Microsoft admits hardware problems extends warranty to 3yrs

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Guns_LotsOfGuns

Moderator/Games Reviewer
Source: 1up

Microsoft announced today they are extending all Xbox 360 warranties to three years, a policy that not only applies to new consoles but retroactively, as well. If you've had to pay for Microsoft to repair the red ring issue in the past, they will pay you back. At 2:30 p.m. PST, Microsoft will hold a teleconference to announce this.
"As a result of what Microsoft views as an unacceptable number of repairs to Xbox 360 consoles, the company conducted extensive investigations into potential sources of general hardware failures," said the company in a statement. "Having identified a number of factors which can cause general hardware failures indicated by three red flashing lights on the console, Microsoft has made improvements to the console and is enhancing its Xbox 360 warranty policy for existing and new customers."

This comes just after 1UP's own story about a man who's gone through 12 different machines since purchasing an Xbox 360 near launch, reports overseas of companies refusing to repair the hardware because the load is so overwhelming and responses from the Forza Motorsport 2 team about users experiencing hardware failures while trying to play that game.

"The majority of Xbox 360 owners are having a great experience with their console and have from day one. But, this problem has caused frustration for some of our customers and for that, we sincerely apologize," said Robbie Bach, president of Microsoft's Entertainment & Devices Division. "We value our community tremendously and look at this as an investment in our customer base. We look forward to great things to come."

Microsoft says they'll be taking a "$1.05 billion to $1.15 billion pre-tax charge to earnings for the quarter ended June 30, 2007 for anticipated costs under its current and enhanced Xbox 360 policies."

Ouch.

Theres also a podcast interview with Peter Moore on Major Nelsons Site

According to the podcast this is a global policy :thumbsup:

Peter says it will take a few days to implement this around the world but they are on it!

Result id say...

EDIT: Interview with Peter Moore

1UP spoke with Peter Moore this afternoon about what this means for the Xbox platform going forward. Does this cover issues like disc scratching and dirty disc errors? Does Microsoft wish it had addressed this problem sooner? Why does Moore call this "tough day" at Microsoft for many people?

Read on and find out.

1UP: Not too long ago, in an interview with Mike Antonucci, you famously responded to question about the breaking 360s with "Ya know, things break." Do you regret saying that now?

Well, no, things do break, don't they? I think we just proved that. [audible pause] Hmm. I regret the way people took it, but my focus was, if you read the whole thing, people take that comment without context of that entire one and a half hour interview, but the focus is on customer service and stuff does break and we're clearly trying to rights some of the wrongs we've caused some of our consumers here over the past few months. Yeah, things break and we need to do a better job of fixing it, doing it quickly and not charging people for it.

1UP: Not too much later, Dean did another interview with Todd Holmdahl, your corporate VP of Gaming and Xbox Products Group. The quote everyone focused on there was gamers complaining are considered a "vocal minority." But, if they're a vocal minority, how does that result in such a far reaching change in warranty policy?

Well, it still is a minority of customers and clearly they're very vocal and they should be, because we haven't done right by them. Todd was right, it is a minority. The great majority of people are having a great time with their Xbox 360s -- you know that. We don't have 10 million broken Xbox 360s, but we haven't done a good job, in recent months in particular, of taking care of the people that have taken care of us, Patrick. We've made a pretty bold step today -- as you said, "ouch" -- that has some pretty far reaching consequences financially, but as a company think is the right thing to do, and we're going to take care of you whether you bought on one launch day or yesterday and protect you against those problems that are indicated by the three red rings on the console. I hope people focus on us doing the right thing, rather than whatever nefarious [tricks] they think we had up our sleeve.

1UP: The response has been positive so far. The response is that we're glad it happened, but why did it take so long?

It took so long because it's not an easy thing to do. It's a large financial hit, you make sure you do things right the first time and the only time and we don't come back two months later and do changes and take bigger financial hits and say we've got a different problem we never figured out -- things of that nature. So, you collect data. It's global, we're in 38, 40 countries selling this thing -- not just the US -- and we need to make sure we have global policies. We need to roll it out to all our customer service call centers around the globe, [and make sure] repair and refurbished centers are gonna be ready to accept whatever comes in. You can't do it overnight, Patrick, and hope people realize it's a large step we're taking, but with the consumers well being at the forefront of that decision.

