market prematurely is the answer to the Microsoft PR problem.