Rings of Ire

Can you say whether it was a flaw in the design or the manufacturing?
No. I can't say that, no.

In terms of reimbursing people, is that going to be a check, is that going to be Microsoft Points—how are you handling that?
[Laughs.] Not Microsoft Points. Real U.S. dollars, British pounds, European euros. Whatever it is that we charged you, you'll be reimbursed back in real currency. Not that Microsoft Points aren't real currency, N'Gai, but no, we're not going to credit your Xbox Live account with Microsoft Points.

And just to be clear, this refund program dates back to the very first Xbox sold?
If you had three red lights, and you paid to fix it out of warranty—because we would have taken care of you in-warranty, obviously—then we're going to pay you back. Now that's going to take us a little while, because we've got to go through and cut checks and what have you, and it's global. But we're going to pay you back.

Did you consider a recall?
No. This is not a recall issue. This is not a systemic problem, this is not a safety issue, this is a completely voluntary action on our part. Nobody's forcing us to do anything here. We're just trying to do the right thing.

Lastly, when you realized, "This is what we're going to have to do," how did you feel?
I feel bad. I feel bad for the consumers that we haven't taken care of, because they're a really loyal and passionate bunch. You know Xbox Nation. I feel bad—more importantly, perhaps today—I feel bad for the people here in Redmond, because you don't like to do this stuff. I don't like to cause the corporation this kind of a financial hit. But it's the right thing to do. I can tell you that everybody here is very supportive of doing the right thing here, regardless of the cost. Today, I feel bad for the people who work at Xbox, because I'm sure that people are going to look at this and feel real bad about what's going on today. I'd like to think that by the time we get to E3 and we show that the business fundamentals are incredibly strong and the business is strong going forward, that people are going to feel a little better. But it's kind of a sad day here today.

Real quick: are you still going to be profitable for the next fiscal year?
Yes. sir. Yes indeed. Absolutely.

© 2007