1UP: What has it been about the last couple of months that's preempted this change?

It's the data, it's the ability to finally collect data to pinpoint where the problems are coming from. I don't know if you listened to Robbie's call, the financial call, he points out that a lot of these problems are problems that occur after field testing and field use. We've only been in market since November 2005 -- that's 18 months or so -- the ability for us to get a real handle on it, you want to make sure you only do this once, make sure you've captured all of the issues, make sure you've made all the right financial reserves to be able to take care of everybody on a global basis and it takes a little time. It's not something we thought about on Monday.

1UP: But this isn't the first time Microsoft has changed the warranty policy. What's different this time?

This is just focusing on what we now have the data to do and make sure we're taking care of people. You never say never, but the ability is for us to look at the data we have captured and put a cost number against it and our goal is to take care of you.

1UP: Was there a tipping point? In the last couple of weeks in particular, there's that Micro Mart company, that I realize isn't an official Microsoft repair center, but is this a response to that? Even 1UP ran our story about a guy...

Right.

1UP: ...who was treated very well, but the point of the story was that it was still 11 [broken 360s]. On its face, it seems like a response to all that chatter.

No, no, this is data. Believe me, this is not something we figured we needed to do this week or last week. This is something a lot of people have been working on it, a lot of people have been examining the data and it's very important you do this properly and you capture all the costs. Because some poor guy, and I, of course, read the story and felt very bad, had multiple consoles go out, but that wasn't the tipping point that made us do this. This is the collection of numerous points of data on a global basis and bringing all that together and making sure we did the right thing.

1UP: In your open letter, you said that "certain improvements" have been made to the console. Can you elaborate on that?

Not really, I'm not the technical guy. As has always happened in our business, you're constantly improving your console as you learn things about what goes right and what goes wrong in the field. In our case, over 10 million now in people's hands, you get data, you get feedback, and you're constantly improving both to increase its reliability and bring costs out of the console, so eventually you can pass down some cost savings to the consumer. I'm not the technical guy and I can't comment on that.

1UP: If the improvements have been made, does that mean the new ones being rolled out...this is typically affecting launch machines, does that mean the new consoles on shelves have these changes?

I can't speak in the 40 countries in what could be hundreds of thousands of retailers, whether they...

1UP: Let's talk about just the US, then.

Sure, don't know. Here's what you should worry about: if you get one today and you have a problem tonight or you have a problem two and a half years from now, we're gonna take care of you. I can't speak of every console on the United States' shelves.

1UP: But, eventually, by year end?

The eventuality is that every day, as we're making consoles, we're learning more about them, we're improving it, as I'm sure Sony and Nintendo are doing.

1UP: The cynical response to this is, does this insinuate Microsoft expects the systems to fail, so they're covering themselves?

No, no. I mean, you have to cover yourself, we're not expecting things to fail, but, again, from a financial point of view, you have to look at scenarios and say we need to make sure we're taking care of customers should things happen and that has a cost to it. We're trying to do the right thing. Cynics will try and poke holes in this, I understand that, that's their prerogative. It's a tough day here in Redmond for a lot of people, and people should be aware of that, but it's been tougher for a lot of people who've had problems with the box and we need to take care of them.

1UP: Tough in what way? Financially, or needing to "man up" to take care of this problem?

No, tough from a moral point of view, tough financially, of course. We've got a lot of very passionate people up here, you know many of them, Patrick, people who work on this thing. It's not easy to reads the headlines. I take that very seriously, but at the same time, the feedback I'm getting from my open letter is that I'm glad we're doing the right thing for people, as difficult as it is to read about this stuff.

1UP: For the longest time, as media outlets have been chasing this story, it's felt like the idea was being dismissed or danced around and now it's responding well because people are happy something's being said.

Right. And that's fine. And I want to apologize for anybody, no matter where they are in the world, that has had this problem and we haven't done right by them. We're gonna do right by them.

1UP: I want to be specific. This only covers the red ring issue.

That's correct.

1UP: Personally, last week, the issue I ran into was my machine stopped playing some discs, but will play some others. This won't be covered under that, correct?

It's the red ring, which is a general hardware failure. You've got a one-year warranty, depending on when you got your box...

