Xbox Financial Side of Failures

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scottvamp
scottvamp Posts: 3,277
edited July 2007 in Video Games
Just an interesting read for gamers and financial guru's.


Xbox 360 repairs will cost Microsoft $1B By JESSICA MINTZ, AP Business Writer
Sat Jul 7, 5:27 AM ET

SEATTLE - In another setback for Microsoft Corp.'s unprofitable entertainment and devices division, the company says it is planning to spend at least $1 billion to repair serious problems with its Xbox 360 video game console.

Microsoft declined to detail the problems that have caused an onslaught of "general hardware failures" in recent months but said Thursday it will extend the warranty on the consoles to three years.

The glitches, and the bad publicity, could weigh the company down as it claws for market share in the highly competitive console market.

"Bach said the company made some manufacturing and production changes that he expects will reduce Xbox 360 hardware lockups, but he declined to identify the problems or say which others might remain. Microsoft said it will record a charge of up to $1.15 billion for its fourth fiscal quarter, which ended June 30, to cover the additional costs associated with the warranty extension.

The news comes just days before the video game industry descends on Santa Monica, Calif., for its annual E3 conference, and it could overshadow Microsoft's plans to build buzz for holiday season video game releases and "Halo 3," a much-anticipated shoot-'em-up for the Xbox 360 set to launch in September.

The software maker also said Thursday that sales of the game console fell short of expectations for the fiscal year that just ended.

Matt Rosoff, an analyst at the independent research group Directions on Microsoft, estimates that Microsoft's entertainment and devices division has lost more than $6 billion since 2002.

Microsoft has written down larger amounts in the past — more than $10 billion in the late 1990s related to investments in telecommunications companies, and more than $5 billion related to antitrust issues — but a $1 billion write-down for one division in one quarter is significant.

"It suggests the problem is pretty widespread," Rosoff said.

Microsoft will pay for shipping and repairs for three years, worldwide, for consoles that experience hardware failure, which is usually indicated by three flashing red lights on the front of the console, something gamers sometimes refer to as "the red ring of death."

This isn't the first time Microsoft has made changes to the Xbox 360 repair plan. Last December, the company extended the warranty from 90 days to one year for U.S. customers. In Europe, the warranty previously expired after two years.

Microsoft also will reimburse the "small number" of Xbox 360 owners who have paid for shipping and repairs on out-of-warranty consoles, Bach said.

In June, bloggers speculated that the Xbox 360 return problem was getting so severe that the company was running out of "coffins," or special return-shipping boxes Microsoft provides to gamers with dead consoles. "We'll make sure we have plenty of boxes to go back and forth," Bach said in an interview.

Microsoft's entertainment and devices division reported an operating loss of $315 million on $929 million in sales for the three-month period that ended in March. Microsoft has said it expects the division to post a profit in fiscal 2008.

Microsoft announced the warranty extension after markets closed Thursday. Microsoft shares fell 11 cents to $29.88 in extended trading after falling 3 cents to $29.99 in the regular session.
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  • PolkThug
    PolkThug Posts: 7,532
    edited July 2007
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    3 year warranty! I'm happy now.
    Never Forget
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  • Shizelbs
    Shizelbs Posts: 7,433
    edited July 2007
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    They'll be fine.
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  • engtaz
    engtaz Posts: 7,652
    edited July 2007
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    Better then Sony is after the laptop battery failures and I hear the blueray drives are failing. I wish they would increase their games counts on the PS3.
    engtaz

    I love how music can brighten up a bad day.
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  • fatchowmein
    fatchowmein Posts: 2,637
    edited July 2007
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    If MS on their next 360 update would...

    1. Allow VOB streaming.
    2. Menu/FF/RW support for the above.
    3. Playback all video and audio format without having to transcode.
    4. Fix/improve reliability.
    5. Install a better DVD player.

    The 360 would become the media center hub that MS had originally promised instead of the crippled, defective Frankenstein of a box they've sold us. Families would be able to use a backend media center pc and buy multiple 360's @ $299 for video and audio playback.

    Ok. I'm dreaming and the hardware improvements would bump the price of the low end 360 upto $399 or $499.

    Still dreaming though...
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  • scottvamp
    scottvamp Posts: 3,277
    edited July 2007
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    » Failure Rate Sony PS3 Less Than 1pct Article posted by XanTium | 5-7-2007 11:16 | Permalink | Digg News » Comment article

    From ripten.com:
    Retailers estimate that one in every three Microsoft Xbox 360's sold fails leaving frustrated owners staring at the red ring of death, or worst a black screen that reads "disc unreadable". When compared to other systems, former EB games associate Matthiew G said...
    "Failure rates for all other consoles were not high enough for EB to consider revising their policies. Most other console systems have a failure rate of less than one percent, including the PlayStation 3."

