Microsoft’s problems on the video game console front continue. The company today announced that it would be extending its global Xbox 360 warranty to three years coverage—from the date of purchase—for anyone experiencing a general hardware failure, which is indicated by three flashing red lights. Microsoft said it will retroactively pay-back the out of warranty repair costs paid by customers who have experienced such problems. The company estimates this will end up costing it in the area of $1.05 to $1.15 billion in pre-tax charges.
Many are saying what may look like some sort of benevolent action by Microsoft is actually a case of the company trying to plug the holes in the dam. Word on the Web is that Microsoft is doing this because of the high rate of failure associated with the system (nearly 30%). Xbox 360 is the second best selling system behind the incredibly popular Nintendo Wii. Sony’s Playstation 3 is the third most popular system.
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