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GameStop and EB Games no longer offer in-store warranty of Xbox 360

Selling extended warranties is often a major source of profit for electronics retailers. Termed “product replacement” or “product service” plans, store employees are incentivized to push such added costs to the consumer – though most savvy buyers hardly ever give in to such pressures.

It’s not unheard of that an extended in-store warranty saves the day for a customer’s broken product, but clearly the odds are in the retailer’s favor – that is, of course, unless a given product has an abnormally high failure rate.

The Xbox 360 may be one such product that exhibits such a high failure rate that a corporation would deem it unprofitable to offer cover under its own policies. GameStop recently issued a memo to its stores instructing workers to stop selling the product replacement plan (PRP) for new Xbox 360 purchases.

The store operations memo, as hosted by GamersReports, reads: Effective immediately GameStop will no longer offer PRPs on new, refurbed, and used Xbox 360 systems. When prompted by the POS ‘Do you want a PRP plan added to this purchase,’ please press ‘Escape’ and DO NOT offer PRPs to customers purchasing an Xbox 360 system. Customers purchasing a new Xbox 360 system will still receive a 1 year manufacturer’s warranty from Microsoft.

Phone calls to various GameStop and EB Games stores in San Francisco confirmed that the new policy was already well-known by store workers. GameStop will still offer product replacement plans for the PlayStation 3 and Wii, both of which also come with a one year manufacturer’s warranty.

DailyTech
found during the investigation into the 33 percent failure rate of the Xbox 360 that EB Games, a chain owned by GameStop, early in 2007 nearly doubled the prices of its one-year, over-the-counter warranty. Even with the price increase, it appears that GameStop feels that covering the Xbox 360 to be an unworthy risk.

At the time of the Xbox 360 launch, Microsoft supplied only a 90-day warranty with its console. More than a year later, Microsoft boosted the warranty to one year to better match-up with the warranty terms offered by competitors.

Quickly following widespread reports that one-third of all Xbox 360 units fall to the dreaded Red Ring of Death, Microsoft extended its warranty to cover the specific hardware failure for three years from purchase.

In addition to the upgraded warranty coverage, Microsoft has also been making hardware changes in hopes to improve the reliability of its console. In June, Microsoft introduced a revised cooling design with heatpipe and heatsink to cool the GPU. Word also came of new “Falcon” hardware that would include 65nm chip technology, which was later found to apply only to the CPU. Hardware to integrate a 65nm GPU, codenamed “Jasper,” isn’t due until August 2008.

65nm “Falcon” consoles flocked to consumers during late September, which proved with its smaller die and heatsink that the newest hardware revision will run cooler. Despite Microsoft’s efforts in improving its manufacturing process, GameStop’s decision to stop selling its PRP shows a vote of non-confidence in the current reliability of the Xbox 360.


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Figures...
By Farfignewton on 10/28/2007 11:24:53 PM , Rating: 5
The one time you might actually WANT the dang warranty... ;)




RE: Figures...
By enlil242 on 10/28/2007 11:35:24 PM , Rating: 5
Well, being that the abnormal faliure rates forced Microsoft to offer a 3-year warranty on RRoD issues, I'd say that the RRP is still a waste of money. I would only consider getting a replacement plan like this on high-end purchases (Plasma TV's, etc.)

However, that said, I am sure that the initial xbox failures really took advantage of such plans until Microsoft finally came around...


RE: Figures...
By FITCamaro on 10/28/2007 11:53:45 PM , Rating: 5
Kinda dumb to do it now considering that the issues that were causing the console to brick have pretty much been fixed.


RE: Figures...
By daftrok on 10/29/2007 12:00:08 AM , Rating: 1
Really?


RE: Figures...
By One43637 on 10/29/2007 2:52:38 PM , Rating: 1
quote:

by FITCamaro on October 28, 2007 at 11:53 PM

Kinda dumb to do it now considering that the issues that were causing the console to brick have pretty much been fixed.


Yeah I don't believe that. My friend got his second RROD after his got fixed 5 months back.....


RE: Figures...
By FITCamaro on 10/29/2007 4:12:20 PM , Rating: 2
It's still an older model though. The newer ones are more reliable since they have the improved heatsink and the newest have the 65nm processor.