    Full Story: ripten.com | dailytech.com

    ***************************************************************************
    » GameDaily: PS3 499usd on July 12 Article posted by XanTium | 5-7-2007 22:54 | Permalink | Digg News » Comment article

    From gamedaily.com:
    Although Sony has yet to confirm a price drop officially, GameDaily BIZ has received confirmation from the retail sector that the PS3 will be dropped to $499 next week. Sony itself recently talked about "refining" the PS3 price. Now it appears to be happening.

    A PS3 price cut rumor spread like wildfire across the Internet this afternoon when several sites spotted a new advertisement from Circuit City. The ad as seen on Kotaku lists the PS3 console at $499.99, $100 less than its current price.

    As it turns out, a merchandising manager (who wished to remain anonymous) at one of the world's biggest retailers has confirmed to GameDaily BIZ that the price drop is indeed retail-wide and it's scheduled to take place on July 12, although the first wave of ads to promote the PS3's new price won't kick in until Sunday, July 15.

    Full Story: gamedaily.com | kotaku.com
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  • Demiurge
    Demiurge Posts: 10,874
    edited July 2007
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    scottvamp wrote: »
    I have never bashed XBox. (The red lights of death and CS speak for themselves.) I have defended the PS3. Blu-ray was suppose to never get off the ground and the PS3 was not going to break 1 million units.
    Wrong. I use my PS3 for HT video and have been enjoying the hell out of the Wii. You have just been totally out of line. Like i said, i have had you ignored for awhile now. And now you talking **** about me for no reason. Stay off the "Sony" "Blu-Ray" topics. I have no beef except for you being a A$$hole.
    Check youself.................:confused:


    Get a life.
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  • scottvamp
    scottvamp Posts: 3,277
    edited July 2007
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    Demiurge wrote: »
    Get a life.
    Wow, i guess i would have to say the same to you, as you always go out of your way for me. You know your have been on my ignore list, YET..........

    Ya, no bashing, like i said. Just facts about news and warranty. Your a really strange cookie man.
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  • Refefer
    Refefer Posts: 1,280
    edited July 2007
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    I'm confused.
    Lovin that music year after year.

    Main 2 Channel System

    Polk SDA-1B,
    Promitheus Audio TVC SE,
    Rotel RB-980BX,
    OPPO DV-970HD,
    Lite Audio DAC AH,
    IXOS XHA305 Interconnects

    Computer Rig

    Polk SDA CRS+,
    Creek Audio 5350 SE,
    Morrow Audio MA1 Interconnect,
    HRT Music Streamer II
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  • Sherardp
    Sherardp Posts: 8,038
    edited July 2007
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    where did all of this beef come from and why? MS certainly does need to get it together with the 360, had my new one for awhile but who in the heck can afford to keep replacing those addictive things.
    Shoot the jumper.....................BALLIN.............!!!!!

    Home Theater Pics in the Showcase :cool:

    http://www.polkaudio.com/forums/showcase/view.php?userid=73580
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  • Shizelbs
    Shizelbs Posts: 7,433
    edited July 2007
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    Seriously, what is the point of this thread? Is it really to talk about finances, or just **** and **** and ****?
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  • engtaz
    engtaz Posts: 7,652
    edited July 2007
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    It's a Fan Boy slap fest.
    engtaz

    I love how music can brighten up a bad day.
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  • scottvamp
    scottvamp Posts: 3,277
    edited July 2007
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    :confused: It was a interesting news thread until Xtreme gen Dem showed up. I "owned" both system and find the multi-billion dollar gaming industry interesting. I no longer have a 360........................
    because................
    wait for it..................
    Three Lights of Death dun da.........Three Lights of Death dun da.
    Xbox fan boys are upset and i don't blame them. They should be. And yes PS3 games have been slow but first quarter of 2008 is really stacking up to be an exciting time for games. Which puts the PS3 out the same amount of time the 360 was when the next gen Sony hit the market.
    For me and many others, the PS3 playing games is just an added bonus.

    I hope the extended warranty comes in handy for the 360 owners!
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  • Demiurge
    Demiurge Posts: 10,874
    edited July 2007
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    Shizelbs wrote: »
    Seriously, what is the point of this thread? Is it really to talk about finances, or just **** and **** and ****?

    That is all it's for, and I'm going to follow this guy to every thread where he makes posts like this and keep pointing it out every single time.

