Xbox Repairs Could Affect Next-Gen Disc War

July 11, 2007
Microsoft has acknowledged that potentially any of its estimated 11.6 million Xbox 360 consoles already sold could be susceptible to faulty hardware and thus fail, according to comments made in a conference call with financial analysts reported this week by CRN, an Australian tech Web site.

Microsoft has already said it was finding hardware problems with more of its gaming consoles than it had predicted. The company promises to make good on doing all it can to correct the design flaw (including free repair and shipping costs, where applicable) which has caused an unknown number of the units to fail in recent weeks.

The company has extended the one-year warranties to three years. However, at presstime this week, no major recalls, per se, were pending. Microsoft is estimating its overall repair bill could exceed $1 billion. Microsoft exec Robbie Bach said his firm began seeing a significantly higher number of consumer complaints about the Xbox units starting a couple of months ago. He said the problem, which he did not specify, would be corrected for all current and future Xbox sales.

While the Xbox 360 does not have an internal HD DVD drive, it does sell an external unit. Game competitor Sony provides an internal Blu-ray Disc drive in every PlayStation 3 it sells. So Xbox’s hardware woes, plus a sudden price cut for PS3 just announced, could act in tandem to provide a positive effect on sales of PS3, which has been under-performing since first introduced.

A hardware failure in the Xbox 360 to be covered by the now-extended warranty is typically denoted by three flashing red lights on the console. Owners of affected consoles are entitled to free repair and shipping costs from Microsoft, said CRN.

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