My 360 is 5 months old and I haven't had a single problem with it.


RE: Figures...
By DASQ on 10/30/2007 11:18:46 AM , Rating: 2
My friends' 360 has failed 3 times in the last year. Unless they keep sending him old ones.


RE: Figures...
By XToneX on 10/30/2007 11:24:20 AM , Rating: 2
I bought a brand new one 1 month and a half ago. It died a few weeks ago. I replaced it via Best Buy's PRP. If it wasn't for the PRP, I wouldn't own an xbox360. It's about darn time Microsoft got off their rear ends and FIXED their problem, not make lame excuses like, "Oh well.. umm... don't be mad that our product sucks... be happy about the way that we resolve your problem" What a joke...


RE: Figures...
By crazyblackman on 10/29/07, Rating: -1
RE: Figures...
By thebrown13 on 10/29/2007 12:21:11 AM , Rating: 1
I bought a new 360, and had my broken one shipped back to me. So I have two now, and they both work perfectly. My old one had disc read errors, but not the new ones. Wee!


anyone ever had a problem with...
By inperfectdarkness on 10/29/07, Rating: 0
RE: anyone ever had a problem with...
By darkpaw on 10/29/2007 9:20:00 AM , Rating: 2
Actually, my Wii is the only console I've ever owned that has ever needed to be warrantied. Three months after buying it I started getting screen artifacts all the time.

That said, they sent an advance replacement unit in about two days and I just had to return my original one. Was really great service on their part.

Only thing that kinda freaked me out, they shipped the replacement unit in a box form fit to the Wii with only about a 1/8" bubble envelope around it. Surprised they made it through UPS like that at all.


By inperfectdarkness on 10/29/2007 11:55:13 AM , Rating: 4
ditto on the wii. but they took care of it real fast.

that's the ONLY nintendo system i've ever had to get checked. i've got all of them. i've had my snes since 1994, and it still runs like a top. same for the n64 and the NES. hell, i had a neighbor accidentally run over his gameboy with a car, and it still worked. i will swear on a bible that nintendo has some of the best product testing of any company in the world.

dealing with nintendo for product service is like dealing with USAA for insurance. i wouldn't want anyone else.


By Locutus465 on 10/30/2007 4:15:28 PM , Rating: 2
Weird, that's what happend to mine and in about the same time... I had VC games so it need to be repaired and sent back, I was shocked to see on the return slip that they "were unable to duplicate the problem - unit replaced"... Especially since it did the same thing on my friends SD TV with composit inputs


By Locutus465 on 10/30/2007 4:13:13 PM , Rating: 2
Yes, my Wii died a couple of months after I bought it... Well, not complete death, but it started throwing out visual artifacts... Every product on the market has a failure rate, it's sad that my mods are lost so I could post this :(


There may be another reason
By SunAngel on 10/29/2007 1:26:03 AM , Rating: 1
quote:
65nm “Falcon” consoles flocked to consumers during late September, which proved with its smaller die and heatsink that the newest hardware revision will run cooler. Despite Microsoft’s efforts in improving its manufacturing process, GameStop’s decision to stop selling its PRP shows a vote of non-confidence in the current reliability of the Xbox 360.


The underwriter they were using decided not to continue warranting this particular electronic. Best way to find out is ask who the underwriter is for their current products, if it is the same then obviously (1) yes, it was the underwriter nolonger wanting to warranty the device, and (2) EBGames has not found a suitable replacement underwriter.

The FUD about EBGames purposely not wanting to extend warranties on these devices is unproven.

You guys are really going to have to go the extra mile to prove these are articles are based on credible evidence. These same kind of articles nearly got HardOCP wiped off the map.




RE: There may be another reason
By Marcus Yam on 10/29/2007 1:40:01 AM , Rating: 2
I'll try to get someone from GameStop head office to comment.

I got two different, but similar, responses from the store workers when asking why they won't sell the PRP anymore

Response 1: "IT WAS COSTING THE COMPANY TOO MUCH MONEY."

Response 2: "WE WERE LOSING MONEY ON THEM."

