Microsoft Acknowledges 360 Issues, Extends Warranty to 3 Years

RamblinLonghorn writes "Microsoft has announced that they are extending the warranty for all Xbox 360s to 3 years. This appears to be entirely retroactive and that 'those who have already paid for such repair charges can expect reimbursement checks for the amount of their console repair.' It seems as though Microsoft is accepting the blame for the hardware malfunctions, but it is worth noting that this warranty modification only applies in the 'Red Rings of Death' situation."

MS??

They actually admitted to anything that was considered wrong from their part?

I'd like a 360

I'd like a 360. I really would. There are games I'd like to play (PGR3, Dead Rising, some others), as well as games coming out I'd like to play (Rock Band and many others). But I keep hearing about failures. I know people who are on at least their 3rd 360. I've seen the estimations recently putting the failure rates as high as ~30% (which, even if is off by 5x is quite high). If you combine that with the noise the things make, I'm hesitant to buy one. I keep waiting for a re-spin of the silicon (moving to a smaller process should help with the heat/noise issues).

The Elite might have got me but instead of pushing the models down, they just put the Elite on top with a new higher price point.

Don't be so forgiving!

I'm astonished to read so many "mine is okay, except a game doesn't work" or "no problem so far, only a broken dvd drive" comments. Don't be so forgiving! This is a game console, not a PC. There's no reason why it should break within such a short timespan! I've bought dozens of consoles, and all of them still work. Some of them are over 20 years old!

Red rings of death

...and for those of us who have no idea wtf the "red rings of death are", see here [teamxbox.com]

(Posted anonymously to avoid karma whoring)

Bravo Microsoft

I'm not normally a fan of MS, nor do I own a 360, but this is a great move by Microsoft - and not something they NEEDED to do. They could have just fixed the problems and made it a year or so but by extending this to a three year warranty (retroactive) they are going to save a lot of people money.

Companies like GameStop who sell extended warranties though might not be happy since I certainly wouldn't buy one now that MS is backing their system up for 3 years.

Microsoft NEEDED to do this? No.

I work for a high tech company that makes expensive hardware, far pricier than the xbox, and I've come to understand a lot more about the cost of warranties from the supplier end. Extending warranties is essentially a loss for the the manufacturer - you're essentially betting when what you made will fail. That's weighed against the cost of making more durable components and the cost that a customer would not buy your product in the first place.

When the 360 first came out, someone made a decision that beyond one year it would cost the company too much to repair the consoles relative to the increased sales than would be had by having a longer warranty. They also had to take into account the bad publicity that could (and did) occur.

I'll be pure engineer here - someone at Microsoft redid the formula, given the knowledge of failures that have happened since release. This time around, the math said that enough future sales would be lost to outweigh the cost of extending the warranty. It's really that simple. It's also interesting to note here that they didn't make it a lifetime warranty (20 years or something). They probably ran that formula too, and decided that the math tips the other way if you let it last forever.

So did they NEED to do this? If by need you mean "saving face", then no. Being the retrospective hero doesn't help anything, only in the sense that it might affect future sales.

Re:Microsoft NEEDED to do this? No.

The formulas used to calculate warranties are meant to cover manufacturing errors. Every once in a while, a defective unit will get past quality control in the factory due to human error. The warranty is designed to protect customers if they get one of these units.

The "Red Ring of Death" is likely from a design flaw, not a manufacturing error. A manufacturing error would not account for the abnormal failure rate. It is literally built into every unit that leaves the factory. The only long-term solution to a design flaw is a product recall.

Extending the warranty is just a temporary solution because Xbox 360s will continue get the "Red Ring of Death".

Well...

It's not surprising. <retorical>What is it with all the new consoles having so many hardware problems?</retorical> Oh yeah... the bling $$$ bling.

Heh. My NES / SNES still work fine ~15 years later. Hell, even my SMS is fine!

Re:Well...

What is it with all the new consoles having so many hardware problems?...Heh. My NES / SNES still work fine ~15 years later.

Because there was no Internet back then* for you to hear about isolated cases of hardware failure. If someone's NES burned up, he went back to Woolworth's or whatever they had back then, got a new one and complained to his buddies. Now, consoles come out and the most freakish problems (hurling your Wiimote through the TV screen, for example) gets spread worldwide.

* Yes, I know that there actually was an Internet back then, with at least 11 users.

A $1 BILLION DOLLAR cost?

Assuming they just do full replace and junk, and pay full retail price, that is >2.5 MILLION failed X-Boxes in the next 2 years. Assuming each repair costs Microsoft only $200, they are budgeting for 5 MILLION failed x-boxen!

