Defective Xbox 360s Cost Microsoft Over $1 Billion
While this number may be alarming, Microsoft’s response to the console’s defects has been refreshingly positive. Back in September of last year, they extended the 90-day warranty to a full year. They’ve just recently extended the full-year warranty to 3 years.
All this warranty coverage comes at a price, though. Microsoft is reporting that they’ll eat between $1.05 to $1.15 billion in repair and replacement costs. Chump change for the Redmond giant but still nothing to sneeze at.
All in all, this is a wise move on Microsoft’s part, considering that their target audience is made up of hard-core gamers who don’t look kindly upon shoddy hardware. It appears to be working, too, as 90 percent of Xbox 360 owners say that they’d recommend the console to a friend (according to Microsoft).
In the end, building a loyal fan base is what it’s all about for the console makers. Addressing manufacturing issues is in the best interests of their customers and a huge step in the right direction for Microsoft.
Microsoft’s Billion-Dollar Fix [BusinessWeek]