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Nearly one in every three Xbox 360 consoles fail, according to retailer reports

By several metrics, the Xbox 360 is the most successful console so far of this generation. Despite the startling pace of the Wii, the Xbox 360 still has the most consoles sold worldwide and the longest list of games and exclusives. For a gamer looking for online-enabled high-definition gaming today, the Xbox 360 appears to satisfy those needs.

One often overlooked factor when considering a console purchase is reliability, an area that is apparently where the Xbox 360 falls short. Anecdotal evidence is heavily pointing to Microsoft’s latest console as being significantly more prone to failure than what consumers are accustomed to.

Microsoft has said before that its Xbox 360 failure rate falls within three to five percent, what it believes to be well within industry standards. Internet reports from Xbox 360 owners, however, suggest that the failure rate is much higher than that.

In an effort to gain a more accurate picture of Xbox 360 failure rate, DailyTech decided to poll retail outlets that sell the Xbox 360 and with it the option to purchase an in-store extended warranty. Out of all Xbox 360 extended warranties sold, we wanted to know how many were claimed by consumers with defective consoles, thus giving us a more accurate failures percentage.

After contacting several retailers from various regions in North America, the responses were unanimous: the Xbox 360 is the least reliable gaming console in recent history. Current EB Games or GameStop employees who offered information did so under strict anonymity, as it is against company policy to reveal such information to the public. Furthermore, our sources confirmed that EB Games revised its Canadian warranty policies during early 2007 for consoles solely due to the failure rate of the Xbox 360.

EB Games held conference calls for its Canadian stores informing them of the new policy changes and revealing alarming failure rates of the Xbox 360. “The real numbers were between 30 to 33 percent,” said former EB Games employee Matthieu G., adding that failure rate was even greater for launch consoles. “We had 35 Xbox 360s at launch I know more than half of them broke within the first six months (red lights or making circles under the game discs). Two of them were dead on arrival.”

Interestingly, Microsoft has acknowledged that the initial batch of Xbox 360 consoles made during the launch window suffer from below average reliability. In response to an overwhelming defect rate of launch consoles, Microsoft agreed to repair all machines manufactured in 2005 free of charge, and issue a refund for those who already paid for repairs of launch units up until January 1, 2006.

The three flashing red lights – commonly referred to in gaming communities as the “Red Ring of Death” – is a sign of an Xbox 360 hardware failure. The sign is apparently common enough that Microsoft has added an option to its 1-800-4MY-XBOX support line that names “three flashing red lights” specifically.

As a result of the high failure rate of the Xbox 360, EB Games corporate nearly doubled the prices of its one-year, over-the-counter warranty. While the previous warranty would give a customer a brand new console in exchange for the broken one, the new policy now states that the customer will receive a refurbished console instead. The move was made because it was becoming too costly for the retailer to give the customer a brand-new machine, which still carries a store cost close to the MSRP. The price increase and policy change wasn’t exclusive to only the Xbox 360, however, as it also applies to all other Sony and Nintendo consoles sold.

The failure rate nearing a third of all Xbox 360 consoles was found at other retailers too. A Best Buy customer service department manager, who wished to remain unnamed, said that failure rates for the console were “between a quarter to a third” of all units sold.

“We see a ton of [Xbox 360s] come back all the time. We strongly push our customers to buy our service plans no matter what they buy, but it is especially important for them with the Xbox 360,” said the manager. “It’s a lucky thing for us that Microsoft extended the factory warranty to one year, because we were having a hell of a time dealing with the launch units. Now we don’t have to deal with those broken [Xbox 360s] until their second year, for those who have purchased the two year plans.”

In late 2006, Microsoft boosted the warranty of all Xbox 360 consoles to one year, up from 90-days previously. For gamers who are out of warranty, however, a replacement or repair will cost Xbox 360 customers $140.

When compared against other systems, the Xbox 360 is failing at higher rates than its current competitors and predecessors. Former EB Games worker Matthieu G. said that the failure rates for all other consoles were not high enough for the retailer to consider revising its policies, and guesses that most other console systems have a failure rate of less than one percent, including the PlayStation 3. Another EB Games manager, when asked if the store warranty was worth it, conceded that in the hundreds of Wii units sold at that location thus far, zero have come back as defective.