With only 11 million X-boxen shipped, that 33% failure rate is sounding like an UNDERCOUNT!

Re:A $1 BILLION DOLLAR cost?

Actually, it is almost EXACTLY that much - according to the BBC http://news.bbc.co.uk/1/hi/business/6275728.stm [bbc.co.uk]

what about 4-red lights?

The 360 in my apt has 4 lights lit. It used to be 3, but it's since decided to light the 4th after I attempted the towel trick to fix it (the towel trick worked once, but the second time, it didn't work at all, and shortly after that, the 4th LED lit).

We'll have to call MS when I get home to see if that's covered.

with any luck, they'll cover it and we wont' have to shell out 150$

this is amazing!

Its amazing when any big company willingly does something like this (without a class action, intense media coverage, etc). What is more amazing is its microsoft doing it. Guess they figure they can't afford to look bad at any level in such a high heat console war.

Props for Owning Up

Regardless of your opinion of Microsoft, they have continually impressed me with their willingness (eventual) to own up to issues with the console and extend the warranty retro-actively. I just can't see Sony doing the same thing in this situation. I feel good knowing that if I get the red rings of death (my friend already had one bout with it), that they will pay for it since my console will still be good for several more years now.

I can see it now...

Microsoft officially apologizing for Vista and offering XP licenses to those unhappy with it. Meanwhile, they work on a new OS that will actually run on modern hardware.

4th 360 Here

First one died within 8 hours of purchase, RRoD. 2nd one died 8 months later RRoD, 3rd one died 6 months after that, cd drive crapped out.

Best Buy covered all 3 death's but the third one required me to blow 60 bucks on a new "Protection Racket".

So I'm covered for any more RRod's for 2 more years.. and my "Protection Racket" will cover me for at least one more dvd drive failure.

I refuse to spend any more on this system, so my only question left is how many more I'll have die on me before I'm out of freebies.

WoW!!! That is a LOT of breakage...

Using their financial numbers as to the cost of extending the warranty to 3 years, MS themselves anticipates a full 3.8 million COMPLETE NEW replacement Xbox 360's to have to send out. That gives you an idea as to the failure rate they are seeing. This is at the current FULL RETAIL cost of the system and not using only repair costs. If it only costs $100 to repair, that would mean an anticipated 11.5 million failures during the 3 year warranty period.

this is awesome

I'm so glad I didn't buy that warranty extension.

I wonder how those that paid 150 bucks for the extended warranty from different companies feel about this?

What if you already paid for the MS warranty?

Is there any information about customers who have purchased an extended warranty from MS? (as I did after a RRoD prompted a replacement, and my 1 year retroactive warranty was about to expire) Any guesses as if that part of the "repair costs" that they indicated would be refundable?

Question

I've recently had problems with the USB ports on my PS3, but Sony won't touch it for free since I no longer have my receipt (nevermind that it's impossible for the warranty to have expired by now; I guess the policy saves them some money). So with Microsoft retroactively extending the warranty like this, what happens to those people who voided their warranty, thinking that it was expired?

A Very Nice Move

I got my 360 shortly after its initial release, and I put a lot of hours on it (especially in the first year -- not so much this year); for the years that I had it, it was rock solid, and I think it's been a great console. As it turns out, it finally died a month ago and I was disappointed to find that it was out of warranty... Until now. This warranty extension will mean a lot to me, and I am very grateful to MS for having put it in action. Thanks, guys!

Microsoft Knew and Denied

http://www.megagames.com/news/html/console/microso ftconfessandfixrrodepidemic.shtml [megagames.com] has gone all the way to say: [quote]Some people would believe that Microsoft have just discovered the issue and fixed it, as expected from a reputable multinational company. But when asked, Robbie Bach, president of Microsoft's Entertainment & Devices Division for a "little over first year" the "set of issues wasn't visible at all," but during the last couple of months the company has seen "significant increases, significant call volume, and significant attention" to the problem. During those "couple of months" Microsoft actively denied the problem several times. [/quote]

Corporate Maturity?

I'm actually fairly impressed that MS have finally decided to be mature about this problem and put a damage control system in place. Surely with their acceptance that they have a QA problem they will seriously invest in a solution to the ongoing hardware problems a select group of users have encountered. Thus far (touch wood) I've had no issues other than the occasional crash with my launch day 360! Thankfully this extended warranty period now gives me some piece of mind that I'm covered in the event of something going wrong.

Missing the point

Many people are really missing the bigger point here. This is like Hyundai offering a 10 year warranty on their cars. They are basically saying that the product you are buying is poorly designed/built and will fail.

