When his fourth Xbox 360 video game console died in April, Chris
Szarek wasn’t surprised.

The Chicopee, Mass. gamer was accustomed to the hardware failures that
became known throughout the Internet as RROD, or the “red rings of
death” which flash when the console becomes inoperable....

This is the unauthorized tale of how Microsoft lost its chance to
become the leader in the biggest market it has attacked beyond its
twin monopolies in Office and Windows software.... The Xbox 360’s
defect problem will go down as one of the worst snafus in consumer
electronics history....

Microsoft knew it had flawed machines, but it did not delay its launch
because it believed the quality problems would subside over time....

Likewise, Microsoft’s strategy depended on beating its rivals to
market.... The future profits that the company once hoped for are now
likely to wind up in Nintendo’s pockets....And for a couple of months
now, Sony’s PlayStation 3 has been outselling the Xbox 360 in the U.S.
for the first time.
[Software mentality...] “They put something out and figure they can
fix it with the next patch or come up with a bug fix.”