1UP: Mine was a launch one.

This is focused on a specific issue that we feel we haven't done a great job working with the consumer and that's what the focus is, yes.

1UP: The people who already purchased an extended warranty, what does this mean for them?

I don't know about that. A lot of the extended warranties are retailer-oriented, so our point of view is that if you bought a box, you have a three year warranty effective today. We need to be able to take care of people who have paid us for repairs that have been out of warranty against this problem, so we're going to busily start sending checks out to those people again.

1UP: Now that these are being fixed in the original machines, are we going to see a tweaked box? There's a lot of talk of switching to a 65nm chip. Is this indicative of a change?

We'll fix problems, we'll improve the box. Clearly, we don't intend this to be a go-forward for the entire life cycle situation, we're constantly improving the box both from a quality point of view and a cost point of view, and that's important at both levels, and obviously we expect our quality to improve. In the short term, we have done a good job with a set of consumers that have the three flashing red light program and we're doing that immediately.

1UP: Do you anticipate this affecting the gaming division achieving profitability in the next fiscal year?

No. We're very focused on delivering profitability in fiscal 08 and we will deliver profitability.

1UP: Were retailers notified beforehand about this policy change?

For the great majority of people, because of the FCC requirements of not giving people heads up because of insider trading rules, the great majority of folks...now, of course, we have called all our retailers and all of our 3rd party partners this afternoon, we've had a roll out of how we've imparted this information for people we care about. The fact that I'm speaking to you, I've spoken with a number of people and will continue to speak to people throughout the afternoon, answering their questions. The impact on those folks, I don't know, but they're simply going to have to be understand what needs to be done like the rest of us here.

1UP: Thanks, Peter. See you at E3.
 

Jambs

Active Member
Wow, does this mean we have grounds to return faulty 3 red lighters to retailers for 3 years too?

http://www.xbox.com/en-US/support/petermooreletter.htm

Open Letter From Peter Moore

To our Xbox Community:

You’ve spoken, and we’ve heard you. Good service and a good customer experience are areas of the business that we care deeply about. And frankly, we’ve not been doing a good enough job.

Some of you have expressed frustration with the customer experiences you have had with Xbox 360; frustration with having to return your console for service after receiving the general hardware error message on the console.

The majority of customers who own Xbox 360 consoles have had a terrific experience from their first day, and continue to, day in and day out. But when anyone questions the reliability of our product, or our commitment to our customers, it’s something I take very seriously.

We have been following this issue closely, and with on-going testing have identified several factors that can cause a general hardware failure indicated by three flashing red lights on the console. To address this issue, and as part of our ongoing work, we have already made certain improvements to the console.

We are also implementing some important policy changes intended to keep you in the game, worry-free.

As of today, all Xbox 360 consoles are covered by an enhanced warranty program to address specifically the general hardware failures indicated by the three flashing red lights on the console. This applies to new and previously-sold consoles. While we will still have a general one year console warranty (two years in some countries), we are announcing today a three-year warranty that covers any console that displays a three flashing red lights error message. If a customer has an issue indicated by the three flashing red lights, Microsoft will repair the console free of charge -- including shipping -- for three years from the console’s purchase date. We will also retroactively reimburse any of you who paid for repairs related to problems indicated by this error message in the past. In doing so, Microsoft stands behind its products and takes responsibility to ensure that every Xbox 360 console owner continues to have a fantastic gaming experience.

If we have let any of you down in the experience you have had with your Xbox 360, we sincerely apologize. We are taking responsibility and are making these changes to ensure that every Xbox 360 owner continues to have a great experience.

This will take a few days to roll out globally, and I appreciate your continued patience as we launch this program. I’ve posted an FAQ that should address some additional questions, and we’ll update it over the next few days.

I want to thank you, on behalf of all us at Microsoft, for your loyalty.
 

funcky

Active Member
About damn time, it does'nt make me feel any better about whether my 360 will fail or not, but at least I know its covered for an extra 2 years. So it looks like I wont have to pay for that MS extended 2 year warranty, though I wonder what will happen to people that have already paid for it. It says they are refunding everyone that has paid for repairs since launch, ouch!
 

smokedog

Well-known Member
If a customer has an issue indicated by the three flashing red lights, Microsoft will repair the console free of charge -- including shipping -- for three years from the console's purchase date. We will also retroactively reimburse any of you who paid for repairs related to problems indicated by this error message in the past.
Good news for every 360 owner, but they still need to fix the problem.

