'This set of issues wasn't visible at all for the first year and more,' said Bach. Bach said only that there were 'several factors' that could trigger the error, and that 'this is not related to any safety issue.' He also claimed that the problems appeared in quantity only the past few months. Microsoft wouldn't specify the exact causes of the hardware failure. 'We are on track for profitability for both Xbox and entertainment overall,' he said. 'This will have no impact on outlook for fiscal year '08,' said Liddell. Using Liddell's figures, the average repair per console sold - Microsoft said today it had sold 11.6 million Xbox 360s, slightly under its end-of-fiscal-year goal of 12 million - will cost between $45 and $50. Some inventoried consoles might be junked if repairs prove too expensive. Liddell said the charge would be equally split between repairs of already-sold systems and fixes to those still in stock. To pay for the anticipated warranty repairs, as well as evaluate and fix machines still in inventory, Microsoft said it would take a $1.05 billion to $1.15 billion charge against earnings for the quarter that ended June 30. Customers who have already paid $139 and more for out-of-warranty repairs will be reimbursed. Under the new warranty, any Xbox 360 console that shows three flashing red lights - the error signal for the vague 'general hardware failure,' dubbed by some users as the 'red ring of death' - will be repaired free of charge for up to three years from its date of purchase, said Bach. 'Over the past couple of months, the number of repairs for the Xbox 360 console have been unacceptable to us.'

'But there's one area of the business where we're not doing a good enough job,' he said.

After touting the Xbox 360's success, Bach turned to the matter at hand. said today it was taking a $1 billion-plus charge against earnings to extend the warranty of all Xbox 360 consoles because of an 'unacceptable number of repairs' caused by design flaws in the video game machine.ĭuring a conference call with financial analysts and reporters, Robbie Bach, the head of Microsoft's entertainment division, and CFO Chris Liddell announced the warranty change and spelled out its financial impact.

Red light center xbox 360