Counting Rupees: Once bitten, twice shy
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:

This past week, my 360 finally gave up the ghost. It began with an occasional hard freeze, and a day later was freezing every two or three minutes – a tell-tale symptom of impending red rings of death. Unfortunately, my Xbox exhibited all of the symptoms except an actual series of red rings: a problem that, as the Microsoft support agent informed me, meant that my device was no longer covered by the extended warranty. There goes $99. A series of problems sending me e-mails (and later the actual shipping box) have cost me at least a month of playing time ... during the busiest gaming season of the year.
The point is not to complain about my problems per se – I'm hardly the first gamer to have experienced these issues and I'm sure that I won't be the last. But since I haven't been playing, I've had a lot of time to think about the implications of these issues on hardware manufacturers, publishers, developers, and even retailers. Do my problems matter to the businesses that care about me?
By one standard, they clearly aren't as important as I'd like to believe. The 360 hasn't outsold the Wii yet, but it's standing above a respectable 20M units sold despite all of the negative publicity. I paid my $99 grudgingly, but I definitely paid it, and I plan to continue gaming uninterrupted as soon as my box gets shipped back from Redmond. As much as I might grumble, the financial and personal impact hasn't altered my day-to-day behavior significantly.
Of course, this is mainly of interest to Microsoft. The remainder of the players in the gaming industry is probably less pleased: I was planning on purchasing at least 5 games for the 360 this month, including Gears, Fallout, Sonic, Mirror's Edge, and potentially several others. That's $300 in lost revenue for a GameStop to share with the publisher and developer of each of those games, and when you consider the magnitude of the problems experienced by the 360 over the past few years, we're talking about a significant amount of money. At best, I'll get them later (probably at a reduced price); but gaming is a fast-paced industry and the hot game of today is likely to be in the bargain bin next month. I may never get around to playing some perfectly good game simply because of this.
And at the same time, my long-term behavior is likely to change. I didn't buy a 360 at launch out of a fear of this very same problem; in fact, I was reasonably certain that most of the hardware issues had been ironed out by the time I went to my local Best Buy. So when the next Xbox comes out, I'm going to think long and hard about whether or not it's going to make a good investment. And to the extent that I do decide to buy, it's going to be considerably later. This is probably going to ripple down the chain as well; consoles rise and fall based on their publisher support, and to the extent that the consoles launch more slowly than expected, there may very well be a problem.
So what's the answer? I'm not changing much in the near future. I'll still play my 360, and I'll still enjoy it. But there will definitely be an impact on my spending in the future, and I'm less inclined to trust Microsoft for charging me to repair a well-known manufacturing flaw in their already expensive product.
As it happened, I received an e-mail as I typed this, informing me that my 360 had just been received by the support center. Let's be honest here: most of us will be making a purchase decision based on the games that are set for release for a given device, not purely on their technical stability. But manufacturers would be fooling themselves to pretend that each generation represents a clean break with the previous one. Once bitten, twice shy.
As co-editors of A Link To The Future, Geoff and Jeff like to discuss, among many other topics, the business aspects of gaming. Game companies often make decisions that on their face appear baffling, or even infuriating, to many gamers. Yet when you think hard about them from the company's perspective, many other decisions are eminently sensible, or at least appeared to be so based on the conditions at the time those choices were made. Our goal with this column is to start a conversation about just those topics. While neither Geoff nor Jeff are employed in the game industry, they do have professional backgrounds that are relevant to the discussion. More to the point, they don't claim to have all the answers -- but this is a conversation worth having. You can reach them at

The point is not to complain about my problems per se – I'm hardly the first gamer to have experienced these issues and I'm sure that I won't be the last. But since I haven't been playing, I've had a lot of time to think about the implications of these issues on hardware manufacturers, publishers, developers, and even retailers. Do my problems matter to the businesses that care about me?
By one standard, they clearly aren't as important as I'd like to believe. The 360 hasn't outsold the Wii yet, but it's standing above a respectable 20M units sold despite all of the negative publicity. I paid my $99 grudgingly, but I definitely paid it, and I plan to continue gaming uninterrupted as soon as my box gets shipped back from Redmond. As much as I might grumble, the financial and personal impact hasn't altered my day-to-day behavior significantly.
"I may never get around to playing some perfectly good game simply because of this. " |
And at the same time, my long-term behavior is likely to change. I didn't buy a 360 at launch out of a fear of this very same problem; in fact, I was reasonably certain that most of the hardware issues had been ironed out by the time I went to my local Best Buy. So when the next Xbox comes out, I'm going to think long and hard about whether or not it's going to make a good investment. And to the extent that I do decide to buy, it's going to be considerably later. This is probably going to ripple down the chain as well; consoles rise and fall based on their publisher support, and to the extent that the consoles launch more slowly than expected, there may very well be a problem.
