MICROSOFT EXTENDS 360 WARRANTY TO 3 YEARS FOR RED RING ISSUES

Microsoft has announced that due to the ongoing issues with the Xbox 360’s dreaded Red Ring of Death system failures, the company will be extending the system’s factory warranty to cover the defects that cause the issue to 3 years from the date of purchase.

I can’t begin to mention just how huge of an announcement this is. Microsoft has basically admitted that the failure rate on the Xbox 360 is far higher than they would like and have taken action to make sure that their customer base is treated fairly. To give you an idea of the scale of the problem, Microsoft will be taking a 1.15 billion dollar pre-tax charge to their earnings for the quarter ending June 30th to cover the cost of the extension. (If you’re wondering, this means that the cost of supporting the warranty will not be included in fiscal year 2008, meaning that Robbie Bach’s prediction that the Xbox line would be in the black by 2008 is still a reasonable possibility.)

In an open letter to their customers, Microsoft’s Peter Moore apologized to Xbox 360 owners for any inconveniences they may have experienced due to system failures and promised that the company would be retroactively reimbursing any fees paid by 360 owners for repairs due to the issue.

“As of today, all Xbox 360 consoles are covered by an enhanced warranty program to address specifically the general hardware failures indicated by the three flashing red lights on the console. This applies to new and previously-sold consoles. While we will still have a general one year console warranty (two years in some countries), we are announcing today a three-year warranty that covers any console that displays a three flashing red lights error message. If a customer has an issue indicated by the three flashing red lights, Microsoft will repair the console free of charge—including shipping—for three years from the console’s purchase date. We will also retroactively reimburse any of you who paid for repairs related to problems indicated by this error message in the past. In doing so, Microsoft stands behind its products and takes responsibility to ensure that every Xbox 360 console owner continues to have a fantastic gaming experience.

If we have let any of you down in the experience you have had with your Xbox 360, we sincerely apologize. We are taking responsibility and are making these changes to ensure that every Xbox 360 owner continues to have a great experience.” – Peter Moore

It should be noted that the extension (years 2 and 3) only cover issues related to the three red ring failures and does not cover the rest of the system. To clear up any confusion, Microsoft has made a FAQ available that covers many of the questions Xbox 360 owners may have about the updated warranty and have advised that they will continue to update the FAQ over the next few days.

One question that wasn’t covered in the aforementioned FAQ was what affect this would have on the warranty status of those who purchased the Xbox 360’s 2 year extended warranty directly from Microsoft. To get an answer to that issue, I called Microsoft’s customer support help line at 1-800-4MY-XBOX, and after waiting on hold for 1 hour and 15 minutes was advised that the extended warranty will begin once the 3 year warranty period has expired and that all services would be covered during that time.

I found that answer a little strange as one would assume that only the coverage for the Red Ring failures would continue into the 4th and 5th year of the warranty period, but the representative I spoke with assured me that this was indeed the case. While I’m taking that part of the answer with a grain of salt, I am at least confident in believing that those who purchased the extended warranty via Microsoft will have protection from general system failures (Red Ring of Death failures) for 5 years from the date of purchase.

My guess is that since Microsoft also stated that they believe they’ve found a way to fix the problem that this move may essentially be a long-term recall. If the problem is such that they know that most Xbox 360’s will fail within 3 years, this would allow them to repair the problems without the massive negative publicity a true recall would bring. The move should also allow Microsoft some breathing room at E3 in regard to the failure rate, so while it’s certainly a great move for the consumer, I wouldn’t go sending mushy love notes to the company just yet. Still, I don’t know about you, but I’m feeling all warm and fuzzy at the moment. Between the rumors of the PlayStation 3 price drop and Microsoft’s warranty extension, it’s been a pretty good day for gamers. For more information on the announcement, warranty procedures and what it all means to you, check out the below links.

• Microsoft Expands Xbox 360 Warranty Coverage – Official press release
• Xbox 360 Expands Warranty – Gamerscore Blog
• Open Letter From Peter Moore – Xbox.com
• Expanded Xbox 360 Warranty Coverage FAQ – Xbox.com

SHADY BUSINESS PRACTICES 101

If this story in the Consumerist is to be believed, BestBuy has started trying to push extended warranties for game purchases on customers. According to the article, they are not only giving the hard sell on it, but making some questionable claims about the reliability of game software;

“Today I bought Tetris DS at my local Best Buy, and they tried to sell me the 2-year protection plan or whatever it is. I refused the coverage, but I was surprised that it was offered. I’ve never received the protection spiel from a cashier when buying software… only hardware ( (I haven’t shopped at Best Buy in a while, so I have no idea if it s a recent development). After my refusal, the cashier tried to scare me by telling me “we get a lot of these things returned. I just want you to know that.” I’m mostly convinced that she was full of crap, but I’m just one DS owner… I’ve been playing video games for more than 25 years, and I don’t think I’ve ever had a cartridge or disc go bad on me. I had been led to believe that Flash memory is more durable than the old GBA cartridges.” -Reader Phil H. as reported by the Consumerist.

Going beyond the issue of if a 2 year warranty is really needed on a game cartridge and whether or not BestBuy is playing hard and fast with the rules as far as what they’re telling their customers, think about this… If the game breaks 2 years down the road, what are the odds that they’re still going to have a copy of it on the shelves to replace yours with? It’s not like a stereo system where “something similar” is going to cut it.

Anyway, check out the Consumerist article here, and if you pick up a game in BestBuy anytime soon, feel free to drop us a line and let us know if the same type of offer was made to you.