Microsoft Watch has an article that explains “doing the right thing” is hard, and costly, but gives Microsoft credit for doing so in reference to their action on faulty Xbox 360 units (a.k.a. “the Red Lights of Death”).
From the Microsoft Watch article:
“”The fact that Microsoft is taking action and not hiding its head in the sand is encouraging,” said David Riley, an NPD senior manager.”
I say nonsense. Microsoft has “done the right thing” before, but in my opinion characterizing this as one of those times is just wrong. Hiding its head in the sand on this issue would cost them their Xbox business; it’s getting out of hand. This isn’t some small glitch affecting a few units, it’s a big glitch affecting a large number of units.
There’s a difference between doing the right thing and fixing a major hardware glitch for an entire product line. At $1.15B, this is a huge outlay of cash, dwarfing anything before it in the tech industry that I’m aware of.
In my opinion, you can consider an action doing the right thing only when doing nothing would likely result in little more than some bad PR and a class-action suit whose settlement would probably be less expensive than doing what’s right. It’s good that some companies pony up the extra cash to avoid the hassle for their customers, and figure the good PR (or at least lack of bad PR) is better than the money they could save by inaction. (There’s obviously a fine line here, but that’s a debate for another time.)
However, what Microsoft is doing for the 360 is nothing less than a full-scale attempt to avoid losing the Xbox business altogether, and doing so while Sony still has it’s cranium up its rectum. The amount of money makes it clear Microsoft believes the issue is widespread.
Further, the action they’re taking is major because they must do something drastic to satisfy the customer base (or at least give them a warm and fuzzy feeling). Simply fixing or replacing defective units wouldn’t be enough, they have to go above and beyond or bad word of mouth will kill it. A product can survive a few bugs and component defects here and there, but it cannot get over a reputation that there’s a very high chance it’ll just die on you.
I could actually argue that Microsoft isn’t doing enough. There are a lot of 360s in the channel, and I’ve seen no call to bring them back. Microsoft knows a lot are defective, but is betting that acknowledging the problem and a 3-year warranty is enough. It wouldn’t be for me. Personally, I wouldn’t even consider a 360 now, and would wait only until I think the channel’s clear (six months or more).
Microsoft’s actions have nothing to do with doing what’s right, and everything to do with saving a business they hope will turn a profit some day. After you’ve already lost six billion dollars on it, what’s another 1.15?