1 billion dollars - just think about that number for a minute. It’s a large number, a huge dollar amount, and that’s how much Microsoft is estimated to spend on Xbox 360 repairs.
According to Robbie Bach, President of Microsoft’s entertainment and devices division, “In the past few months, we have been having to make Xbox 360 console repairs at a rate too high for our liking.” Bach didn’t go into specifics, other than to say that there have been “general hardware failures” which is generally signified with three flashing red lights.
As a result of the failures, Microsoft has announced that they are extending all Xbox 360 warranties to three years. This includes all 360 consoles that were purchased prior to the announcement. This also means that those who have had to pay for repairs will be reimbursed by Microsoft for the costs that they incurred.
Currently the Xbox 360 is ranked #2 behind the Wii and ahead of Playstation 3. Bad publicity could potentially effect this, but it does sound like Microsoft is handling it properly by extending the warranties. Microsoft has also said that they have made improvements to the console which should help reduce the amount of repairs needed for the newer Xbox 360 consoles.
If I were Microsoft, I’d be getting a little nervous right now. Analysts say that Microsoft has lost more than 6 billion from their entertainment and devices division since 2002. I thought 1 billion dollars was a huge amount to be spending on repairs, but 6 billion is an even larger amount that’s hard to fathom.
Hopefully the Fall release of Halo 3 will be enough to keep Microsoft and the Xbox 360 console going strong.
Source: AP [via Yahoo]
It’s a real plus for Microsoft to be stepping up to the plate and taking financial responsibility for machines ill prepared for prime time. However, many people vote with their pocketbook and you only get one chance. Blow that one chance and you’ve lost them.
That is a fairly large number, but do remember that’s not just going off of the 360. I’m guessing one of Microsoft’s biggest losses in that area so far will have been the Zune and realted media stores. I don’t think it’s out over here yet, but if it was I wouldn’t know and that’s because I see little reason anyone would get one. The loss will also include the Xbox’s large shortfall behind the PS2 and the fact that Live was poorly subscribed until the end of that console’s head-boy time. Plus, it’s not like Microsoft don’t have money to spare from their other divisions.
I think it is nice to see Microsoft stepping up like this and when they could have just ignored the problem and pissed their customers off. Judging from what I’ve seen it is Microsoft and Nintendo that are owning the gaming market right now, because I know almost no one that has a Playstation 3. And since the Xbox 360 had such a head start on the other two systems most of the people I know own one of those, and then picked up the Wii because it was cheap compared to the PS3. So I think Microsoft is doing farely well with the Xbox now.