thx1139 said:
MS didnt write off anything. A loss in a particular division just offsets profits in another. XYZ company makes 1 million in 1 portion of business and loses 500K in another portion of the business means the XYZ only made 500K and they pay taxes on the 500K. |
MS absolutely did "write off" the warranty extension costs due to RROD. It was a smart move, although they should have been more open and responded more quickly, taking a lot longer than they should have to admit the issue.
Here's some coverage from around the event:
http://www.ecommercetimes.com/story/58422.html
http://hlime.wordpress.com/2007/07/07/xbox-360-3-year-red-ring-of-death-warranty-enhancement/
The write off was basically taking a one time hit for the estimated costs of RROD as while large it was small enough to be covered by their overall revenue and profits and this allowed MS to show profits much earlier for 360 than would otherwise have been the case. Writing off the charge basically means taking your lumps up front and being done with it. If they hadn't the cost of covering RROD would have been spread out longer and would have held back when they could claim profitabilty for the 360.
Try to be reasonable... its easier than you think...