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Microsoft Acknowledges 360 Issues, Extends Warranty to 3 Years
RamblinLonghorn writes "Microsoft has announced that they are extending the warranty for all Xbox 360s to 3 years. This appears to be entirely retroactive and that 'those who have already paid for such repair charges can expect reimbursement checks for the amount of their console repair.' It seems as though Microsoft is accepting the blame for the hardware malfunctions, but it is worth noting that this warranty modification only applies in the 'Red Rings of Death' situation."
They dont shell out a new console, they ship you a refurbed unit.
Give them a CC# and they'll cross ship (send your refurbed unit out right now, before they recieve your return).
Then they fix yours, and put it in the pool to be sent to someone else.
It's how RMA's work.
I don't need no instructions to know how to rock!!!!
Quality control / reliability is the issue. How they handle it is at best damage control. The most they can hope for is people thinking "They really screwed the pooch there, but at least they agreed to adopt the puppies." As for stepping up with the warranty did they really step up or is this a preemptive step to avoid a large (and expensive) class action lawsuit.
"Good things don't end with eum, they end with mania or teria." - H. Simpson
Actually, it is almost EXACTLY that much - according to the BBC http://news.bbc.co.uk/1/hi/business/6275728.stm
I work for a high tech company that makes expensive hardware, far pricier than the xbox, and I've come to understand a lot more about the cost of warranties from the supplier end. Extending warranties is essentially a loss for the the manufacturer - you're essentially betting when what you made will fail. That's weighed against the cost of making more durable components and the cost that a customer would not buy your product in the first place.
When the 360 first came out, someone made a decision that beyond one year it would cost the company too much to repair the consoles relative to the increased sales than would be had by having a longer warranty. They also had to take into account the bad publicity that could (and did) occur.
I'll be pure engineer here - someone at Microsoft redid the formula, given the knowledge of failures that have happened since release. This time around, the math said that enough future sales would be lost to outweigh the cost of extending the warranty. It's really that simple. It's also interesting to note here that they didn't make it a lifetime warranty (20 years or something). They probably ran that formula too, and decided that the math tips the other way if you let it last forever.
So did they NEED to do this? If by need you mean "saving face", then no. Being the retrospective hero doesn't help anything, only in the sense that it might affect future sales.
The formulas used to calculate warranties are meant to cover manufacturing errors. Every once in a while, a defective unit will get past quality control in the factory due to human error. The warranty is designed to protect customers if they get one of these units.
The "Red Ring of Death" is likely from a design flaw, not a manufacturing error. A manufacturing error would not account for the abnormal failure rate. It is literally built into every unit that leaves the factory. The only long-term solution to a design flaw is a product recall.
Extending the warranty is just a temporary solution because Xbox 360s will continue get the "Red Ring of Death".