Earlier quoted context omitted.
I would argue the cost of the RRoD was a heck of a lot more than $1B because of all the lost sales. People didn't want to invest in hardware that was going to break 5 times over. Agreed. Microsoft only wrote down the $1B as an expected total cost of fixing broken Xboxes. Who knows how much money they lost?
I've been seeing the notion of accounting for the loss of sales due to "reputation" come up on HN recently and I wish to dispute it. First, most of the time when we're talking about business and we talk about costs we're clearly talking about accounting costs. This applies to startups, too. When you're talking about accounting costs, you don't get to include economic costs (e.g., opportunity cost.) Second, isn't tryi…
People are asked to put value on intangibles all the time. You might want to write them all down to zero, but the rest of us value Wordsworth more than the dead trees his words are printed on.