A Q&A with Todd Holmdahl, the hardware guy at Microsoft, about Xbox 360 failures
I can’t imagine that gamers who have defective Xbox 360s would have a great time talking with Todd Holmdahl, Microsoft’s corporate vice president of Gaming and Xbox Products Group. He’s ultimately responsible for the quality of the game console, having spearheaded the hardware side of both the original Xbox and the Xbox 360. Holmdahl has appeared in both my books as a critical figure involved in getting the consoles off the ground. He came from the Microsoft Hardware division that makes mice and keyboards. Holmdahl doesn’t really acknowledge many mistakes in the Xbox 360 launch, as you’ll see in the interview that follows. He ran the teams that are responsible for designing and manufacturing the console. I think there are a lot more answers to discover to the questions that I posed to Holmdahl. We’ll see if the real answers shake loose from other sources.
Q: What is the post-mortem on Xbox 360 manufacturing? How has it turned out for you?
A: Like any other post mortem, there are some things you would have done differently that you learned and that you incorporate back into your processes. Overall, it was really smoothe compared to the complexity of the product we were building.
Q: The ramp of the Xbox 360 compared to the original Xbox. Was it similar or different?
A: Having lived through both of those, I remember both very well. Both were very complex products. State of the art technology. They were relatively similar in the ramp complexity and ramp speed. Exciting stuff. You and I had a conversation about this around November, 2005.
Q: I’m sure you’ve seen some of these complaints that we’ve written about from the guy who went through seven machines. There are a lot of people posting on the blog saying they still have problems. There is a lot of anecdotal evidence that the quality of the Xbox 360 isn’t there. How can you paint the bigger picture for me there?
A: We’re very proud of the box. We think the vast majority of people are having just a great experience. You look at the number of games they are buying, the number of accessories they are buying, the Live attach. They love the box. They continue to buy the box. That said, we take any customer issue very seriously. We continue to look into these things very deeply. You have seen we have made some changes to our customer service policy.
Q: Do you still say that is a normal return rate for the console?
A: We continue to say the vast majority of the people are really happy with it.
Q: I’ve heard varying accounts of what is considered a normal return rate. Some people say that 2 percent is normal. Sometimes 3 percent to 5 percent is considered normal. Back to that question, can you address whether you are within those rates or within a normal rate.
A: We don’t disclose the actual number.
Q: Normal compared to the Xbox?
A: We don’t comment on that.
Q: What explains this anecodotal evidence that it’s out of whack, compared to the Wii or the PlayStation 3 or other consoles.
A: I would go back and say the vast majority of people love their experience. We continue to go back and address all of these issues on a case by case basis. There is a vocal minority out there. We go off and try to address their issues as quickly and as pain free as possible.
Q: There were some folks, who are not totally guessing, who said that when you had three million consoles in the market, you have a bone pile of bad ones. That seems to suggest a pretty high defect rate as far as the yield goes. Can you address that?
A: We don’t talk about our production.
Q: Can you say anything about the yield? Do you have a good yield? Can you say anything about the yield?
A: The important thing here is that each product that comes out of the factory is rigorously tested. To ensure highest quality for our customer.
Q: The one thing I notice is that if you don’t have a good yield, it come back and totally mess up the business model. If you are counting on a billion dollars in profits and you don’t have a good yield, where it’s like 80 percent, there goes that extra billion dollars in profit. I take it that yield is very key. It’s really important.
A: You focus on a whole bunch of different metrics. Yield is one we focus on very closely. I think if you take at what Robbie Bach has been saying for his business, it’s that the Entertainment & Devices Group will be profitable in fiscal year 2008. That is what we are targeting right now.
Q: If you have a high defect rate, won’t that ruin the business model? Won’t that ruin the profit?
A: I would say we don’t have a high defect rate. The vast majority of people are really excited about their product, and that we are targeting profitability for next year.
Q: Can you say whether the yield ramp was any better this time around?
A: We don’t comment on that.
Q: You guys did get rid of Wistron. Was that related to product quality?
A: We didn’t get rid of Wistron. It was a voluntary decision between the two of us. We try to run as efficient as possible. With our supply base the way it is now, two high quality contract manufacturers satisfy our needs.
Q: There is talk you are going to 65 nanometer chips. Can you talk about the significance of that?
A: We continue to redesign the box, continue to drive costs out. We don’t talk about the specifics of it.
Q: If you make a jump in a chip generation like that, from 90nm to 65nm, does that give you the opportunity to do a lot of things like totally resetting the quality level, totally resetting the costs?
A: Whether it is 90nm or 65nm, we have a high quality bar we target.
Q: Does the quality automatically get better if you go from 90nm to 65nm?
A: The quality is good at both of those.
Q: If it’s early or late, what’s the significance of having 65nm six months early or six months late?
