Microsoft Daily

Today, Microsoft announced extending it’s global Xbox 360 warranty coverage to three years, effective immediately.

The company said 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 date of purchase.

A press release issued by Microsoft said that it has conducted extensive investigations into the problem. That the company stands behind its products, and takes responsibility to repair or replace any Xbox 360 console experiencing the ‘three flashing red lights’ error message within three years from the time of purchase free-of-charge, which includes shipping costs.

The change in warranty applies both to existing and new customers of Xbox 360. And, Microsoft will retroactively pay-back the out-of-warranty repair costs paid by customers who’ve experienced such problems with their consoles.

The release even states that Microsoft will take a hit of nearly $1.05 billion to $1.15 billion in pre-tax charges (for the quarter ended June ‘07) towards anticipated costs under current and enhanced Xbox 360 policies.

However, if reports are true, the buzz is that it is the high failure rate associated with the Xbox 360 (nearly 30 percent) that is the real reason for Microsoft’s decision.

Back home, a reseller who’s been selling Xbox 360 since launch said that the failure rate cannot be as bad. At the most, it may be around 10 percent.

He said so far they have sold nearly 50 Xbox 360 consoles, out of which only one had to be replaced. And, he was all praise for Microsoft, which he said, provided that customer — incidentally based out of Lucknow — with a doorstep replacement in just 4 days.

Apart from this, he said there have been five or six complaints regarding heating problems and games hanging because of which.

Another reseller who’s been selling the console for maybe three or four months said they have sold about 15 consoles out of which one had a complaint regarding some game not working.

Mohit Anand, country manager for Microsoft India, refused to accept that there could be any talk about a 30 percent failure rate for the Xbox 360.

From an entirely Indian perspective, Anand said that customers would vouch for the kind of service warranty they provide, which remains unparalleled in the market.

Elaborating on this, Anand said, when a customer calls-in on their toll-free number, agents first try to trouble-shoot over the phone failing which they take a convenient time from the customer when a designated person provides a doorstep replacement for the faulty console.

Anand stressed that in an ecosystem where the customer is considered the ultimate beneficiary, the company is extending the warranty purely as a value proposition for its many customers. He expressed confidence that customers would welcome the move.

As regards speculation that a particular batch of consoles might have gone awry (globally), Anand refused comment.

All said, Xbox 360 is a complex console. Reportedly, it contains over 1,700 components, and nearly 500 million transistors. There could be a variety of scenarios causing general hardware failure — yet the symptoms will always remain ‘three flashing red lights’… 

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