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Coca-Cola said:

I would say the X clamp design resulting in RROD.  That's obvious.  Besides that, what is the stupidest?

http://gameplaytoday.com/features/general-features/4889-the-stupidest-mistakes-microsoft-made-with-the-xbox-360

Launching without the hard drive:  Allowed customers who only played offline to be able to afford the console and allowed them to make money off of users that upgrade.

Mismanagement of first-party developers:  I don't know about that.  Maybe they did.  Maybe there was just more lucrative opportunity elsewhere.  I think courting third parties was more important this time, though.

Lack of policying on Xbox Live:  Do you mean policing Xbox Live?  If so, the police it about as good as can be expected and they do follow up on reported users.  It just takes more than one complaint.

No controller option for Kinect:  You can use a controller with Kinect (for menus and such) but then that defeats the purpose of Kinect, right?  It works well without the controller, anyway.

Choosing DVD-9:  It worked in 2005, right?  Hell, it still works in 2011.

No Killer Instinct relaese from Rare:. As a Killer Instinct fan, I admit that the franchise is a little outdated in this day and age.  It was a beautiful franchise but it was never as big as the big guns (Tekken, Street Fighter, Mortal Kombat).

No Web browser:  Why?  Is it a mistake?  Their plan was to get us to spend money on games, movies, themes, etc.  A web browser doesn't make Microsoft money.  In fact, it competes with the other things that do make them money....and they get outdated so quickly!

No wi-fi built in till 2010:  Wasn't a big deal until the competition arrived a year later with built in WiFi (at a cost).  Why charge every customer for something that only some of them will use?


I'm just playing devil's advocate but design choices can't be considered mistakes.  The RROD was a BIG mistake.  Denying the existence of it was a big mistake.  Doing things to make a cheaper sku or using formats/technology that was already an industry standard may not have been.  Hell, a lot of your "Mistakes" are the reason why Sony is in third place since 2006.