Some people mistakingly think that Hyundia is offering a great deal without considering the cost of this arrangement. Sure, they fix whats broke, but what about the cost of getting it fixed, such as the day of vacation you had to burn when your car died, the tow truck to get your car to the garage, the time/hassle of arranging the service, the cost of the rental car you had to get while your car was in the shop for a week.

Add up all of these "hidden costs", and you could have just gone out and purchased a superior product in the first place.

These hidden costs are in this "great deal" from MS. What about the time you spend reporting the problem, unhooking and packaging it, the gas/time taking it to the post office. What about the 2-4 weeks you are without the 360, not only can you not play games, but you can't play movies or stream music.

Remember that cost includes a lot more than the price you initially paid, the most important of which is your ability to use the product.

Microsoft claims they fixed the issue

More important than the warranty is, in my opinion, that Microsoft claims that they fixed the issue. I quote Peter Moore from an interview by N'Gai Croal [newsweek.com]:

We're making improvements to the console itself that will reduce the occurrence of these issues.

Not quite as reassuring as I would have liked, but still good to know.

Re:Still, they break.

Perhaps offtopic, but...
They don't appear to repair 360s. I had a DVD drive failure and I got back a new console in just a couple days. Being in MN and sending it to Texas, there is no way they even had time to look at it to see what the problem was, they just send out a new one as soon a one comes in. Although I was very happy there was so little down time, I can't help but wonder why they would shell out a new console for what is likely a $15 repair. Even with labor, costs can't be that high. In my experience, disk drives don't seem to last much more than 3 years, if they are paying for a new console for every drive that fails in three years time, they are going to lose alot of money.

Re:Still, they break.

They dont shell out a new console, they ship you a refurbed unit.

Give them a CC# and they'll cross ship (send your refurbed unit out right now, before they recieve your return).

Then they fix yours, and put it in the pool to be sent to someone else.

It's how RMA's work.

Re:Still, they break.

Because of DRM issues they stopped doing that a while ago. Now they make an effort to return your repaired box to you. If it's broken beyond repair, only then do you get a refurb.

Re:Still, they break.

Are you nuts? You have three choices, nintendo, which is completely different to the others, so the choice is gonna be on other things than reliability (I don't care how stable it is if it isn't fun for me, no purpose), xbox, which isn't good for reliability (not bad either though) is the midrange console, possibly even the safe option and when something does go wrong they are prompt to take it back and fix it, and finally the sony PS3, which isnt known for reliability either, and again is quite a large step up. With those big a differences, I don't think reliability should be an issue in you buying a console, as reliability still is good in all of them, even if it varies a little we're talking about small degrees. Secondly if you claim reliability is most important cos what's the use if it doesn't work- things get fixed, on the whole quite well, and what's the point of a console if it doesn't do what I want it to do in the first place, reliably useless is still useless.

Four choices

> You have three choices, nintendo ... xbox ... and finally the sony PS3,

You forgot one. There is the PS2 as well. It's a decent, fun system and you can still buy games for it. It's not to be totally ignored just yet.

Re:Still, they break.

Eveything breaks... its a fact of life, from the space shuttle to the keyboard you typed your comment on... it all will eventually break. While the 360 did and may still continue to have quality control issues, its how the company handles the situation from that point thats importand, and recently MS have really impressed me with the way the handle most of the issues (with a few noted exceptions which any large company will have). Although they tried to supress the fact that they were having issues, they have now admited it, and in good faith. They extended the warranty to show good faith, not because they were obligated to, or had to.... infact many companys have problematic products still on shelves and refuse to service or extend the warranty once the issue becomes known... Just be glad you can get it fixed is what im trying to say here....


Hand some people free apples (free extended warranty), and they'll complain they havent been cored and seeded yet....

Re:Still, they break.

Quality control / reliability is the issue. How they handle it is at best damage control. The most they can hope for is people thinking "They really screwed the pooch there, but at least they agreed to adopt the puppies." As for stepping up with the warranty did they really step up or is this a preemptive step to avoid a large (and expensive) class action lawsuit.

Re:Still, they break.

MS have really impressed me with the way the handle most of the issues (with a few noted exceptions which any large company will have). Although they tried to supress the fact that they were having issues, they have now admited it, and in good faith. They extended the warranty to show good faith, not because they were obligated to, or had to....

If they initially lied about the issue and worked to cover it up, then *nothing* they subsequently do can be considered "in good faith".
They tried to scam people, got caught over a massive design failure, and are now doing damage control.

Good faith would have been noticing the issue first and working to ameliorate the damage they caused.
Going into damage control mode after being caught lying is not in any way "good faith".

It's amazing the shit people will willingly lap up these days. Truly bizarre.