A: We don’t comment on what we’re doing internally.
Q: It seems like the obvious chance to do something new. For example, does it give you a chance to do the Xbox 360 Elite?
A: You know the business as well as I do. The design is essentially the same clock for clock as the previous version. It has to perform similarly to what was done in the past, as we go through this thing. We continue to drive the same levels of quality, to increase the quality if possible, and to ensure the customer has the best experience possible.
Q: If you take the main chips from 90nm to 65nm, do you get accompanying benefits in the rest of the system? Does the board itself get smaller?
A: That’s a really good point, Dean. When you do these designs, you’re looking at the CPU or the GPU, or just one specific internal component, as we continue to look through it, we look at it as a complete system. We make sure the components work with the system, delivers the right levels of performance, and operates at the right voltage to perform at the levels we want it to perform at.
Q: There was a surge of supplies in the spring of 2006. Did that mark any particular advance in manufacturing? Was that Celestica coming online?
A: We hold as confidential our production ramp. It’s not something we talk about.
Q: I remember one of the warranty coverage changes was to offer a different kind of warranty for any of the machines made in 2005. Or any of the machines bought in 2005. It sounds like you learned something between 2005 and 2006.
A: Out of warranty repairs were for early production batches coming out of the lots in 2005. We addressed that as part of that policy or that issue.
Q: That wasn’t due to a specific thing. Was it due to the graphics memory?
A: There were no systematic issues that we responded to when we first offered that warranty.
Q: Your returns as a category. Is there any No. 1 reason for a return?
A: There are no systematic issues. The vast majority of the people just love the product, have a great experience with it. When there is an issue, we get on it and address it as quickly as possible.
Q: Was there any issue here where I didn’t ask it the right way but you could say something.
A: The overriding thing, Dean, is that people have the product, they love the product, it continues to sell well. The stuff we talked about with Live has been very successful. The game attach has been very successful. The accessory attach. We are absolutely committed to delivering a high quality experience. When people do have issues, the leadership team works to make sure that those issues are dealt with as pain free as possible. We go out of our way to try to ensure that happens.
Q: At this moment, I consider this to be your critical issue for this whole generation. What can you say about that.
A: My job is to make sure the customer is happy. This is certainly part of making sure the customer is happy. We have other things. You saw the release of the spring update. I certainly view customer happiness as one of my No. 1 responsibilities.
Source
I can’t imagine that gamers who have defective Xbox 360s would have a great time talking with Todd Holmdahl, Microsoft’s corporate vice president of Gaming and Xbox Products Group. He’s ultimately responsible for the quality of the game console, having spearheaded the hardware side of both the original Xbox and the Xbox 360. Holmdahl has appeared in both my books as a critical figure involved in getting the consoles off the ground. He came from the Microsoft Hardware division that makes mice and keyboards. Holmdahl doesn’t really acknowledge many mistakes in the Xbox 360 launch, as you’ll see in the interview that follows. He ran the teams that are responsible for designing and manufacturing the console. I think there are a lot more answers to discover to the questions that I posed to Holmdahl. We’ll see if the real answers shake loose from other sources.Q: What is the post-mortem on Xbox 360 manufacturing? How has it turned out for you?
A: Like any other post mortem, there are some things you would have done differently that you learned and that you incorporate back into your processes. Overall, it was really smoothe compared to the complexity of the product we were building.
Q: The ramp of the Xbox 360 compared to the original Xbox. Was it similar or different?
A: Having lived through both of those, I remember both very well. Both were very complex products. State of the art technology. They were relatively similar in the ramp complexity and ramp speed. Exciting stuff. You and I had a conversation about this around November, 2005.
Q: I’m sure you’ve seen some of these complaints that we’ve written about from the guy who went through seven machines. There are a lot of people posting on the blog saying they still have problems. There is a lot of anecdotal evidence that the quality of the Xbox 360 isn’t there. How can you paint the bigger picture for me there?
A: We’re very proud of the box. We think the vast majority of people are having just a great experience. You look at the number of games they are buying, the number of accessories they are buying, the Live attach. They love the box. They continue to buy the box. That said, we take any customer issue very seriously. We continue to look into these things very deeply. You have seen we have made some changes to our customer service policy.
Q: Do you still say that is a normal return rate for the console?
A: We continue to say the vast majority of the people are really happy with it.
Q: I’ve heard varying accounts of what is considered a normal return rate. Some people say that 2 percent is normal. Sometimes 3 percent to 5 percent is considered normal. Back to that question, can you address whether you are within those rates or within a normal rate.
A: We don’t disclose the actual number.
Q: Normal compared to the Xbox?
A: We don’t comment on that.
Q: What explains this anecodotal evidence that it’s out of whack, compared to the Wii or the PlayStation 3 or other consoles.
