Microsoft Facing One Billion Dollar Xbox Bill

Quote:

Microsoft has said that it is facing a bill of more than $1bn to cover the cost of offering extended warranties, after failings with its Xbox 360.

The company admitted it had been forced to make "an unacceptable number of repairs" to the consoles after key hardware failed.

Customers who suffer the problems will now be given a free three-year warranty, the company said.

The failures are indicated by three red flashing lights on the console.

Microsoft, has not revealed how many of its machines have suffered the problem, but said the number was "bigger than we are comfortable with."

It added that the move - which will also see some people reimbursed for postage and repairs on consoles which were out of warranty - was aimed at keeping the loyalty of its customers.

"The majority of Xbox 360 owners are having a great experience with their console and have from day one," said Robbie Bach, president of Microsoft's Entertainment & Devices Division.

"But this problem has caused frustration for some of our customers and for that, we sincerely apologise."

It added its Xbox division was still expected to make a profit during the financial year beginning 1 July 2007.

Migration manoeuvre

Separately the company has announced an October launch of its advanced version of the Xbox - the Xbox 360 Elite - in Japan, where it lags behind Nintendo and Sony in the console market.

And the company has also unveiled plans to open a software development centre in Canada which it said was a way of hiring talented people from abroad who would struggle to obtain a US working visa.

The Vancouver location would "allow the company to continue to recruit and retain highly skilled people affected by the immigration issues in the US", Microsoft said.

http://news.bbc.co.uk/2/hi/business/6275728.stm

Not only do they make very breakable gaming units - but they hate on America for having laws against illegal immigrants!

Jam it back in, in the dark.

Cheap slave labor in Canada, sounds right down Microsoft's alley =p

I never would have guessed repairs would rack up a billion dollars of debt for the company, but...somehow I'm not surprised. As long as that bill isn't being paid by the consumer, and MS is still making money, I don't think any of us are going to care much.

Maybe investors have reason to be worried, though.

There's nowhere I can't reach.

I really posted this to inform those of us with broken or previously broken Yboxes that we now have a 3 year warrenty on the fixed product, not so much that Microsoft is losing a billion dollars.

This thing is sticky, and I don't like it. I don't appreciate it.

Then you picked a poor topic for it, me lad!

I am a dolphin, do you want me on your body?

Originally Posted by LeHah

I really posted this to inform those of us with broken or previously broken Yboxes that we now have a 3 year warrenty on the fixed product, not so much that Microsoft is losing a billion dollars.

Oh ok.

Wicked, free 3-year warranty!

(break your xbox on purpose)

Most amazing jew boots

Note that the warranty extension is only good for the 3 red lights error. Anything else is still just the usual one year warranty.

What kind of toxic man-thing is happening now?

As many people that bitch and moan about how the 360 hardware is just soooo terrible, at least they can't say that Microsoft isn't taking it seriously. Microsoft sure sounds like they are doing their best to do right by their customers on this.

FELIPE NO

So does it cover your broken Ybox, Lehah? Hooray for big corporations paying for their mistakes!

What, you don't want my bikini-clad body?

Originally Posted by russ

As many people that bitch and moan about how the 360 hardware is just soooo terrible, at least they can't say that Microsoft isn't taking it seriously. Microsoft sure sounds like they are doing their best to do right by their customers on this.

I am not so sure! It took MS near two years to own up to this issue and come out and apologize and upgrade the warranty to a decent length. Their actions up until now have been less than serious IMO. 3% failure rate, yeah right! I guess the threat of a class action lawsuit has a way to get companies to do the right thing...

That said, this is definitely a good start and I would hope MS keeps on working to make sure the newer models don't need said warranty by fixing whatever the issue is with the current models.

Jam it back in, in the dark.

It is good to see them doing something to help those ho have to deal with a broken 360.

Originally Posted by Guru

Cheap slave labor in Canada, sounds right down Microsoft's alley =p

Bout time Canada did something useful

Spoiler:

lol

There's nowhere I can't reach.

Beside the fact that this thread is clearly in the wrong forum I think it's a really smart move from Microsoft to gain more loyalty, and gives an additional slap to Sony.

This thing is sticky, and I don't like it. I don't appreciate it.

Originally Posted by Temari

So does it cover your broken Ybox, Lehah? Hooray for big corporations paying for their mistakes!

Its sad that the reality of corporate practice these days is for consumers to be surprised and have a positive attitude with what should be nominal and expected, of large businesses to fix problems with defective products they have sold.

I am a dolphin, do you want me on your body?

I got burnt on the original Xbox, with a shitty Thompson DVD drive. I knew the 360 would have massive hardware failure too, so I didn't buy one. I'd probably buy a 360 now if they'd just tell us what went wrong and how they're fixing it. This nebulous 3-year warranty deal doesn't cut it.

I was speaking idiomatically.