Rumor: insider reveals truth behind 360 failures, says new SKUs will come

The person who first spread the rumor of Bungie leaving Microsoft which eventually came true, Jake Metcalf from 8BitJoystick, claims he had a chat with someone who worked with Microsoft on the Xbox 360 project for years and knows why the 360 is suffering from hardware failures. If this “insider” is to be believed, Microsoft intends to release a new 360 SKU every year and consoles for the next-generation are already being developed by the platform holders. Head over to the full article for more details.

In a rather lengthy interview, someone who supposedly worked with Microsoft for years to develop the Xbox 360 shared a few things about the console known for hardware failures. Specifically, the man went into detail regarding Microsoft’s ill-advised decisions that led to a faulty gaming machine and what the world’s biggest software company intends to achieve using its multimedia platform.

According to this insider, the red ring of death which plagues Xbox 360 units is “caused by anything that fails in the ‘digital backbone’ on the mother board.” However, this does not exactly mean changing boards (from Xenon to Zephyr to Falcon) will eliminate the RROD threat entirely.

The insider cited other causes of the dreaded red ring, including bad parts, incompatible parts that lead to timing problems, bad manufacturing process resulting in flawed solder joints, misapplied heat sinks or thermal interface material, missing parts, broken parts, parts of the wrong value, and missed test coverage.

Even units that are in good condition when they leave the factory are subject to fail early, he said. “The main design flaw was the excessive heat on the GPU warping the mother board around it,” explained the insider. He continued, “This would stress the solder joints on the GPU and any bad joints would then fail in early life.”

Most people believe the Xbox 360’s failure rate is around 30%, and if this person who claims he’s an insider is to be believed, the number hit the spot. “This quarter [Microsoft is] expecting 1 M failures, most of those Xenons. Some of those are repeat failures,” he cautioned.

Unfortunately, there seems to be no way to tell if your 360 is near death. “There’s no way to tell when yours might die. But the cooler you can keep it, the longer it will probably last. So stand it up, keep it in free air, etc,” the insider advised. He also mentioned that dashboard updates periodically brick boxes.

Owners of Xbox 360 units with Falcon motherboards need be warned as well. Quoting the insider, “I’ve heard that the failure rates for the current design is sub 10%. Much much better, but still too high imoh.” He added, “…those designs haven’t seen much life yet, so no one knows if that failure rate will hold.”

Rumors of the Xbox 360 Ultimate’s existence are rampant, and they may not be without merit. “[Microsoft] will come out with new hardware at least once a year until they retire this design. That’s the console financial model,” he stated. The insider believes Microsoft will keep on churning out new models of the Xbox 360 with key features intact, but with reduced cost and price; and perhaps improved quality if needed.

Gamers will not be happy with new SKUs every year, you say? Microsoft may very well be willing to risk that. Here’s what this insider said:

Xbox’s mission statement is to preserve the Windows monopoly and extend it into the living room, as a media extender for a Media Center PC, along with a host of other MS and other company’s hardware devices that fit into a digital entertainment lifestyle. MS has the bucks to keep losing money on Xbox for a long time, maybe forever. They’ve already lost around 6 billion dollars.

It’s interesting to note that this statement adds up when you consider Bill Gates’ keynote speech at CES 2008 about taking high-definition entertainment everywhere. The Xbox 360 is said to be at the roots of home entertainment.

The insider doesn’t think Microsoft expects profit from the Xbox, and believes it’s all about integration. Citing Microsoft’s decision to offer Ford vehicles voice recognition as example, he predicts the giant company will come up with a strategy that involves “integrating their offerings into a digital lifestyle universe” which will be implemented for years to come.

When asked about the possibility of a successor to the Xbox 360, he had an interesting answer: “I understand they are working on it right now. But don’t look for it any time soon. It’s years away. News flash: Sony and Nintendo are working on their next boxes in some way too.”

It’s also worth noting that Microsoft could’ve created the Wii if this insider is for real. His final remark was:

In the middle of ’03 I tried to convince our director of “innovation” that we needed to do motion control, simple and intuitive controllers, and focus on family oriented and just plain fun content. Well before the Wii came out. He completely disregarded it.