So what's the answer? I'm not changing much in the near future. I'll still play my 360, and I'll still enjoy it. But there will definitely be an impact on my spending in the future, and I'm less inclined to trust Microsoft for charging me to repair a well-known manufacturing flaw in their already expensive product.
As it happened, I received an e-mail as I typed this, informing me that my 360 had just been received by the support center. Let's be honest here: most of us will be making a purchase decision based on the games that are set for release for a given device, not purely on their technical stability. But manufacturers would be fooling themselves to pretend that each generation represents a clean break with the previous one. Once bitten, twice shy.
As co-editors of A Link To The Future, Geoff and Jeff like to discuss, among many other topics, the business aspects of gaming. Game companies often make decisions that on their face appear baffling, or even infuriating, to many gamers. Yet when you think hard about them from the company's perspective, many other decisions are eminently sensible, or at least appeared to be so based on the conditions at the time those choices were made. Our goal with this column is to start a conversation about just those topics. While neither Geoff nor Jeff are employed in the game industry, they do have professional backgrounds that are relevant to the discussion. More to the point, they don't claim to have all the answers -- but this is a conversation worth having. You can reach them at












Reader Comments (Page 1 of 4)
antsmarching @ Nov 28th 2008 5:53PM
a shiver goes down my spine every time i'm reminded of rrod. I bought my 360 at launch and it hasn't happened to me yet. I was actually hoping it would happen before the warranty expired, but no such (bad?) luck.
anonim1979 @ Nov 28th 2008 6:10PM
If X360 goes down so hard that it doesn't show 3 red rings and you STUPIDLY arent entitled to 3 years warranty...
FINISH HIM! with a towel for example - wrap around and let it steam.
When dead , no matter if red rings show or NOT - SEND AS 3 RED RINGS - do NOT tell anything else - it red ringed, doesn't want to turn anymore, not your problem that it doesn't turn anymore in repair shop - it was 3 red rings in your house ;).
Case solved. 3 years warranty should be for all fallen X360s.
anonim1979 @ Nov 28th 2008 6:19PM
PS.
I take no responsibility for using/not using that method - especially: fires / warranty problems / towel malfunctions / etc.
You are using it on your own.
:)
Markez @ Nov 28th 2008 6:24PM
Towel didn't work for me. And I'd like to say I'm a guy who really knows where their towel is.
Oh well.
antsmarching @ Nov 28th 2008 6:29PM
ha yeah i was thinking about the towel trick, but i just couldn't kill my baby.
BananaBoat @ Nov 28th 2008 6:30PM
My launch day 360 is fine as well, and it gets over one hundred degrees here. I don't believe that every console is destined to overheat and RROD. The fact of the matter is that most people haven't experienced the RROD, and they never will.
That said, a factory defect is a factory defect whether it happens ten years down the road, or 2. It sucks that Microsoft won't cover it for the life of the product, but then again, since there is an easy way to manually RROD your 360 (as described above..) I can see why they wouldn't want to ("oh crap, I chipped the paint, time to RROD this bad boy with a towel")
I think MSoft has learned from this generation. They approached the 360 with the software mindset that led them to believe that any and all problems could be fixed after the fact with iterations. Now they know differently, and considering that the large majority of 360 owners are quite content with their 360's (which you wouldn't know from the internet echo chamber) it seems as if their haste to get the 360 to market did pay off with the growth of the brand as they had hoped.
In the grand scheme of things, how long do you think people will remember the RROD? I had three different PS2's die for varying reasons (DVD drive died in a mechanical way, the laser stopped reading, and I forget the cause of the third PS death) and only the first one was covered under warranty. Even so, I don't hold a grudge against Sony for it. By the end of this generation, the Xbox brand will have grown to proportions that all naysayers said could never happen, and they'll be in a good position for the next-gen. Hopefully they will take their time with the planning of the next Xbox so that something like the RROD fiasco will never happen again.
(Oh, and I agree...wrap that bitch in a towel until you do have red rings. Also, I'm absolutely kidding, and you shouldn't do it. Absolutely don't do it. I'm telling you not to. Seriously. Absolutely not.)
Ben @ Nov 28th 2008 8:53PM
Nice H2G2 reference Markez.