They never mentioned anything about an underwriter. But to extend the parallels to any other type of insurance, it's possible that any sort of underwriter who would be willing to insure all Xbox 360 purchases would charge so much for the PRP that it would be unsellable.

Don't forget that GameStop replaces rather than fixes consoles with its PRP. You walk into the store with your broken Xbox 360 and you walk out with a fully working one. The costs associated with that are a bit different than if you crash your Civic or Mustang.


RE: There may be another reason
By Samus on 10/29/07, Rating: -1
RE: There may be another reason
By mcturkey on 10/30/2007 11:40:46 PM , Rating: 2
The store-level employees weren't informed of the direct reasoning anymore than you were by reading that memo.

Consider this: GameStop sells about 30% of all new video games/systems sold in the US. If a third of the 360's sold come back for warranty service, as per the claim from EB Games earlier in the year, then some 10% of all new 360's sold are not ever going back to Microsoft. If you know your console has issues, but 10% of the time you don't even have a chance to take a look at them or speak with the customers, isn't that a problem? Given how much money GameStop is investing into their refurbishment center, and how wide the profit margins still are on used/refurbished systems, I would bet money this had nothing to do with repair costs, and everything to do with Microsoft wanting a better idea of genuine failure rates.


RE: There may be another reason
By gbed on 10/29/2007 1:36:56 PM , Rating: 2
Show me where HardOCP has lost any credibility statement!!! They fought infinium in court and WON. HardOCP is a website where the consumer (that means you)comes first. Their testing methodologies and reputation are rock solid.


warranty on USED consoles
By agent2099 on 10/29/2007 12:41:14 AM , Rating: 2
The article states that new console purchased from gamespot will have the manufacturers warranty. But what about used consoles. No one in their right mind would buy a used XBOX from gamestop without any kind of warranty at all.




RE: warranty on USED consoles
By Marcus Yam on 10/29/2007 1:41:22 AM , Rating: 1
<Office Space>Didn't you get that memo?</Office Space>

quote:
“Effective immediately GameStop will no longer offer PRPs on new, refurbed, and used Xbox 360 systems. When prompted by the POS ‘Do you want a PRP plan added to this purchase,’ please press ‘Escape’ and DO NOT offer PRPs to customers purchasing an Xbox 360 system. Customers purchasing a new Xbox 360 system will still receive a 1 year manufacturer’s warranty from Microsoft.”


Quoted straight from the article text above.


RE: warranty on USED consoles
By peritusONE on 10/29/2007 11:37:43 AM , Rating: 2
quote:
But what about used consoles. No one in their right mind would buy a used XBOX from gamestop without any kind of warranty at all.

Gamestop/EB includes a 30-day replacement plan on ANYTHING you buy used in the store, including used consoles....this 30-day guarantee is implied with the used purchase without anything needing to be done by the customer. The 1-year PRP was an optional purchase. Sounds like the 30-day warranty is still in effect. I worked at Gamestop over the summer, if that helps my credibility in any way :).

Also, earlier in the article, it was stated that extended warranties were sold by employees, usually earning them a bit extra in some type of commission. Gamestop/EB does NOT offer any commission of any kind on any sales (reserves, GI subs, or PRP's), but atleast there is no weekly quota on PRP's like there are with reserves and GI subs.

When I worked there, I often turned people away from the PRP on particular products because they were a complete waste. You also have to be careful when signing up for a Gamestop PRP, because the first 6 months have certain stipulations, and the remaining 6 months follow a different criteria for returning your product.


33%
By ciparis on 10/29/2007 12:33:34 AM , Rating: 1
That 33% figure is probably low by now, for units produced before the production improvements this summer. At least the new models should be much better.




RE: 33%
By leexgx on 10/29/2007 4:31:00 PM , Rating: 2
you still got the Xboxs from 1 year ago so you got untill Next year untill all the Older Xboxs fail and get replaced (the 30% of them any way)

the New 65 Xboxs are no guaranty that thay still not fail, in any case its Not profitable to do an Instore 1yr job on Xbox 360, i am suprised it taken them so long to remove it, as it Only benefits the customer in this case


RE: 33%
By bangmal on 10/29/2007 9:40:42 PM , Rating: 1
30% is a highly exaggerated number.
dont swallow everything that is put into your mouth.

