Xbox Warranty To Cost $1 Billion, Customer Good Will

An anonymous reader writes "The Financial Times reports that Microsoft will take a charge against profits of more than $1bn as it tries to limit the potential damage to its videogames business from a design flaw in the Xbox 360 games console leading to units failing." It's bigger even than that, though. Early this week the news was about Xbox Live's growth, but since yesterday the headlines have taken a turn. Peter Moore has admitted the company is shy of their goal, some 400,000 units short of the 12 million Xboxes they'd planned to ship. These facts combined have made for some grim questions, including the San Jose Merc's Nooch asking why you'd want to buy an Xbox in the first place.

Comments

Re:Costing customer good will?

[HarvardAce]

MS may be late to acknowledge the issue - no later than I'd expect any major corp to be, but late regardless - but if retroactively extending the 90-day warranty to three years isn't a move to earn customer good will, I don't know what they could do that would. I wholeheartedly agree. I experienced the dreaded 3 red rings just over a year after I had bought my console (I got it the first week it was released). At the time it broke, the warranty was only 3 months on it. They then extended it to one year shortly after that, but I was still out of luck because it was over one year. I was not thrilled with shelling out $140 to get it repaired (and $20 to ship it to them only to find out that the day after I shipped it they were now paying for shipping both ways as part of the $140...argh), but it was cheaper than any of my other options. Now they are going to refund the $140 I paid, and I am very happy for it. I'm not sure how that would cost customer good will -- if anything it shows me that Microsoft will stand behind its products, which is much more than I could say for Sony who wanted $200 to repair the PS2 with disc read errors (when the thing cost $250 new in the store).

Re:nope

[dabraun]

What that means is that all Xbox 360's are at risk. It doesn't matter when you got yours; it has RROD potential today, tomorrow, and every day after that. That's the case because all 360's are designed the same way - there hasn't yet been a significant change.

I am curious to see what the 360's made after this announcement look like, side by side with a pre-announcement system. If there is no change, then I think it's safe to say the flaw still exists - and I sure wouldn't buy such a system. If there *is* a change, though, then I think we'll have a clearer idea of what the flaw was... but it'll still take time to know whether or not the fix was effective.

Either way, I'd put off buying a system for at least six months at this point. Let the old units work their way through the system, wait for the new units to prove themselves.

No one seems to be connecting the dots between this and the articles a month or two back saying that returned 360s were coming back with very different heat sinks inside them. There were some even bigger problems with the 360s sold right around launch - my guess is that MS thought they had already fixed the problem and it took them a while to realize they really didn't. So perhaps a few months ago they acted on this, came up with a fix, started applying the fix to units they repaired (and perhaps new units) and once they were satisfied they had fixed the issue they announced this - knowing that the size of the hit is limited to some percentage of 360s already out there and that new units (and repaired units) are not going to have this high failure rate.