The Xbox 360's infamous Red Ring of Death problem, which forced Microsoft to spend $1 billion on a recall last year, was due to the company initially wanting to avoid paying a third party to help make the Xbox 360's graphics processing unit (GPU).
Bryan Lewis, research vice president and chief analyst at Gartner, told attendees at the Design Automation Conference in California this week that Microsoft wanted to "avoid an ASIC [application-specific integrated circuit] vendor," such as AMD or Nvidia and instead created the 360’s graphics engine itself to cut costs.
Lewis suggests that, had Microsoft gone to a graphics specialist originally, they would have delivered a GPU that emitted a lot less heat – thus avoiding the costly recall, telling the conference:
“Had Microsoft left the graphics processor design to an ASIC vendor in the first place, would they have been able to avoid this problem? Probably. The ASIC vendor could have been able to design a graphics processor that dissipates much less power.”