Microsoft Pays $1 Billion Dollars For Xbox Repairs, Warranty Extended To Three Years
CNN reports that Microsoft is about to pay over $1 billion dollars for fixing Xbox 360s. Read the excerpt below:
Microsoft Corp. said Thursday said it would take a more than $1 billion charge to fix "an unacceptable number of repairs" to its Xbox 360 video game consoles and had missed shipment targets for the end of June.Microsoft (Charts, Fortune 500) is under pressure with mounting complaints about Xbox 360 failures on the Internet and growing expectations that Sony Corp. could slash the price of its rival PlayStation 3 console at a video game exposition next week.
Most are familiar with the three flashing red lights of death. I was visited by those ghastly lights myself a few months back and had an extremely positive experience getting it replaced. In speaking to Microsoft, CNN learned the company had investigated the cause of the failures and learned the three red flashing lights are caused by "a number of factors." Robbie Bach, president of Microsoft's entertainment and devices division, said many of those "factors" took time to show up and account for the huge increase in Xbox 360 failures. When asked how many consoles had been returned for repair, he only said "the number is too large."
No doubt this lead to Microsoft's extension of the system's warranty from one year to three, as announced today in a press release which you may read after the jump. Perhaps Microsoft is now trying to right this big ship of theirs? If they are, they had better do it quick. With a PS3 price drop right around the corner, I'm not so sure that even a highly probable Xbox 360 price drop at E3 would lure that many more to the system if they understand that it is going to go kaput on them not so long after they get it.
These are perilous waters for Microsoft, right now. I am confident as one of the Xbox faithful, but it wouldn't take much more of this nonsense to get me to swing the other way and I'm sure developers wouldn't be too far behind. Especially after reading how one guy picked up a used Xbox 360 only to find that it had been banned (I contacted Microsoft today, but I have yet to receive a response concerning that matter). While you come up with things to put in the comments section, you can go read the press release after the jump and/or read the full CNN story right here. I enjoy my 360 completely, but I don't like that we have to worry about when it'll die on us.
Microsoft Expands Xbox 360 Warranty Coverage
REDMOND, Wash. -- July 5, 2007 --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.
Super Timsy
Posted to Hot Stuff, Miscellany, Video Games on 5 July 2007
· Comments (2)
Other stuff like this: Microsoft, Red Lights of Death, Three Flashing Red Lights, Xbox 360
Look, I have a 360, and I've been really impressed with some fun games like Lost Planet and Gears of War and all, but this is just... frigging... ridiculous. I really don't understand why there are so many apologists for what is obviously a gigantic, monumental technological eff-up on Microsoft's part. The 360 may be cheaper than the PS3, but it's loud, it breaks, it's ugly (IMHO) and it's "awesome" online service is filled with ads for crap I don't want (Saw II?). Since I bought my PS3, I've been enjoying some great games, some amazing hi-def movies, on a quiet, reliable machine, and I've barely looked back. I'd honestly rather have fewer games on a more expensive machine I can count on than one that I'm constantly afraid is going to crap out on me.
Just one man's opinion, but honestly, stop sugar coating it. Microsoft deserves the finger on this one.
Five co-workers of mine also own 360's and ALL of them either had to send it in for repairs or buy a whole new core system.
I consider myself lucky so far as mine has only frozen up a few times. But I have to wonder if it's only a matter of time before I get the flashing red lights of death...