Got a question though, has anyone who got a RROD ever tried Team Xecutor's RROD Fix? I've seen it advertised before and it's only $12 or so.
I just got my first 360 today (the Circuit City Arcade Bundle deal), it's not a Jasper, but I'm hoping to not get an RROD... ever.
The True Gamer @ Nov 28th 2008 10:34PM
It's plain and simple. You call and say you got 3 red lights. I don't give a fuck what is really happening, I was screwed 12 hour into launch day of the 360. I've returned at least 7 total. The fucker fucks up, you call and tell them you got the rrod.
Aaron @ Nov 28th 2008 11:06PM
anonim1979, now there's a frood who really knows where his towel is.
flanker22 @ Nov 29th 2008 4:09AM
The jasper revision just came out this should help significantly since rrod is most caused by a failure in the GPU. the jasper revision reduces the size of the gpu to 65nm. this article is troll bait its not really particularly well written or even that interesting.
http://www.guardian.co.uk/technology/blog/2008/nov/28/xbox-jasper
DigDug @ Nov 29th 2008 5:40AM
I wonder how many actual 360 owners there are, not 360 sales. Clearly many 360's have been thrown in the trash. I suspect the actual PS3 and 360 userbases are very close in reality, hence the much closer game sales between the 2 platforms.
I also wonder why brainwashed 360 owners continue to shop 360, after having to throw away systems. I mean anyone would think they enjoy rewarding Microsoft for launching early, unreliable and feature incomplete.
Bowser Rogozhin @ Nov 29th 2008 5:48AM
Bananaboat, the greatest comment whore.
Lacking any conviction in the words he speaks, this characterless man latches onto the top comment, regardless of content, to parrot his non-opinion.
Markez @ Nov 29th 2008 1:06PM
Hey DigDug, I like the 360. I like the system. I like the games. I like mine. I like the investment I already have in it. I had to ship mine in, it wasn't a big deal. The UI is better than PS3, in my opinion, and I like the exclusives better.
Shocker though, since you frame your comment to suggest the PS3 is the only sensible choice.
Brainwashed is rather strong, makes you sound like a douche.
Ahem... DOUCHE.
BananaBoat @ Nov 29th 2008 4:54PM
@bowser
I lol'd. You think it is because I am a whore, but it's really because I only read (and respond) to things on page 1, because quite frankly, I don't have the time to read page after page of comments. Sometimes I respond to the first comment, and sometimes I respond to the second, third, or fourth, but my response will always be on page 1.
Cody @ Nov 30th 2008 12:38AM
360. What a stupid investment. PS3 and Wii is all a gamer needs.
antsmarching @ Nov 30th 2008 1:43AM
You're lucky this thread is so old, Cody, otherwise you'd be voted down into oblivion within about four seconds of posting that.
Jdsnut @ Nov 28th 2008 6:52PM
Really?
I've had the same problem before and they never said anything about the three rings to me and I got a new box.
Psycho300x @ Nov 28th 2008 5:54PM
Ive always said that if mine RRoDs now Ill put the $100 toward the purchase of a new PS3, because I refuse to pay for a repair that poor design is to blame for, Microsoft should have bitten the bullet and actually designed something that wouldn't die again.
Psycho300x @ Nov 28th 2008 5:55PM
I ment to mention that my console has RRoD'd 3 times since I got it, twice this year, the second time it RRoD was 2 weeks after getting it back...
SoulBlade @ Nov 28th 2008 6:10PM
yea but if they took the time to do that, they definitely wouldn't have had the head start needed to beat the Wi.. err.. PS3.
They only cared about getting out first. It's pretty sad.
Hyams @ Nov 28th 2008 6:25PM
You say it's sad, I say it's genious.
Microsoft have increased their presence in the videogame market ten fold, and have given Sony a real beatin'. Next generation they'll be able to make back the 6 billion or so they've lost so far, and start make a decent profit, and all because they rushed the 360 out a year early.
DBoyFlex @ Nov 28th 2008 6:29PM
I would have purchased a 360 regardless of whether the ps3 came out first or not. Adding on to that, I would not have purchased a ps3 also. Why? I liked my regular xbox over the ps2 I had. MS rushing their crap out the door and having it be faulty has pissed me off to no end this generation, and when the next xbox comes out, I am going to be a ton more skeptical about it. I have had problems with disk drives breaking, HDMI not working, ethernet adapter, and of course RRoD. The entire system was created with mediocre parts at best, and still are. Sure they are cheaper than a nice PC, but consoles make up the difference in pricier games, gold subscription, paying for all the DLC, etc. Just my two cents. Basically, I totally agree with the original post.