    There are a lot of people on this forum who own an XBox 360. A lot of people are having problems with them. A lot of us still enjoy them.

    There are a lot of people on this forum who own a PS3. I haven't really heard of any issues with them at all. Some people own BOTH platforms. :eek:

    I thought this was a video game forum for discussing games and new gaming technology.

    There was like one or two threads back when XBox 360 and PS3 were being talked about pre-release and we wondered who was going to drop 6 hunnies on a gaming console. Wow, there's some VILE hate in that question for Sony...Good **** grief. :rolleyes:
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  • Demiurge
    Demiurge Posts: 10,874
    edited July 2007
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    scottvamp wrote: »
    :confused: It was a interesting news thread until Xtreme gen Dem showed up. I "owned" both system and find the multi-billion dollar gaming industry interesting. I no longer have a 360........................
    because................
    wait for it..................
    Three Lights of Death dun da.........Three Lights of Death dun da.
    Xbox fan boys are upset and i don't blame them. They should be. And yes PS3 games have been slow but first quarter of 2008 is really stacking up to be an exciting time for games. Which puts the PS3 out the same amount of time the 360 was when the next gen Sony hit the market.
    For me and many others, the PS3 playing games is just an added bonus.

    I hope the extended warranty comes in handy for the 360 owners!

    Are you for real? Nobody can possibly be this ignorant....
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  • scottvamp
    scottvamp Posts: 3,277
    edited July 2007
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    Demiurge wrote: »
    Are you for real? Nobody can possibly be this ignorant....
    WTF! What are you talking about? You are on some serious crack, guy. People are ignorant because the 360 has a high failure rate. OK!:rolleyes: You got issues man!
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  • scottvamp
    scottvamp Posts: 3,277
    edited July 2007
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    Demiurge wrote: »
    I'm going to follow this guy to every thread where he makes posts like this and keep pointing it out every single time.
    Now your admitting your an online forum stalker. Scary, man! :eek:
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  • mantis
    mantis Posts: 17,056
    edited July 2007
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    Things are not built like they used to be. I see a higher failure rate today in electronics then ever before. I can't stand it.
    I have had my Laptop fail twice in 2 years, my orignal xbox 3 times , my xbox360 had to go back for repairs , my Rotel preamp had the digital board go bad and had to be replaced , I had 3 digital cameras go bad in under a year. I could go on and on.

    Things suck
    Dan
    My personal quest is to save to world of bad audio, one thread at a time.
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  • PolkWannabie
    PolkWannabie Posts: 2,763
    edited July 2007
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    scottvamp wrote: »
    Now your admitting your an online forum stalker. Scary, man! :eek:
    I guess the ignore feature isn't working ...
    Rick
    HT+ Sunfire TG IV, Dual CG Sig II's, CinePro 1K2, Oppo 981, Audio Technica PL120, Polk SRT's & F/X1000's, Samsung 71" DLP
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  • AsSiMiLaTeD
    AsSiMiLaTeD Posts: 11,722
    edited July 2007
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    Sony is God. Sony PS3 RULEZ!!!! XBOX 360 SUX!!! Microsoft is the DEVIL!!!

    There Scott, you happy? You can go back in your hole.
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  • AsSiMiLaTeD
    AsSiMiLaTeD Posts: 11,722
    edited July 2007
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    BTW, I don't currently own either system, but would like to own both someday. It'll likely be a 360 first, since I don't want to shell out 600 for a PS3.
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  • jdhdiggs
    jdhdiggs Posts: 4,305
    edited July 2007
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    Sorry Scott, you are going out of your way to bash M$ and the X-Box and push the PS3 on everyone. You are the definition of a "Fanboy" and it is REALLY annoying. Even if you were just trying to have a "discussion" about this, since it was started by you It will be perceived as bashing to anyone who has seen your prior posts. I mean really, you post an article about M$ fuckups and not call it bashing? WTH?

    I guess that's what happens to M$ by bringing out a more powerful console a full year ahead of Sony's. Not enough time for QA.

    Are you going to post how much money Sony is losing on the PS3 system? I mean, this is a discuassion on the finances for the next gen consoles and not a bash session.... right?

    http://www.cnn.com/2007/TECH/fun.games/07/09/sony.price.reut/index.html

    Hmm, cutting prices due to lackluster sales.... Looks like Sony's in trouble. Introducing a new model that only has a bigger hard drive? WTH? Sony's just trying to rip off all the consumers!!! I'm just posting facts, not bashing! Don't accuse me of bashing! (Do you see how stupid that sounds?)
    There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin
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  • Refefer
    Refefer Posts: 1,280
    edited July 2007
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    This thread needs to finish.
    Lovin that music year after year.

