Xbox repairs cost Microsoft $1B

[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.