Infidel @ Nov 28th 2008 6:46PM
@DBoyFlex
Fact is, in terms of parts, almost everything is made by the lowest bidder, and the 360 is certainly no exception.
DBoyFlex @ Nov 28th 2008 7:49PM
Yes, that is true, as is for any out of the box computer you buy. For some reason though, the 360 itself has had more problems than any other piece of computer hardware I have ever had, not just many of one problem, but of many different problems. Maybe they should have put a bit more into it, it may have saved them a ton of money in the end.
atrimus @ Nov 29th 2008 12:54AM
@Hyams
i would expect something like that from one Microsoft exec to another, but not from one gamer to another. in Microsoft's ingenious endeavor to dethrone Sony consumers have been the sole casualty; that's something i hardly think Microsoft deserves accolades for. luckily for me my 1.25 years old 360 hasn't RRoD'ed *knocks on wood* and i seriously hope it doesn't. while i think Fable 2 was a bit overrated, i've thoroughly enjoyed Mass Effect, both Gears, Lost Odyssey, and a host of other 360 exclusives and 360-superior multiplatforms. a RRoD would completely turn me away from all of them, an act which would be made much easier to live with since my PS3 has found some sturdy legs with its own excellent exclusives and its own superior multiplatforms. i refuse to support a company who would rather invest millions in exclusive dlc instead of investing in R&D for the very system they want me to play the same said dlc on.
LordChimp @ Nov 28th 2008 5:55PM
If my 360 gives me the RRoD, I am not going to cry over it. Now, my PS3 just recently stopped reading disks and I am VERY upset since I just went over my 1 year warrenty. There goes $150....
anonim1979 @ Nov 28th 2008 6:16PM
Lucky you. In one forgetable ;) Cental Europe country laser fix in official Sony center costs (after exchange) ~413$ !
http://polygamia.pl/gwarancja-sukcesu
Levi @ Nov 28th 2008 6:18PM
He mentions "there goes $99" in the article and you mention "there goes $150"... Where are you guys buying these systems so cheap?
DBoyFlex @ Nov 28th 2008 6:25PM
Above, I assume they are repair costs, or the price of a used console on ebay maybe.
LordChimp @ Nov 28th 2008 6:39PM
The $150 is the repair cost to fix my PS3. Really bummed since I have other things I need to buy still for the holidays.
Chin-Poh @ Nov 28th 2008 7:47PM
What's worse is that you shouldn't be paying $150 for it, it should be a FREE repair, the Blu-Ray drive failing is a build quality defect just like the RROD, its Sony's fucking fault and I really hope there will be a recall like MS did and repair future units for free and reimburse those that paid for it, ironic that my PS3's drive had to crap out while my 360 has been working just fine.
LordChimp @ Nov 28th 2008 8:18PM
@Chin-Poh
Same thing for me. My 360 is a launch system and is still going. Granted it sounds like it is going to fly away from the sound of the fan. Just bummed that the PS3 failed. It never even gave me a freeze warning. Just one day put in my disk and just stopped reading them.
el serpiente @ Nov 28th 2008 9:03PM
Check ebay for a replacement drive beofre you send it to sony. It is very easy to pop it open and swap out parts. All you need is a tors screw for the case and a small philips head screwdriver. If you are out of warranty, definitely worth it.
el serpiente @ Nov 28th 2008 9:06PM
oops, 'torx'
Dartmerc @ Nov 30th 2008 5:52PM
I thought it was a free repair - My BD drive died while I was out of warranty, called Sony and they took care of it. Had the system repaired, not replaced, and back within 3 weeks.
Guess I was just lucky, or maybe it's one of those we'll charge you unless you question it kind of things.
SoulBlade @ Nov 28th 2008 5:56PM
"Do my problems matter to the businesses that care about me?"
They don't care about you, just your cash. Once you've paid, they'll do whatever they can to forget about you. MS had to address the RRoD since the rate of failure is worse than even the shittiest of manufacturers products.
Ignatius @ Nov 29th 2008 1:17AM
I dunno, Phillips could give them a run for their money.
Markez @ Nov 28th 2008 5:56PM
Two things this made me think about; For one, how on earth would you go about quantifying lost revenue to either game companies or retailers? Seems like it'd be quite a task, and I don't know how reliable those figures would be. Two, it reminded me of how jealous I was when mine got the RROD at the same time as a friend, but since he had the replacement plan from Best Buy he just went and swapped it for a new one.
That bum...
