Microsoft Extends Xbox 360 Warranty

Microsoft announced late yesterday that it expects to pay out over $1 billion in expenditures to take care of new and existing Xbox 360 owners who have been experiencing the "Red Ring of Death" errors on their gaming consoles. Microsoft has decided to extend the warranty on the Xbox 360 to three years after too many of the gaming systems incurred system failures. While the company wasn't specific about the problems, it is assumed that the primary culprit was related to the known overheating issues.

An open letter from Peter Moore:

To our Xbox Community:

You've spoken, and we’ve heard you. Good service and a good customer experience are areas of the business that we care deeply about. And frankly, we've not been doing a good enough job.

Some of you have expressed frustration with the customer experiences you have had with Xbox 360; frustration with having to return your console for service after receiving the general hardware error message on the console.

The majority of customers who own Xbox 360 consoles have had a terrific experience from their first day, and continue to, day in and day out. But when anyone questions the reliability of our product, or our commitment to our customers, it's something I take very seriously.

We have been following this issue closely, and with on-going testing have identified several factors that can cause a general hardware failure indicated by three flashing red lights on the console. To address this issue, and as part of our ongoing work, we have already made certain improvements to the console.

We are also implementing some important policy changes intended to keep you in the game, worry-free.

As of today, all Xbox 360 consoles are covered by an enhanced warranty program to address specifically the general hardware failures indicated by the three flashing red lights on the console. This applies to new and previously-sold consoles. While we will still have a general one year console warranty (two years in some countries), we are announcing  today a three-year warranty that covers any console that displays a three flashing red lights error message. If a customer has an issue indicated by the three flashing red lights, Microsoft will repair the console free of charge—including shipping—for three years from the console’s purchase date. We will also retroactively reimburse any of you who paid for repairs related to problems indicated by this error message in the past. In doing so, Microsoft stands behind its products and takes responsibility to ensure that every Xbox 360 console owner continues to have a fantastic gaming experience.

If we have let any of you down in the experience you have had with your Xbox 360, we sincerely apologize. We are taking responsibility and are making these changes to ensure that every Xbox 360 owner continues to have a great experience.

This will take a few days to roll out globally, and I appreciate your continued patience as we launch this program. I've posted an FAQ that should address some additional questions, and we'll update it over the next few days.

I want to thank you, on behalf of all us at Microsoft, for your loyalty.

Robbie Bach, President of Microsoft's Entertainment and Devices division, said the company made some production and manufacturing changes that will reduce Xbox 360 hardware lockups, but he didn't specify the problems or if any other known issues existed or were addressed. It is estimated that the Entertainment and Devices division has written off over $6 billion since 2002.

The extended warranty coverage means that Microsoft will cover shipping of affected units as well as labor and repairs for consoles experiencing hardware failures (typically indicated by three flashing red lights on the front of the console. For anyone who has paid for out of warranty coverage, including any related shipping fees, Microsoft will be reimbursing those consumers as well. Up until now, the warranty expired after 1 year for US customers and after 2 years for European consumers.

Apparently, the issue was so severe it was widely reported online that Microsoft was running out of the so-called "coffin" boxes used to return Xbox 360 consoles to Microsoft for repair. In some online news sources, up to a 33% failure rate has been unofficially suggested.

While this problem appears to be widespread, Microsoft does indeed appear to be doing the right thing and it's hard to fault them too much. We're glad to see them take this approach, even if it was slightly reactive from a rapidly-growing base of complaints about the seemingly widespread hardware failures of the Xbox 360 consoles.