Report: Xbox 360 Warranty Extension, Red Rings of Death Caused by Cost-cutting MS Design

Microsoft's $1 billion Xbox 360 warranty extension stemmed from internal modifications to produce a cheaper graphics chip, according to an analyst from tech consulting business Gartner.

Since announcing the extension, Microsoft has remained rather quiet as to what exactly caused the "unacceptable" number of Xbox 360 breakdowns. It was an issue with a "Microsoft-initiated design," Entertainment Division president Robbie Bach noted.

"Microsoft wanted to avoid an [Application-Specific Integrated Circuit] vendor," chief Gartner analyst and research VP Bryan Lewis claimed during the Design Automation Conference, which was covered by EETimes.

He proposed that Microsoft took its take on the ATI-designed graphics chip directly to Taiwan Semiconductor Manufacturing Co., resulting in a cheaper chip that reportedly produced too much heat and caused the fabled "Red Ring of Death."

After realizing the mistake, Lewis says Microsoft called in an unnamed vendor to help resolve the issue, which the outlet strongly believes to be ATI Technologies.

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  • reply
    June 11, 2008 2:25 PM

    That article has quite a few errors. Sure, Microsoft was part of the design of the GPU, but it's still an ATI GPU and it was even promoted that way.

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      June 11, 2008 2:29 PM

      MS owns design for the GPU, not ATI they just handed MS the plans for it who then screwed up the manufacture and had to go back to ATI for help. Because MS were keen to avoid the trouble of the first Xbox with Nvidia having too much leverage over the GPU they went down this path and though they could save a few bucks as well in the long run.

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        June 11, 2008 2:40 PM

        I realize that, but the article kind of makes it sound like MS made the design and fucked it up. From what I gather the design was fine, but the cooling wasn't and that was MS's fault.

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          June 11, 2008 4:16 PM

          ATI designed it, MS took design to a cowboy firm to try and cut corners in manafacturing it resulting in higher levels of heat....that's how I read it..

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            June 11, 2008 4:20 PM

            what i got out of it too

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            June 11, 2008 4:23 PM

            Well, ATI is fabless so it's not like they would have made the chip themselves anyway.

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              June 12, 2008 1:07 AM

              So is nVidia, having fabs or not having isn't the issue here. It's how it's made. Obviously when you put an outsider to fiddle with the design it will backfire, so I can see why the rumours speak of ATI now being in charge again.

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        June 11, 2008 2:49 PM

        MS basically paid ATi to design the GPU which ATi would in turn get to use the R&D in their next chips but MS owns the design on the GPU (Xenos) so that they can then license the chip to the lowest bidder manufacturer. That way they wouldn't be stuck with a single supplier and no room to lower prices which is why Xbox cost them so much and they had to cut it's life short.

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      June 11, 2008 2:29 PM


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      June 11, 2008 2:50 PM

      stemmed from an attempt to internally design the licensed graphics chip instead of outsourcing development to a more experienced firm, according to an analyst from tech consulting business Gartner

      My thoughts as well, I am pretty certain the GPU in the 360 is entirely a ATi design. MS just owns it and set the parameters for it. I'm sure ATi had some input as well which MS took up.

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        June 11, 2008 2:59 PM

        Yeah Dean Takahashi's Xbox 360 Unleashed book lays out the whole thing.

        What Microsoft did internally (from guys from the old UltimateTV team) was design the scaler and output hardware. The main graphics processor design was contracted out to ATI after bids.

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      June 11, 2008 3:00 PM

      When designing ASICs, there's a small number of "portal" ASIC houses that perform all of the backend activities required in creating the physical structure of the chip-in-a-metal-package (decap, package design, etc etc). Microsoft did that work *themselves* rather than pay someone like Open Silicon or Avago several million dollars (you go from 0 chips to making a *huge* one? dumb)

      Microsoft fucked up, paid $1B to fix it.

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        June 11, 2008 3:47 PM

        This comment makes a ton more sense than the article. I work on ASICS, and we spend time worrying about how hot the chip will be and we have cut features in the past to meet our goal. I'm pretty sure MS hired a huge team of HW guys to work on this because chip design isn't something you can pick up over a week or year. Oh well, lets hope the xbox3 comes out solid b/c of it.

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