Roto13 @ Nov 28th 2008 5:58PM
"Let's be honest here: most of us will be making a purchase decision based on the games that are set for release for a given device, not purely on their technical stability."
It was the deciding factor between me buying a PS3 or a 360. I'm not buying inferior quality hardware. It's not happening. I don't care if it's cheaper. I have standards and the Xbox 360 doesn't meet them.
Maybe if more people valued their money like I do, Microsoft would finally fix this crap once and for all.
Ayrkain @ Nov 28th 2008 7:19PM
I did buy one in March of '06 because of the PS3's delayed launch. When it started freezing up once an hour, I went ahead and sold it. If they improve the hardware I'll gladly buy another one, but until then the PS3 and the Wii (not to mention the PC) have plenty of good games.
Haggard @ Nov 29th 2008 6:15AM
Neither console was really built with stability and performance in mind. PS3 was forced to use shitty hardware because they spent all their budget on a Blu-Ray drive, and 360 was forced to use shitty hardware to be the first one to come out.
ill trooper @ Nov 29th 2008 8:44AM
I have to agree with the original statement, I know it's dumb but the 360 is just too good a party to miss, despite being total undependable junk.
Roto13 @ Nov 29th 2008 8:58AM
Haggard: Apparently you live in a bizarre alternate dimension where the PS3 uses shitty hardware. Tell me, what's Amy Winehouse like when she's not on every drug in the world? And how's Shenmue 3?
Haggard @ Nov 29th 2008 11:58AM
How about the fact that the Cell was chosen as a CPU because it's a fairly cheap way of getting a lot of theoretical power - with little regards to devs who would have to relearn their profession in order to use the thing.
And the RSX? Gimme a break, that GPU wouldn't have been out of place in a budget gaming rig 3 years ago.
Xmar @ Nov 28th 2008 5:58PM
I would have bought an xbox 360 a long time ago if it wasn't for the hardware related problems that plague them. The extended warranty that microsoft offers isn't enough to get me to buy a product that will probably fail due to normal use in an unacceptably short time frame.
DrunkRaba @ Nov 28th 2008 5:59PM
Obviously this stuff doesn't really matter to sales, much. If so, the 360 would be sitting at somewhere near half of what the PS3 has sold to date. I was once bitten by the 360 in this same manner, after it had taken two games down with scratches with it, and I was out of warranty as well. That was a few months before the 3 tear thing came to be and mine was in some landfill by then.
Price and games, that is what sells. Nintendo was the cheapest out there and most of its games are cheaper than almost all of them on the 360 or PS3. Parents and "casuals" don't mind spending $30, maybe $40 on a random game or two, but $60? I don't think so!
I never have bought the Wii as it didn't have a game that has interested me, and my launch PS3 has had almost zero issues, other than its former lack of games. SO I can't complain much, I had a good time with the 360 the year and week it lasted me. But it burned me good. Sales keep rolling for them though because its cheap now. They could not fix anything and that would continue.
jidaisuke @ Nov 28th 2008 6:11PM
If you were smart you would have bought an extended warranty from MS a while ago. AT LEAST after you heard about 360s dying. Why wouldn't you do this? It seems extremely dumb not to, and now you're paying for it.
Anyways, when my PS3 died I had to pay Sony $150 to fix it, and they don't even offer extended warranties, AND I lost my progress in a lot of games.
No company cares about you, no company anywhere. I don't know why people think companies should care. I guess these are the same people who thought Reagan to Bush's trickle down economics would work too. At least gov't is SUPPOSED to care about its citizens, companies are NOT supposed to care about people, by definition.
Levi @ Nov 28th 2008 6:25PM
For under ten bucks, you can buy an adapter to hook up a laptop hard drive (which is where your PS3 save games are) to your desktop and dump all of your data onto your PC. When you get your newly refurb'd system back, do the opposite to dump the saves and what not onto your new HDD. Or actually, at that point you could probably copy the saves from your PC to a USB and back to the PS3. Dunno. There's always options!
lorddshadow2 @ Nov 28th 2008 6:25PM
but at least sony cares MORE hardwarewise.
MBC @ Nov 28th 2008 6:41PM
If you live in canada you can buy a 1-4 year extension from Sony
http://www.tawkn.com/?page=site-feature&feature_id=11
halfway down the page goes over price
http://www.sonystyle.ca/commerce/servlet/SonyCareSearchView?storeId=10001&langId=-1&catalogId=10001
And this is the link through Sony.
I called my local store and they confirmed the 100 for 4 years and that it can be bought as long as its still in the first year