Xbox repairs cost Microsoft $1B

[aaronwt]

Originally Posted by Maxpower1987

Expect class-action suits, same as what Sony had with the PS2 laser problems they kept denying for God knows how long.

Why would there be a class action suit? MS has extended that warranty and they honor the warranty. There is nothing to to sue over if MS honors their warranty. Any problems would be fixed. Hence the 1 Billion to cover future repairs with the 3 year warranty. That's a heck of a warranty.

[partridge]

http://www.theregister.co.uk/2007/07..._death_charge/

"Some 30 per cent of Xbox 360's are estimated to overheat heat and fail"

[RUR]

Unsurprisingly, AVS instantly closed Mozart's thread on this subject even though roughly half of all extant HD DVD players are affected.

[bluflu]

Hmmm... a 1 billion dollar loss divided by 12 million Xbox units sold equals about an $80 loss for Microsoft on every Xbox sold.

[Maximus]

Originally Posted by aaronwt

Why would there be a class action suit? MS has extended that warranty and they honor the warranty. There is nothing to to sue over if MS honors their warranty. Any problems would be fixed. Hence the 1 Billion to cover future repairs with the 3 year warranty. That's a heck of a warranty.

Because they have knowingly sold a substandard product, warranty or not.

[sc7]

Originally Posted by dialog_gvf

The games are lacking, but the question would be how were they on the Xbox 360 LAST July?

There was Oblivion, GRAW, and a crappy port of Quake 4. I know, I had it back then. The PS3 selection now is FAR better than 360 back then, now just wait for PS3's first full November.

[Shin-Ra]

Originally Posted by Maxpower1987

Because they have knowingly sold a substandard product, warranty or not.

Exactly, plus it's not just a case of "oh my 360 died *dingdong* oh look there's a courier at the door with a replacement console for me, how convenient!"

It's a serious pain in the arse phoning up MS support, getting them to accept that the failure wasn't caused by you - e.g. reorientating the console while switched on (YES - they tried that one with me ) waiting for the box or printing a label to stick on your OWN box if you live in the UK, phoning them up again when the label e-mail doesn't arrive, realise they didn't take your details down properly so you have to give them again.. it goes on and on and will be worse with all the extra returns they're going to be dealing with now that more people are within the warranty period.

[WriteSimply]

Originally Posted by What'sHD

10M of them left MS and now all 10M are heading back. No wonder its called 360.

Coincidence, I think not.

Funny. And to think the X-Box fanboys were calling the next one the 720. Wonder what THAT means.


fuad

[partridge]

And on top of that they missed their 360 sales target by nearly half a million. Oh dear, is that the sound of a bubble bursting..?

[aaronwt]

Originally Posted by Shin-Ra

Exactly, plus it's not just a case of "oh my 360 died *dingdong* oh look there's a courier at the door with a replacement console for me, how convenient!"

It's a serious pain in the arse phoning up MS support, getting them to accept that the failure wasn't caused by you - e.g. reorientating the console while switched on (YES - they tried that one with me ) waiting for the box or printing a label to stick on your OWN box if you live in the UK, phoning them up again when the label e-mail doesn't arrive, realise they didn't take your details down properly so you have to give them again.. it goes on and on and will be worse with all the extra returns they're going to be dealing with now that more people are within the warranty period.

The one problem I had showed a very responsive MS. The box replaced very quickly. And my extended warranty was extended. Although this was December 2005.
When I called MS the other day to get the extended warranty on my Elite, I had no problem getting connected to someone.

[buckshot]

man, I thought ''how has no one else seen this'' so I search 3 times and post it, only to find ta da....I suck. I must now hang my head in shame for this newb mistake. especially after my ''thread titles I never want to see again'' rant.

I suck.

[Deciazulado]

But you're not a 360

[ps3andlovinit]

Originally Posted by aaronwt

Why would there be a class action suit? MS has extended that warranty and they honor the warranty. There is nothing to to sue over if MS honors their warranty. Any problems would be fixed. Hence the 1 Billion to cover future repairs with the 3 year warranty. That's a heck of a warranty.

Maybe one heck of a warranty but it's also an acknowledgement of a big problem IMO. Who wants the hassle. Especially given the multiple failures.

One aspect is they are only covering RROD..and there are other problems like the drive read problems etc. Maybe more. So it's not gone but this action certainly reduces the chances of happening around the RROD.

I'd would say this was an effort to minimize the fallout /possibilities of a class-action suit. I'd imagine there was behind the scenes pressure from watchdog/gov't groups for a total recall ..again this was a pre-emptive/back to the wall response to avoid that.

Now here is another part to the story...

