14 DAY TRIAL // Following announcements of Xbox 360 units freezing, scratching discs and dying on users due to several internal issues, patches and even games (remember the Forza 2 issue?), Microsoft has decided to treat its users accordingly, expanding its global Xbox 360 warranty coverage. This means that any Xbox 360 customer who experiences a general hardware failure indicated by three flashing red lights will now be covered by a three year warranty from the day he/she buys it.
As you'd imagine, all other existing Xbox 360 warranty policies remain in place. Isn't it odd though? Microsoft's finally taking care of its users the way it's supposed to. Not even they can deny that the Xbox 360 has serious issues and recently, it looks more and more like they're admitting it: "The majority of Xbox 360 owners are having a great experience with their console and have from day one. But, this problem has caused frustration for some of our customers and for that, we sincerely apologize," said Robbie Bach, president of Microsoft's Entertainment & Devices Division. "We value our community tremendously and look at this as an investment in our customer base. We look forward to great things to come."
This is of course, the result of identifying a number of factors which can cause general hardware failures indicated by three red flashing lights on the console and this is the very reason for which Microsoft has made improvements to the console and is now enhancing its warranty.
What's interesting though, is that Microsoft is said to take a $1.05 billion to $1.15 billion pre-tax charge to earnings for the quarter ended June 30, 2007 for anticipated costs under its current and enhanced Xbox 360 policies. And, as the official report informs, for any customer who has previously paid for repair expenses related to the red ring of death, Microsoft will retroactively reimburse them.
The final announcements related to the warranty expansion will be made in a teleconference for financial analysts and investors with Robbie Bach, president of Entertainment and Devices, Chris Liddell, senior vice president and chief financial officer, and Frank Brod, corporate vice president and chief accounting officer.