    Main 2 Channel System

    Polk SDA-1B,
    Promitheus Audio TVC SE,
    Rotel RB-980BX,
    OPPO DV-970HD,
    Lite Audio DAC AH,
    IXOS XHA305 Interconnects

    Computer Rig

    Polk SDA CRS+,
    Creek Audio 5350 SE,
    Morrow Audio MA1 Interconnect,
    HRT Music Streamer II
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  • jdhdiggs
    jdhdiggs Posts: 4,305
    edited July 2007
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    All of them do...
    There is no genuine justice in any scheme of feeding and coddling the loafer whose only ponderable energies are devoted wholly to reproduction. Nine-tenths of the rights he bellows for are really privileges and he does nothing to deserve them. We not only acquired a vast population of morons, we have inculcated all morons, old or young, with the doctrine that the decent and industrious people of the country are bound to support them for all time.-Menkin
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  • dudeinaroom
    dudeinaroom Posts: 3,609
    edited July 2007
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    wow, I have read some of his old post, and didn't think of this as a bashing thread, just a post of a news article. with a nice little heads up about Microsoft fixing broken unit that were originally out of warranty. If you ask me "M$" is Microsoft bashing:eek:
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  • Demiurge
    Demiurge Posts: 10,874
    edited July 2007
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    Refefer wrote: »
    This thread needs to finish.

    They never needed to be started, which is the point.
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  • scottvamp
    scottvamp Posts: 3,277
    edited July 2007
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    dudeinaroom wrote: »
    wow, I have read some of his old post, and didn't think of this as a bashing thread, just a post of a news article. with a nice little heads up about Microsoft fixing broken unit that were originally out of warranty. If you ask me "M$" is Microsoft bashing:eek:
    Yep, everything was fine tell Dem started shooting off his mouth. Just like every other thread.

    jdhdiggs, it is common knowledge that i believe Sony was losing over $300 a console. That is why a found the unit a bargain at launch time. I have nothing to do with Sony. I have enjoyed what HomeTheater magazine and many others have called "Product Of The Year". And ended every article with "by the way it plays video games". My 360 broke and i do not think M$ dealt with the situation effectively. Their is noway i would run out and buy 2 or 3 PS3's after they broke because i have some kind of beef with Xbox. I would be pissed.

    PolkWannabie, and what is sad is Dem knows he is on my ignore list yet still talks $hit behind my back and on my threads..............:confused:
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  • BIZILL
    BIZILL Posts: 5,432
    edited July 2007
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    just for you, scottie...

    billysm.gif

    POLK SDA-SRS 1.2TL -- ADCOM GFA-5802
    PANASONIC PT-AE4000U -- DIY WILSONART DW 135" 2.35:1 SCREEN
     ONKYO TX-SR805
    CENTER: CSI5
    MAINS: RTI8'S
    SURROUNDS: RTI8'S
    7.1 SURROUNDS: RTI6'S
    SUB: SVS PB12-PLUS/2 (12.3 series)
    XBOX 360    WiiPS3/blu-rayTOSHIBA HD-A35 hd dvd

    http://polkarmy.com/forums/index.php
    bobman1235 wrote:
    I have no facts to back that up, but I never let facts get in the way of my arguments.
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  • scottvamp
    scottvamp Posts: 3,277
    edited July 2007
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    BIZILL wrote: »
    just for you, scottie...

    billysm.gif

    Waaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa!:D
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  • Demiurge
    Demiurge Posts: 10,874
    edited July 2007
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    Wow, you truly are completely oblivious.
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  • BIZILL
    BIZILL Posts: 5,432
    edited July 2007
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    Demiurge wrote: »
    Wow, you truly are completely oblivious.

    ;):p

    POLK SDA-SRS 1.2TL -- ADCOM GFA-5802
    PANASONIC PT-AE4000U -- DIY WILSONART DW 135" 2.35:1 SCREEN
     ONKYO TX-SR805
    CENTER: CSI5
    MAINS: RTI8'S
    SURROUNDS: RTI8'S
    7.1 SURROUNDS: RTI6'S
    SUB: SVS PB12-PLUS/2 (12.3 series)
    XBOX 360    WiiPS3/blu-rayTOSHIBA HD-A35 hd dvd

    http://polkarmy.com/forums/index.php
    bobman1235 wrote:
    I have no facts to back that up, but I never let facts get in the way of my arguments.
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