They already increased the warranty once..acknowledging a problem. I thought around that time MS exec(s?) said the failures were within accepted industry standards. IF there is evidence that a high failure rate was know or suspected when they made public statements to the contrary..it's more likely a suit/charges will come from the SEC or shareholders for misleading investors than a class-action suit. The extended warranty will minimize the likely hood of a successful class-action suit for the RROD..but does nothing to shield people from the SEC etc.

Representatives of PUBLIC COMPANIES have to be very careful about the information they reveal or they can go to jail for manipulating the markets. Much worse for individuals than a class-action lawsuit. Given the losses and potential hit on shares..shareholders would have different reasons for filing than the SEC..the SEC would see gains or losses as equal reasons to lay charges.

[partridge]

Weren't MS supposed to be turning a profit on the Xbox project for the first time this year? Does this affect that?

Lots of people think MS are invincible because of their wealth, but they have shareholders to answer to. So what with this and the apparent failure of the Zune, MS are looking a little uncomfortable right now.

I honestly believe that as we move into the second half of this year and into 2008 the 360 sales will begin to drop as PS3's increase. Just look at what PS3 has coming later this year, not just games but on blu-ray movie too. Spiderman3 has just been given a date for October and I've pre-ordered it already.

Supposedly MS has shifted just 150,000 HD-DVD add on drives in the States, that's compared to the 5 million consoles sold - not much of an attachment rate.

[RUR]

Originally Posted by buckshot

man, I thought ''how has no one else seen this'' so I search 3 times and post it, only to find ta da....I suck. I must now hang my head in shame for this newb mistake. especially after my ''thread titles I never want to see again'' rant.

I searched four times

[dialog_gvf]

Originally Posted by RUR

Unsurprisingly, AVS instantly closed Mozart's thread on this subject even though roughly half of all extant HD DVD players are affected.

Interesting point.

And Microsoft was bragging before the add-on was released that AVC (Weinstein Co. and recent Paramount titles) on the Xbox 360 was one of the most intensive uses of the hardware.

Gary

[MasterXeus]

Well that's what Microsoft gets trying rush out a system, although I give them credit for fixing the problems at no charge.

[reiella]

It's for them to extend the warranty. However, it seriously dours my already poor outlook towards MS consoles now. The 360 was pushed out to beat Sony and Nintendo to the market. A fair number of mistakes that would be caught through letting the development process mature more like a gaming console...

It's part of the apparant decision Microsoft has for reducing the lifespan of gaming consoles to approach that of the PC high end gaming network. Where ya get to upgrade your system every 2 years or so to remain close to the edge [or every 3 monthes to keep on the bleeding edge]. And part of my dread in general with Microsoft in the console market. PC design priorities for a console product.

[RUR]

Originally Posted by ps3andlovinit

They already increased the warranty once..acknowledging a problem. I thought around that time MS exec(s?) said the failures were within accepted industry standards. IF there is evidence that a high failure rate was know or suspected when they made public statements to the contrary..it's more likely a suit/charges will come from the SEC or shareholders for misleading investors than a class-action suit. The extended warranty will minimize the likely hood of a successful class-action suit for the RROD..but does nothing to shield people from the SEC etc.

Representatives of PUBLIC COMPANIES have to be very careful about the information they reveal or they can go to jail for manipulating the markets. Much worse for individuals than a class-action lawsuit. Given the losses and potential hit on shares..shareholders would have different reasons for filing than the SEC..the SEC would see gains or losses as equal reasons to lay charges.

To the extent that MS has learned that repair costs will exceed earlier forecasts, resulting in an impact to the financial forecasts, Sarbanes Oxley comes into play. SOx is the 2002 law consequent to the Tyco, WorldCom etc scandals and essentially requires certain corporate officers to sign-off on the financials. If they knowingly misstate those financials, there are rather severe corporate and personal penalties.

[Maximus]

Originally Posted by partridge

Weren't MS supposed to be turning a profit on the Xbox project for the first time this year? Does this affect that?

Lots of people think MS are invincible because of their wealth, but they have shareholders to answer to. So what with this and the apparent failure of the Zune, MS are looking a little uncomfortable right now.

I honestly believe that as we move into the second half of this year and into 2008 the 360 sales will begin to drop as PS3's increase. Just look at what PS3 has coming later this year, not just games but on blu-ray movie too. Spiderman3 has just been given a date for October and I've pre-ordered it already.

Supposedly MS has shifted just 150,000 HD-DVD add on drives in the States, that's compared to the 5 million consoles sold - not much of an attachment rate.

Well MS have said they hope to turn a profit in the final quarter of their financial year (the very same quarter that Halo comes out) and that the entertainment division will turn a profit in fiscal 2008. The $1bn charge will hit during fiscal 2007, so they might not make the first target anymore, but they could make the second one depending on how well Sony do at cost-cutting on the PS3.