The reality is the causes of the failure of older xbox 360 has been identified, which can be easify fixed, the x-clmap thing, even you can do it yourself if you are not that retarded. And it is been proved the newer xbox has had this bug fixed. No need to scream here.


HAHAHAHAHA!
By Samus on 10/29/2007 5:45:07 AM , Rating: 3
Microsoft: PWNED!




Whoa...
By Mach Omega on 10/29/2007 4:42:33 PM , Rating: 2
Those PRPs are like the house edge in a casino... they're junk to the consumer and pure profit for the company offering them. Not offering one for the 360, even with MS's warranty extension, is as damning as it gets. When is a sucker bet not a sucker bet? Obviously when it involves the 360.

That being said, I still envy the hell out of the 360's current game library. I have pre-orders on Assassin's Creed and Kane and Lynch for the PS3, with Drake's Fortune and Haze on the horizon. The games are saving MS's ass right now. Nothing wrong with that.




I can see how this would be true
By SunAngel on 10/29/07, Rating: -1
RE: I can see how this would be true
By The0ne on 10/29/2007 1:25:55 AM , Rating: 5
When you make a product that stands vertically, as shown by the above picture, you would expect to cover most of the basis for people's mishap. If it's not stable being in that position the remove the "feature". If 33% are falling because it's not in a stable position well, who can you blame. Granted there will always be users that are careless but 33% is A LOT.


RE: I can see how this would be true
By sj420 on 10/29/2007 6:17:55 PM , Rating: 2
the case is if you keep it cool and know about the importance of air flow (and draw/exhaust) on hardware such as this.

I do have mine standing up, but only because sitting flat allows the heat to warm the surface beneath it, and generate more heat (much worse than falling, continue reading).

Mine actually tumbled off the table and onto another table that a TV is sitting on, this happened during a "family scuffle" which happened to literally knock over a monitor and shove the table over. This wasn't a friendly scuffle, so to say, but the 360 certainly came out alive. It acted as if nothing happened. A minor mark on the top where it hit but it is just a small dash next the top vent.

Anyway, I use a XION laptop cooler (on newegg, search XION) and stand it up aligned with the two 80mm fans. This works well because most of the time the air being blown out of the 360 is below 42c and it barely idles 42c. This is a good method. If you are really worried about it falling tape it down, seriously.

Also, the white version is better simply for heat dissipation. It doesn't contain heat like black does.

I recommend everyone checks out that XION laptop cooler. I don't expect mine to ever die. Where heat is the enemy, if you kill the enemy, you win.

If you shove it into an entertainment center and never worry about it again, well its going to die. Simple as that.

I was incredibly edged after it fell, don't even ask about the situation it isn't a topic, but lets just say I was weilding a sword to defend my area.

If people understood what it takes to keep it cool, it wouldn't die. As far as I understand the "intercooler" blows in on the fans blowing out, which is completely arrogant. I have yet to see anything or anyone to state otherwise, but if the intercooler blew out like the 360, that would indeed help. However I don't see that as the case, and that is why the intercoolers kill 360s. Blowing the wrong way. USE THE XION LAPTOP COOLER.


RE: I can see how this would be true
By weskurtz0081 on 10/29/2007 10:17:25 PM , Rating: 2
My elite runs very well and does not get very hot. I can touch either side after hours of playing and it's really not very warm to the touch. The Elites must have solved some of the colling issues.


RE: I can see how this would be true
By sj420 on 11/1/2007 1:24:06 PM , Rating: 1
Yeah the new revisions have better components for assisted cooling. I have an old model (zeph - 73205) that was made 2007 - 08 - 07 but that is even more testament to the cooling platform I am using. I might have a better heatsink in there but I don't know.


GO SOX!!!!!!!!!!!!!!!!!!!!!!!!
By SunAngel on 10/28/07, Rating: -1
RE: GO SOX!!!!!!!!!!!!!!!!!!!!!!!!
By SunAngel on 10/29/07, Rating: -1
By weskurtz0081 on 10/29/2007 10:09:53 PM , Rating: 3
Screw the Boston Yankees. I liked them in 04 before the fans turned into obnoxious Yankees fans.... don't like them so much now though.


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