Microsoft expands Xbox 360 warranty coverage (3 years, retroactive)

[Hume]

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Microsoft Corp. today announced that it will expand its global Xbox 360 warranty coverage. Any Xbox 360 customer who experiences a general hardware failure indicated by three flashing red lights will now be covered by a three year warranty from date of purchase. All other existing Xbox 360 warranty policies remain in place.

As a result of what Microsoft views as an unacceptable number of repairs to Xbox 360 consoles, the company conducted extensive investigations into potential sources of general hardware failures. Having identified a number of factors which can cause general hardware failures indicated by three red flashing lights on the console, Microsoft has made improvements to the console and is enhancing its Xbox 360 warranty policy for existing and new customers.

Microsoft stands behind its products and is taking responsibility to repair or replace any Xbox 360 console that experiences the "three flashing red lights" error message within three years from time of purchase free of charge, including shipping costs. Microsoft will take a $1.05 billion to $1.15 billion pre-tax charge to earnings for the quarter ended June 30, 2007 for anticipated costs under its current and enhanced Xbox 360 policies.

"The majority of Xbox 360 owners are having a great experience with their console and have from day one. But, this problem has caused frustration for some of our customers and for that, we sincerely apologize," said Robbie Bach, president of Microsoft's Entertainment & Devices Division. "We value our community tremendously and look at this as an investment in our customer base. We look forward to great things to come."

For any customer who has previously paid for repair expenses related to the three flashing lights error message on the Xbox 360 console, Microsoft will retroactively reimburse them.

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Not a rick-roll

[pa3lsvt]

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Microsoft has made improvements to the console

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LOL, I guarantee they did nothing but flog the contract manufacturer. *Maybe* change brand of solder paste. Proper lead-free solder reflow profile + Automated X-ray Inspection FTW.

At least they are making good, but it took them forever to admit something went horribly wrong. Very likely caused by launching before the mfg. was ready to ship in the volumes they required or by poo-poo'ing reliability test failures.

[Soul Daddy]

A good step that should've been taken a while ago. I'm still more likely to get a PS3 until they actually resolve the problem.

[Thanir]

I'm happy about this news [img]/images/graemlins/smile.gif[/img] I have a launch day unit that still hasn't had any issues, but I have been worried about the Red Rings of Death. Guess I don't have to worry about it as much for the next yr and a half.

[Dire]

I also have a launch unit that's never had any problems. I wonder how many of the problems are caused by people sticking it in small enclosed cabinets frying the system, or moving the console while it's spinning a disk - scratching it up.

Anyhow, whether it's real hardware failures or consumer stupidity. I'm happy about this. [img]/images/graemlins/laugh.gif[/img]

[Hume]

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I also have a launch unit that's never had any problems. I wonder how many of the problems are caused by people sticking it in small enclosed cabinets frying the system, or moving the console while it's spinning a disk - scratching it up.

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I'm pretty sure microsoft isn't taking a hit over 1 billion dollars because there are people sticking their consoles in small enclosed cabinets. To put some perspective on it, even at $400 a console, that is over 2.5 million consoles replaced.

[Dire]

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I also have a launch unit that's never had any problems. I wonder how many of the problems are caused by people sticking it in small enclosed cabinets frying the system, or moving the console while it's spinning a disk - scratching it up.

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I'm pretty sure microsoft isn't taking a hit over 1 billion dollars because there are people sticking their consoles in small enclosed cabinets. To put some perspective on it, even at $400 a console, that is over 2.5 million consoles replaced.

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1. That is anticipated costs resulting from the plan, not immediate costs.

2. Each console costs MS well over $400.

3. There is way more cost in the whole replacement cycle than just the cost of the console.

4. There are unknown financial implications between MS and retailers who previously were able to make a killing selling extended warranties - whereas those are now useless.

Most of all though, the thing I just don't get is that there seems to be a small minority of people just having incredible problems - many of these people being on their third or even fourth consoles. Yet, the vast majority of others have never had any problems and are still on their first console. If there weren't some localized variables, you'd expect a much more normal distribution of failures.

[Hume]

If we assume a normal failure rate of 3-5% (as earlier claimed by microsoft), let's be generous and say 5%, that would mean there would be about 500k faulty consoles sold right now. $1.000.000.000/$500.000 = $2000 for every consol that has broken down. If you still believe that the problems reported with the consoles are due to incompetent users you are either delirious or being paid to do viral marketing.

[Soul Daddy]

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If we assume a normal failure rate of 3-5%

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I'm not willing to assume that when figures 10x as high are being thrown around.

[Thug Bubbles]

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Most of all though, the thing I just don't get is that there seems to be a small minority of people just having incredible problems - many of these people being on their third or even fourth consoles. Yet, the vast majority of others have never had any problems and are still on their first console. If there weren't some localized variables, you'd expect a much more normal distribution of failures.

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Where do you get "vast majority" from? The only information we have is anecdotal, and from the furor on the internet it would indicate the exact opposite of what you said.

All I know is that Almost everybody I know with an Xbox (around 20) has had to return theirs. I've had to return mine after two months of average use and it was in a cool, well vented area.

This is the first time that a console has had such a frenzy with respect to it's failure rate. I doubt that the gaming world decided to mal-treat their 360 all of a sudden after years of previous console usage. I know people on their 8th and 9th Xbox, while being on their first PS2, PS3, N64, etc.

Besides, even if you assume it costs them 'well over 400' they aren't out right replacing each console, they are fixing them. And it costs about 130 for an unwarrentied Xbox to fix the three rings of death (or, used to cost i should say)