Microsoft extends the warranty coverage on its Xbox 360 console.
No longer content adhering to the adage, "if it ain't broke, don't fix it," Microsoft on Thursday announced that it will extend its Xbox 360 warranty coverage to three years from date of purchase. The warranty covers any consumer who experiences the general system failure indicated by three flashing red lights, more commonly referred to as the "red ring of death." Both shipping and repair costs will be covered.
The new warranty will represent a $1 billion pre-tax charge on Microsoft's earnings for the year's final quarter. This marks a notable setback for the company's Entertainment & Devices division, who reported a $315 million operating loss in the third quarter.
"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.
The warranty also retroactively reimburses the small but vocal community of console owners who have already paid to get the error fixed. Though the company has not revealed the cause behind the hardware malfunctions, it claims to have "identified a number of factors which can cause general hardware failures" and "has made improvements to the console."
The announcement is intended to soothe the tide of disgruntled gamers who have experienced the failure, many of whom have meticulously documented numerous failed attempts at getting it repaired. In a conference call, Bach acknowledged an increase in the amount of attention the issue has been receiving. Although he didn't mention a specific number of problems, he called the rate of repair requests "too high for our liking."
Peter Moore, corporate VP of Microsoft's Entertainment and Devices division, has posted an open letter on the official Xbox site further explaining the decision.
