the worst mistake they made was buying rare for 300 mil what good has come out of it??

Launching without the hard drive.

this one, was a step back from the prior console..and caused at least for a time major games to be held back a bit, it sems now some games require hds for full functionality, but i cant think of a game that is sold in stores that wont run without it...  still should have never been an issue....

also they should have been user replace able with either 3.5 or 2.5 hds... ive got a spare raptor that could have helped my load times

they covered rrod by offering a 3 year warrenty ... which really should be standard on all three consoles, i was really hopeing the others would follow with that, but we can only dream

haha

no not really.

Not having a HDMI port on the original models? Not sure if that was to do with price or what not, but it's annoying.

The stupidest mistake has to be rushing the thing too fast out the door. It gained them marketshare, but cost them a huge amount of money and tarnished their reputation somewhat in the gaming community.

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.

Hard Drives didn't cost that much, the only reason they didn't make it a standard was to charge an incredible amount for the HDD accessory.

And I wonder why they are charging for the wifi now with the slim since not many may even use it.....

^^^Hell, I don't know.  I guess it's probably cheaper now than it was in 2005 (or 2004 or whenever they designrd the console).  It's probably more benificial to have Wi-Fi as a feature now than it was five or six years ago when Wi-Fi wasn't as necessary.  It's just like when broadband came out--the tech was available but not everyone had/could afford it.  It was a VERY bold move making broadband standard with the original Xbox.  Luckily, it worked out

I say not buying BioWare was the stupidest mistake made by MS. Also letting Bungie go was another mistake. And RROD is obvious so no point in stating that. So mismanagement of first party developers is the biggest mistake. Otherwise Dragon Age and Mass Effect would only be on xbox but hey as the saying goes the third time is the charm so lets hope the next xbox is perfect and MS doesn't manage to mess up with first party developers. And also buy Epic Games and some other studios. We all know MS can afford it but they choose to buy companies like Rare instead of BioWare which makes no sense in my opinion. 

RROD is no. one. They showed that they can't build a good system. 

Lack of first party support. The games I wanted to play were either on the PS3 or on PC. Why do I need the Xbox for? Halo? Please! Even Gears 1 is available on PC. I played the whole Gears 2 on my friends Xbox and that's my last game on it.  

DVD is also a big problem. I guess it held the gaming industry back because developer could not expand their materials due to lack of space. Then they ported games to PS3 not other way round. So, it was always a 9 GB game from the third parties which made the industry go back even 5 years back. 

No web browser is also a mistake. If you can steam videos over net, play games over net, even do chat (cross-game) over net, why the hell you can't BROWSE it?

Buying Rare was no mistake.  Rare may not have made a AAA game in a long, long, long, long, long, long, time but they do things behind the scenes, now.  From what I read, Rare was HUGE part of the development of Kinect, Avatars, and the current Xbox 360 dashboard.