Xbox Ring of Fire Burns MS for $1 Billion

But don't worry - you're covered for even longer now.

Xbox 360 owners now have something more substantial than hot towels to look to should their console show the dreaded Red Ring of Death.

Peter Moore's had a busy week this week

For more than a year now, owners of Microsoft's console have been plagued by burned out consoles, which signaled their death with three red lights on the front of the machine.

Microsoft, which has until this week been at pains to avoid commented directly on what anecdotal reports suggested was a higher than normal failure rate, relented on Thursday and admitted that things were not as they should be.

"We've had a number of Xbox 360 console repairs that have been unacceptable to us over the past few months," Microsoft vice president Peter Moore told GameSpot, in one of many interviews on the matter this week.

He said that Microsoft had investigated the issue and found several factors that were responsible for what the company is calling a "general hardware failure indicated by three flashing red lights".

To make amends, Microsoft is retroactively upgrading all warranties against general hardware errors of this kind to three years.

This means that all Xbox 360s sold so far and the ones sold going forward will be covered for three years from the date of purchase. Microsoft is also going to refund repair costs to anyone who has paid for out-of-warranty repairs due to these issues.

It's a bitter pill for Microsoft to swallow. The company has steadfastly refused to comment on how high the failure rate of Xbox 360s is, compared to less than 5 per cent in most electronics.

Because of this week's announcement, Microsoft has taken a charge of around $1.15 billion on earnings for its fiscal year, which ended on 30 June.

"The majority of Xbox 360 owners are having a great experience with their console and have from day one," Robbie Bach, the head of the Xbox team at Microsoft, said in a statement, adding: "This problem has caused frustration for some of our customers and for that, we sincerely apologize."

Alex Wollenschlaeger
Editor, Kikizo