Peter Moore Discusses the RRoD
“I calculated with my finance team [a cost of] $1.15 billion,” Moore said. “I always remember $240 million of that was [for] FedEx. Their stock must have gone through the roof.”
“I am trembling, sat in front of Steve, who I love to death, but he can be an intimidating human being. And Steve said, ‘OK, talk me through this,'” Moore added. “I said, ‘If we don’t do this, this brand is dead.'”
Moore referred to this as a “Tylenol moment.” This is in reference to a series of deaths in the 1980s that were the result of tainted pills. Tylenol owner Johnson & Johnson removed all capsules from sale and took a brief hit. Something somewhat similar was happening with Microsoft and the Xbox 360.
Ballmer agreed to Moore’s proposal, even though it meant a billion-dollar loss.
“He said, ‘Do it,'” Moore remembers. “There was no hesitation. And I’m thinking, ‘I’m about to crater Microsoft’s stock’. But actually, nothing moved.”
“If you’re an Xbox gamer, you can thank Steve Ballmer for not even hesitating,” he added. “Now, we were a wealthy company that could afford to do that. But not even hesitating because the brand was more important. If we hadn’t made that decision there and then, and instead tried to fudge over this problem, then the Xbox brand and Xbox One wouldn’t exist today.” The story here, but the original IGN Podcast/Video with Phil Spencer et al is here!