Now if they make a quieter 360 as well.
 

JamesOD

Active Member
Great news

"Wow, does this mean we have grounds to return faulty 3 red lighters to retailers for 3 years too?"

No it means microsoft will take care of 3 red light repairs after the first year
free of charge.

This is something they are doing themselves and has nothing to do with the retailer
 

Guns_LotsOfGuns

Moderator/Games Reviewer

DragonOfSilver

Active Member
Its only extending it for three red lights, not for other failures like dvd drive it seems, so no effect on extended warranty or refunds there, I would assume.
 

Zzebedee

Well-known Member
that's a weight off a lot of people's minds now :smashin:

a lot of people who've had the lights of doom out of warranty and sold on their xboxes for spare parts on ebay will be gutted though
 
F

Fantasticlees

Guest
wow thats brilliant, well done microsoft. only wish it was for all hardware failure faults not just the 3 red lights.
 

Krill

Well-known Member
So what does this exactly mean for people who bought the 2 year extended warranty?

Does that mean in a sense we have 5 years now (3 years that Peter Moore talks about plus the 2 years from extended warranty?)
 

Munkey Boy

Distinguished Member
Wow, does this mean we have grounds to return faulty 3 red lighters to retailers for 3 years too?
Yep, this is MS admitting an inherent fault. Contractually, the retailer is responsible for supplying you with goods that aren't faulty.

That said, the retailer is within their rights to then send your console to MS to be repaired, so to be honest why not just send it to them anyway? You aren't entitled to ask for an on-the-spot exchange after 6 months.

So what does this exactly mean for people who bought the 2 year extended warranty?

Does that mean in a sense we have 5 years now (3 years that Peter Moore talks about plus the 2 years from extended warranty?)
No, I expect not. You could get a refund for your warranty extension though I'd guess. I am only guessing though, I'm sure MS will let us know soon enough.
 

funcky

Active Member
So what does this exactly mean for people who bought the 2 year extended warranty?

Does that mean in a sense we have 5 years now (3 years that Peter Moore talks about plus the 2 years from extended warranty?)

Thats the thing, their extended warrenty seems to only cover problems relating to the red lights, so people that have paid will probably get the full service. So I may still pay for that extended warrenty for more peace of mind as a large percentage of failures do not just result in the red lights. Oh well at least what they have done so far is better than nothing, and b!tching on the internet has worked.
 

Guns_LotsOfGuns

Moderator/Games Reviewer
Oh well at least what they have done so far is better than nothing, and b!tching on the internet has worked.

Indeed for a while now it seems that MS have been the big corporation with thier backs turned whilst counting thier money and laughing, i can honestly say i never thought they would man up and say "we screwed up".

Fair play reimbursing all those repair fees and probably a few warranties too! Worldwide thats got to be alot of people! Id like to see those numbers :eek:
 

dodger747

Well-known Member
Wow!!!

A good pr move by Microsoft albeit a bit late. However, at least they have addressed the problem...:thumbsup:
 

jonnydynamite

Active Member
I wonder if I will get refunded for the repair cost of my console. It had the graphical freezing error and also the 3 red lights on 2 occasions. They seem linked so fingeres crossed. Will take it up with MS once they return the damn thing.
 

danwalton

Member
MS gets a lot of bad press, but I am very impressed by this. Totally unexpected. Well done, Microsoft :thumbsup:
 

avolee

Well-known Member
Wow!!!

A good pr move by Microsoft albeit a bit late. However, at least they have addressed the problem...:thumbsup:

Unfortunately, the other side of the coin means they are also admiting there is an inherent fault with the design and that may also put off more people than it wins over.
 

Munkey Boy

Distinguished Member
Unfortunately, the other side of the coin means they are also admiting there is an inherent fault with the design and that may also put off more people than it wins over.
I would guess that wouldn't be the case in the long run - hardware modifications and the knowledge that even if it does go kaput you're covered would be a good move. I think the word was already out that the machine wasn't completely reliable to be honest!
 
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