Did Microsoft know about Xbox failures?

Has your Xbox 360 ever failed unexpectedly? If it has, you're in good company -- in February, warranty company SquareTrade pegged the console's failure rate at a shocking 16%. But a stunning new expose claims that Microsoft knew over two-thirds of the consoles produced by its contracted factories in the run-up to the Xbox 360's November 2005 launch date were faulty, and opted to push the machine out to consumers in spite of its problems.

The report, published this week in VentureBeat and written by technology journalist Dean Takahashi -- author of the critically acclaimed The Xbox 360 Uncloaked -- blames numerous factors for the now-infamous "Red Ring of Death" failures, including a rushed design process, the machine's groundbreaking complexity, and cost-cutting initiatives that hamstrung quality assurance tests.

As one anonymous source told Takahashi, "There were so many problems, you didn't know what was wrong. The [test engineers] didn't have enough time to get up and running."

Even though Microsoft eventually extended the Xbox 360's warranty program in an effort to reassure consumers, incurring an estimated $1 billion bill in the process, public confidence in the Xbox 360 was harmed immeasurably. Many online reports indicated purchasers had to go through four or more replacement machines before receiving one that worked, and Microsoft amassed a "bone yard" of 500,000 broken consoles in the process, Takahashi claims.

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