SEATTLE - In another setback for Microsoft Corp.'s unprofitable entertainment and devices division, the company says it is planning to spend at least $1 billion to repair serious problems with its Xbox 360 video game console. Microsoft declined to detail the problems that have caused an onslaught of "general hardware failures" in recent months but said Thursday it will extend the warranty on the consoles to three years. "We don't think we've been getting the job done," said Robbie Bach, president of Microsoft's entertainment and devices division, which also makes the Zune digital music player, a distant competitor to Apple Inc.'s powerhouse iPod. "In the past few months, we have been having to make Xbox 360 console repairs at a rate too high for our liking." Bach said the company made some manufacturing and production changes that he expects will reduce Xbox 360 hardware lockups, but he declined to identify the problems or say which others might remain. Microsoft said it will record a charge of up to $1.15 billion for its fourth fiscal quarter, which ended June 30, to cover the additional costs associated with the warranty extension. The news comes just days before the video game industry descends on Santa Monica, Calif., for its annual E3 conference, and it could overshadow Microsoft's plans to build buzz for holiday season video game releases and "Halo 3," a much-anticipated shoot-'em-up for the Xbox 360 set to launch in September. Microsoft has written down larger amounts in the past — more than $10 billion in the late 1990s related to investments in telecommunications companies, and more than $5 billion related to antitrust issues — but a $1 billion write-down for one division in one quarter is significant.
If they're announcing this now then i'm guessing they have a lot of big things lined up at E3 which they hope will take the focus off this negativity. Personally i'm just thankful that in over a year I haven't had any problems with my 360... *touch wood*
thats why you always wait to buy new consoles until they work the bugs out. Although, they should have been worked out by now.
Within this past 3 months I have sent my XBox 360 for repair for about 5-7 times. I am not careless , just most times it crashes because of the games or heat, if you guys heard that G Hero 2 messed up tons of Xbox 360s.. well it messed up mine and then just recently my xbox 360 got ring of death because of that new game Forza 2. I really am starting to hate xbox 360 lol
Dreads that's awful, I feel for you! I have been lucky and have had my 360 since the first day and so far there have been no problems (touch wood too!) I have heard about all of the bad Xboxs. There are way too many problems with the 360 but I'm glad that Microsoft is stepping up to support the owners and get their consoles fixed. This is a strong sign that Microsoft wants to be a long-term player in the console business.
No real problems apart from the games freeze from time to time and all of a sudden through the console decides it cannot read the disc. Not often but is a pain and never happened with the original console. Still better than the spectrum, loading 'Jet Set Willy' for 25 mins only for it to crash in the last 20 seconds of loading.
This is a costly mistake. For a company that hires only the "best" and "brightest" this sort of a bill for repairs is no-excuses. They should have worked all of the bugs out and spent more time with it. Rushing to put out a game system at the same time as a competitor or to get it out before a holiday is not the best long-term idea. Here is the proof
I've had a Xbox 360 since it came out and have had no problems with it. Not all first gens are buggy, and when there are, sometimes other factors involved.
Mine runs good,but tiger woods 07 hangs up sometimes trying to enter the tiger challenge and i have to resart it
If only they were raised in good homes where people loved and cared for them. Maybe then they wouldn't have wound up a statistic and marked with a red ring of death
This is a good move for Microsoft. They want to build up trust with gamers and seem to be doing a good job. They may lose money with the 360, and they probably expect to. Their goal is to have a good bit of trust built up for when they release their next console, which they will probably make money with. Microsoft is just using the Xbox 360 as the foundation for its console business, which they hope will last for many, many years.
My brother's 360 broke about a month ago. It was 13 months after purchasing the machine. Would microsoft fix this problem for free now?
As far as i'm aware, all 3 major consoles sell at a loss; and this is something thats been happening since the last generation - money is made on peripherals and games. In my opinion, this move isn't about preparing for their next console - its about ensuring longevity for their current one. As it stands, they have all of their bases covered against the competition... their 1 year head-start means its going to take a while before PS3 can match its game portfolio... their snagging of top titles such as DMC and GTA takes Sonys edge away; and their online gaming is unparalleled... the only black mark against the 360 is its history of technical problems. Right now, if you were to ask someone why they may choose a PS3 over a 360, a lot of the time the reason will be the tech problems - if Microsoft not only eliminate this but also restrospectively commit themselves to solving issues of existing owners, then this "obstruction" will be out of the way when it comes to buyers making their decision over which console to choose.