Xbox’s Billion Dollar Problem
Why your Xbox 360 might break down more sooner than you think and what Microsoft is going to do about it.
Although reports have been circulating around the Internet that more and more Xbox 360 customers are getting the “red ring of death” but Microsoft remained oblivious of the fact. It seems that even now Microsoft cannot deny that fact due to Xbox 360s failing at an average rate of around thirty to thirty-three percent of all consoles sold.
Earlier this Thursday Microsoft announced that it will extend its Xbox 360 warranty coverage to three years from date of purchase and fix any consoles within the warranty period free of charge. With an estimated 2.5 million Xbox 360s reported to be defective, it will set back the company’s Entertainment & Devices division as much as by $1.1 billion. Sony executives might be glee with joy but it’s certainly not good news for Microsoft as it’s Entertainment division is operating at $315 million in the red in it’s third quarter. “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.”
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”.
This might be good news for Xbox 360 customers because not only has the warranty period been extended, but Microsoft will reimburse any amount that you have spent behind repairing your console.
Sony must also be celebrating this announcement. With Microsoft confirming hardware issues, and set back by a billion dollars, Sony is in a spot of pure advantage. A well-planned price frop may give them some more leverage in the console war for this year.
Now the next generation consoles are complicated pieces of equipments. The industry accepted standard is a failure rate of three to 5 percent. So what about the other consoles? Are they also facing the same fate as Microsoft? When compared against other systems, the Xbox 360 is failing at higher rates than its current competitors and predecessors.
Former EB Games worker Matthieu G. said that the failure rates for all other consoles are not high enough and guesses that most other console systems have a failure rate of less than one percent, including the PlayStation 3. Another EB Games manager conceded that in the hundreds of Wii units sold at that location thus far, zero have come back as defective.
So there you have it folks. The Xbox 360 might be one of the most successful console so far of this generation but the Xbox 360 is a less reliable machine than its competitors. Still, Microsoft has taken a bold step in the right direction, don’t you think?
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Feb 2nd, 2008 at 10:53 am
[…] just over a year but now it’s showing signs of problem. I am lucky that it’s not the dreaded red ring of death. It’s that the console just freezes and requires a restart. This has happened 4-5 times in […]
Jun 18th, 2008 at 10:58 am
[…] fix this mess. If you don’t know the whole story, then I suggest reading my previous article Xbox’s Billion Dollar Problem […]
Jun 18th, 2008 at 11:06 am
[…] seems that there is something really wrong going with Microsoft. After the announcement of the problems with Xbox 360 and a billion dollar spending to fix it, a number of events have followed like a row of […]
Jun 20th, 2008 at 5:50 am
I’m disipointed with your consoles .This red rings of death has happend to me 3 times if you dont fix this you might get sued ok?
Jun 23rd, 2008 at 8:02 am
[…] keep selling the Xbox 360 as long as there is a demand for it. That’s because they made a serious investment in the X360 and want to recoup the costs and hopefully make a profit with the 360. I believe that […]
Apr 1st, 2010 at 1:43 pm
I feel that the good days of console gaming has ended.Microsoft thought that they can beat Sony easily but they forgot that Sony was there for decades in the gaming industry.Their products are always reliable & I am sure there are still billions of happy PS customers out there,still the original Xbox was a reliable console too & it competed well with the Ps2 but still Ps3 had the better gaming library.I had my 360 which served me 2.2 years & I had all the fun a gamer can get,bought it in 2008 & saw the last of it in 2010 Feb @ such crucial time where many new games were coming out,I played-Halo3,MassEffect,Gow2& many more on it!!I feel sad for my 360 if anybody have any solution then don’t hesitate to let me know.Xbox360’s failure rate was I think enough to ruin the console image!!