A: I would go back and say the vast majority of people love their experience. We continue to go back and address all of these issues on a case by case basis. There is a vocal minority out there. We go off and try to address their issues as quickly and as pain free as possible.
Q: There were some folks, who are not totally guessing, who said that when you had three million consoles in the market, you have a bone pile of bad ones. That seems to suggest a pretty high defect rate as far as the yield goes. Can you address that?
A: We don’t talk about our production.
Q: Can you say anything about the yield? Do you have a good yield? Can you say anything about the yield?
A: The important thing here is that each product that comes out of the factory is rigorously tested. To ensure highest quality for our customer.
Q: The one thing I notice is that if you don’t have a good yield, it come back and totally mess up the business model. If you are counting on a billion dollars in profits and you don’t have a good yield, where it’s like 80 percent, there goes that extra billion dollars in profit. I take it that yield is very key. It’s really important.
A: You focus on a whole bunch of different metrics. Yield is one we focus on very closely. I think if you take at what Robbie Bach has been saying for his business, it’s that the Entertainment & Devices Group will be profitable in fiscal year 2008. That is what we are targeting right now.
Q: If you have a high defect rate, won’t that ruin the business model? Won’t that ruin the profit?
A: I would say we don’t have a high defect rate. The vast majority of people are really excited about their product, and that we are targeting profitability for next year.
Q: Can you say whether the yield ramp was any better this time around?
A: We don’t comment on that.
Q: You guys did get rid of Wistron. Was that related to product quality?
A: We didn’t get rid of Wistron. It was a voluntary decision between the two of us. We try to run as efficient as possible. With our supply base the way it is now, two high quality contract manufacturers satisfy our needs.
Q: There is talk you are going to 65 nanometer chips. Can you talk about the significance of that?
A: We continue to redesign the box, continue to drive costs out. We don’t talk about the specifics of it.
Q: If you make a jump in a chip generation like that, from 90nm to 65nm, does that give you the opportunity to do a lot of things like totally resetting the quality level, totally resetting the costs?
A: Whether it is 90nm or 65nm, we have a high quality bar we target.
Q: Does the quality automatically get better if you go from 90nm to 65nm?
A: The quality is good at both of those.
Q: If it’s early or late, what’s the significance of having 65nm six months early or six months late?
A: We don’t comment on what we’re doing internally.
Q: It seems like the obvious chance to do something new. For example, does it give you a chance to do the Xbox 360 Elite?
A: You know the business as well as I do. The design is essentially the same clock for clock as the previous version. It has to perform similarly to what was done in the past, as we go through this thing. We continue to drive the same levels of quality, to increase the quality if possible, and to ensure the customer has the best experience possible.
Q: If you take the main chips from 90nm to 65nm, do you get accompanying benefits in the rest of the system? Does the board itself get smaller?
A: That’s a really good point, Dean. When you do these designs, you’re looking at the CPU or the GPU, or just one specific internal component, as we continue to look through it, we look at it as a complete system. We make sure the components work with the system, delivers the right levels of performance, and operates at the right voltage to perform at the levels we want it to perform at.
Q: There was a surge of supplies in the spring of 2006. Did that mark any particular advance in manufacturing? Was that Celestica coming online?
A: We hold as confidential our production ramp. It’s not something we talk about.
Q: I remember one of the warranty coverage changes was to offer a different kind of warranty for any of the machines made in 2005. Or any of the machines bought in 2005. It sounds like you learned something between 2005 and 2006.
A: Out of warranty repairs were for early production batches coming out of the lots in 2005. We addressed that as part of that policy or that issue.
Q: That wasn’t due to a specific thing. Was it due to the graphics memory?
A: There were no systematic issues that we responded to when we first offered that warranty.
Q: Your returns as a category. Is there any No. 1 reason for a return?
A: There are no systematic issues. The vast majority of the people just love the product, have a great experience with it. When there is an issue, we get on it and address it as quickly as possible.
Q: Was there any issue here where I didn’t ask it the right way but you could say something.
A: The overriding thing, Dean, is that people have the product, they love the product, it continues to sell well. The stuff we talked about with Live has been very successful. The game attach has been very successful. The accessory attach. We are absolutely committed to delivering a high quality experience. When people do have issues, the leadership team works to make sure that those issues are dealt with as pain free as possible. We go out of our way to try to ensure that happens.
Q: At this moment, I consider this to be your critical issue for this whole generation. What can you say about that.
A: My job is to make sure the customer is happy. This is certainly part of making sure the customer is happy. We have other things. You saw the release of the spring update. I certainly view customer happiness as one of my No. 1 responsibilities.
Source
ed up big time, defects rate are pretty high, but we're going to fix that with the 65nm chip".