Re:An Utter Train Wreck

And yet it still outsells its market competitor

Re:An Utter Train Wreck

The most amazing thing to me is that according to these figures the PlayStation 2 sold 188,000 units during May So the old gen PlayStation outsells the nextgen Xbox 360 and the PS3.

Top selling hardware for may is:

DS 423,000
Wii 338,000
PSP 221,000
PS2 188,000
Xbox 155,000
PS3 82,000
GBA 80,000

Even funnier. Handhelds are more popular then the big nextgen wonders.

Re:They Still Haven't Fixed the Problem

Indeed. Im sure Microsoft would have quite a bigger market share if it wasn't for the hardware issues. I know I personally really want to play current and upcoming 360 games, but I hate dealing with customer services and repairs with a passion, so I'm not touching one until its semi-reliable. I doubt I'm the only one thinking that way.

Re:not that bad

my 360 is actually very quiet (my PC is WAY louder with my 7 case fans)

I'm sure what you're saying is valid, and I'm glad you're happy with your purchase. This line made me laugh though. Your PC has 7 case fans, which has to make it abnormally loud for a PC (my PC only has 3 case fans, and that's if you include the power supply fan as a "case fan"). This is like saying my car runs amazingly quiet because it isn't as loud as a 747.

Re:not that bad

I think using a domestic vacuum cleaner on electronics is a bad idea, I've heard they generate a bit of static electricity...

Re:Still, they break.

You are a moron. All consumer electronics have a failure rate. And that rate goes to 100% as time goes on. I guess you should buy nothing.

Re:Still, they break.

Not sure why you got modded flamebait. It's true. Extending the warranty is not enough. Actually, they don't need to extend the warranty, they need to fix the hardware so it doesn't break anymore. I don't want to pay for an Xbox replacement in one year, and I don't want to pay in three years, and I don't want to pay in five years, and I still want to use my Xbox in 10 years when I can't pay even if I want to.

For heaven's sake, my VCS 2600 still works as well as the day it came out the box. I have a Pong, and it still works as well as the day it came out. And I still hook them up from time to time! There's no reason why all these 360s should die so easily, and if I want to play a little Crackdown 10 years from now, I should be able to.

Re:Still, they break.

Don't think you deserve "flamebait". I would not like the annoyance of sending my console away for repair either (once inconveniently acceptable but more then that no way). Of course any mechanical device will eventually fail as will any electronic device although this will normally take longer.

Taking game controllers for example. I have always been impressed with Nintendo (SNES, N64 and Gamecube), Sega and even Sony controllers since I would expect a life of no more than a few hundred hours but all of the controllers I own still work well after years of use. I have found that I prefer to pay for the genuine controller even though it is more expensive since all my third party controllers failed after about 50 hours of use. The exception being my wireless dual shock from Logitech (excellent product which works well on my PS3). I can't comment on the reliability of the Microsoft controllers although I do have a wireless Microsoft mouse that I find very reliable.

All Manufacturer's when they make a product allow for approx less than 1% (usually a lot less) failure in the first year and hopefully less then 10% over 5 years although this does depend on the product. If any company wants the customer to purchase their products then those products must be seen as reliable hence they invest in quality control and use statistical analysis to extrapolate reliability since failures must be taken into account when setting the price of a product. This is standard business practice and even a 2% to 3% failure rate over a year is unacceptable.

It appears that Microsoft has not even taken into account Manufacturing reliability testing 101 and IMHO have appeared to treat their console the same way they treat their software, however having a failure rate of over 10% is ridiculous (over 30% is insane) no company except Microsoft could afford this type of failure rate, in fact a failure of this scale would drive most companies out of business. One billion dollar my be small change to Microsoft but it is still a considerable amount of money that must leave many share holders fuming.

Granted that Microsoft is now offering a three year warranty although I am not sure if this is on the full Xbox360 package but it is very annoying if you keep having to send your machine in for repair or swap. Eventually you are going to loose customer confidence and they will go elsewhere.

I realise that this may seem strange to some but many customers' do want reliable products and are willing to pay for them. An extended warranty is peace of mind but only if a product is perceived as reliable in the first place. When you are still paying a reasonable sum of money for an Xbox360 you would like it to last more than three years. On a PC a three year lifetime may be acceptable but on a console it is not.

Re:An Utter Train Wreck

Crappy graphics - Halo 3 and Forza 2 - YEECH!

Is Wii any better?

Can't handle 1080p for real games

Neither can Wii.

Smaller than last gen storage format - only 7 gigs of space versus 8 gigs last gen

Last gen was 1.2 GB, no bigger than a Dreamcast GD-ROM.

No BluRay playback for 1080p HD movies

PS3 doesn't have HD DVD playback for 1080p HD movies either.