Xbox 360 Repairs Will Cost Microsoft $1B

[weezer]

Some bad news for Microsoft. Thankfully, Microsoft has great service and will repair any defective 360's for free.

SEATTLE - In another setback for Microsoft Corp.'s unprofitable entertainment and devices division, the company says it is planning to spend at least $1 billion to repair serious problems with its Xbox 360 video game console.

Microsoft declined to detail the problems that have caused an onslaught of "general hardware failures" in recent months but said Thursday it will extend the warranty on the consoles to three years.

The glitches, and the bad publicity, could weigh the company down as it claws for market share in the highly competitive console market. In May, the Xbox 360 ranked No. 2 in unit sales behind Nintendo's Wii, but still beat out Sony's Playstation 3, according to data from NPD Group.

"We don't think we've been getting the job done," said Robbie Bach, president of Microsoft's entertainment and devices division, which also makes the Zune digital music player, a distant competitor to Apple Inc.'s powerhouse iPod. "In the past few months, we have been having to make Xbox 360 console repairs at a rate too high for our liking."

Bach said the company made some manufacturing and production changes that he expects will reduce Xbox 360 hardware lockups, but he declined to identify the problems or say which others might remain. Microsoft said it will record a charge of up to $1.15 billion for its fourth fiscal quarter, which ended June 30, to cover the additional costs associated with the warranty extension.

The news comes just days before the video game industry descends on Santa Monica, Calif., for its annual E3 conference, and it could overshadow Microsoft's plans to build buzz for holiday season video game releases and "Halo 3," a much-anticipated shoot-'em-up for the Xbox 360 set to launch in September.

The software maker also said Thursday that sales of the game console fell short of expectations for the fiscal year that just ended.

Matt Rosoff, an analyst at the independent research group Directions on Microsoft, estimates that Microsoft's entertainment and devices division has lost more than $6 billion since 2002.

Read the rest here.

[Cabe]

I read a report that said the Xbox360 has a failure rate of about 30-35% which is a huge failure rate.

[VAMP]

Originally Posted by Cabe

I read a report that said the Xbox360 has a failure rate of about 30-35% which is a huge failure rate.

I read the same thing. Has anyone on this forum had the RROD? This is the main reason I haven't gotten a 360 yet. I'm gonna wait until they get this whole situation sorted out, if they ever do. I hate having to deal with customer service if I can avoid it.

[The Juggler]

Nope no RROD problems... again not sure if the figures banded around are fact or fiction... wonder how many 360 owners have had this problem on here...

This latest news from Ms is a good thing to stiffle the anti-360 brigade.... and not forgetting a great tax dodge on their part as well.... :wink:

Good for Ms is what I say... and really a 3 year limited warrenty should be on ALL electronic goods.



Des



:roll:

[Berserk_Fury]

Originally Posted by VAMP

I read the same thing. Has anyone on this forum had the RROD? This is the main reason I haven't gotten a 360 yet. I'm gonna wait until they get this whole situation sorted out, if they ever do. I hate having to deal with customer service if I can avoid it.

If you have the money for it, I would have gotten it now. They offer a 3 year warranty, so the only thing you have to lose is a couple of days without gaming, since the repairs and shipping are free.

[The Juggler]

As stated belowe... the early versions seem to have had some over reported problems but later versons even have quieter dvd drives etc... so buy away.



Des


:roll:

[VAMP]

I've heard that by this autumn they're supposed to start using 65nm chips instead of 90nm chips and this is supposed to help the system run cooler which will in turn supposedly eliminate the problem. If they do this I'll get one most likely.