They’re All Broken. Every Single One. (Updated)

Australian news outlet CRN is reporting that Microsoft has publicly admitted to a design flaw (see update below) present in every Xbox 360 on the market (emphasis theirs):

Software giant admits there are 11.6 million faulty consoles, which it will have to fix.

Microsoft has admitted that every one of the 11.6 million Xbox 360 consoles sold in the past 19 months suffers from a design flaw that could cause the device to fail.

The firm will extend the warranty coverage from one to three years to compensate consumers, but does not plan to instate a recall or exchange programme.

Microsoft gaming chief Robbie Bach claimed in a conference call with financial analysts that the design issues surfaced recently.

“In the past couple of months we started to see significant increases in repair requests and call requests and significant attention from people,” he said.

It really has come to this. They’re all broken. The console is a lemon.

I think its safe to say this has surpassed the infamous PS2 Disc Read error in magnitude.

UPDATE – Microsoft has contacted us with a statement. They infer that CRN jumped the gun. All I’ll say is, their language is extremely specific. I’ll let you read what was sent to me (after the jump); it contains a portion of the minutes of the conference call in question. There is no specific admission of what the CRN article said. It is framed as a “customer service issue”.

QUESTION:  Hi, guys, two questions.  One, did you contemplate at all a recall for some of the consoles that were out in the market?  And sort of roughly any idea what percentage of consoles that are on the shelves right now are potentially defective?  And then, Peter, your comment about capturing the core and then captivating the broad, how do you actually marry pricing and bundling strategy to go after those sort of two different segments?  And are you foreshadowing, you know, any special SKUs or things like that for the new markets?

ROBBIE BACH:  Let me –

PETER MOORE:  I’ll take the second question.

ROBBIE BACH:  Yeah, let me take the first question.  So, in terms of how we thought about the warranty announcement we made last week, you know, the vast majority of our customers are having a great experience with Xbox 360.  And because it’s a variety of factors that cause the three flashing red light indicator to come up, it’s very difficult to look at any one customer and say, “Hey, we know what’s going to happen with that particular box.”

And so our approach was, look, we have customers who are having a great time with their Xbox 360, the majority of them are never going to have this experience and never going to know about it, never going to want to think about it.  We should keep them continuing to play gaming and keep them going.  And then for customers who it does happen for, we should just take care of it and make sure they have a great experience.  And so the thought process focused very much on making sure we take care of the customers whose consoles, for whatever reason, aren’t performing the way they should.

So that’s really where we’ve been focused.  I think if you look at what’s happening at retail, as we said on the call last week, we’ve been cycling new inventory into the channel, we have things in place to improve the performance of the consoles that are in the marketplace today.  Some retailers will return some inventory to us, and we’re fine with that.  We’ll cycle that back over time as consoles with the right things inside.  It’s still possible that you can go into a retail store and end up with a console that has this problem.  It is really tough, given the breadth of distribution, for us to guarantee it doesn’t happen.

But if it does, you’re covered, and the three-year warranty is there, and you’re covered from three years from the time you purchase.  So we feel like that delivers a great customer experience.



2 responses to “They’re All Broken. Every Single One. (Updated)”

  1. Toooootally trumps the PS2 error. I don’t know how MS will avoid some sort of class-action suit. I guess they expect that in 3 years, you’ll just buy the Xbox 720 and throw out your old one.

  2. My friend and I have the same problem and we are stuggle with Microsoft help line to get this fix until we read XBox 360 - 3 light fix.

    It take me an hour and I managed to fix the 3 RED light Error with the details steps provided in the XBox 360 - 3 light fix manual. With this guide, I am helping few of my friends to get their problem fixed and each of us save $140 each for getting it repair by Microsoft!!

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