Despite the overwhelming evidence that the Xbox 360 is a relatively unreliable games machine, Microsoft officials refuse to comment on its failure rate. Peter Moore, VP of Microsoft’s entertainment division, said to the Mercury News, “I can’t comment on failure rates, because it’s just not something  – it’s a moving target. What this consumer should worry about is the way that we’ve treated him. Y’know, things break, and if we’ve treated him well and fixed his problem, that’s something that we’re focused on right now. I’m not going to comment on individual failure rates because I’m shipping in 36 countries and it’s a complex business.”

Similar questions regarding the Xbox 360 hardware met with the man responsible for the design of the console, Todd Holmdahl. He too sidestepped the issue with the Mercury News, saying, “I would say we don’t have a high defect rate. The vast majority of people are really excited about their product, and that we are targeting profitability for next year.”

Asked differently about whether or not the Xbox 360 falls into the ‘normal’ three to five percent return rate, Holmdahl said, “We don’t disclose the actual number,” and “We don’t comment on that.”

No piece of technology, no matter how well designed, should be expected to completely free of failure. The key metric is whether or not a product falls within industry standards of acceptable failure rates – and from findings based off retailer-supported warranty returns, the actual rate of failures could be six to ten times greater than what Microsoft is letting on.

Regardless of what the actual failure rate is, there is consumer perception that the Xbox 360 is a less reliable machine than its competitors. That fact alone should encourage Microsoft to do more than just avoid all comments on failures and only preach on the wonderful experience of its consumer base.

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Somewhere in between
By mediajediHD on 7/2/2007 1:37:20 PM , Rating: 3
I think that the problem is most likely somewhere in between the doom and gloom of the internet forums and the rose colored glasses worn by Microsoft.

Has the XBOX 360 had higher then average defective returns? Most likely. Have the returns been as high as the forum masses want us to believe? Most likely not.

I personally know 10 different people with XBOX 360 consoles. Out of those 10 there have been 2 bad units. One of the guys messed around with modding the console just before it went bad (I'm not blaming modding, I know people who do it and didn't screw up the machine), while the other one went bad after using the HD-DVD drive.

Is 2 out of 10 too high a defect ratio? Yes, definitely. But is it as bad as what some folks are claiming? No.

I know I'll get flamed for this post (I'll be called a Microsoft fanboy, or other nasty things, BTW I own a PS3, and a Wii), but I just wanted to be the voice of reason.

A lot of the negative we hear on the Internet comes from the fan-boys. I've actually met Sony fans who specifically post untrue things about the XBOX 360 just to feel good about themselves (and I'm sure Microsoft folks do the same). I've been called a baby and other such polite things because I own a Wii.

Of course I've also heard that every XBOX 360 that dies causes a fairy to fade away, and that every PS3 sold contributes to global warming, and that Nintendo uses slave Goomba labor in their factories.

The other thing I want to mention is I would not believe any story fed to me from EBGAMES/GAMESTOP about either console.

RE: Somewhere in between
By leexgx on 7/2/2007 5:09:04 PM , Rating: 2
to small an number of users there

PS1 the only problem i had with that console was the Laser buring out after Extended use (used that lovey ps1 alot heh and that was for more then an yr) and that part was user replaceable and does not cost mutch

we should Push other companys like sony playstation corp and wii fail rates i bet you thay will not hold there fail rate back but as others have posted thay are quite new to the market so we need 2 yrs before we can see how reliable thay are

but facts are PS1 and 2 and Any other console has ever been made have not fail this bad (even there Xbox original console was quite reliable)

RE: Somewhere in between
By MeTaedet on 7/2/2007 11:45:59 PM , Rating: 3
I personally know 10 different people with XBOX 360 consoles. Out of those 10 there have been 2 bad units.

Is 2 out of 10 too high a defect ratio? Yes, definitely. But is it as bad as what some folks are claiming? No.

Actually, 2 out of 10 is what one would expect from such a small sample size. If you will notice, taking into consideration the size of the sample, it is very close to the 33% failure rate (which would be 3 out of 10 (or 1 out of 3)). The larger the sample size, the closer the number will come to 33%, if the true failure rate is in the neighbourhood of 33%. I grant that it may not be as great as that, but your small sample isn't proof of anything.

I am afraid that you rather seem to be predisposed to the employment of logical fallacies. You have committed no fewer than two with this post of yours and probably more. In my judgment, the possibilities are as follows:

1. Fallacy of Hasty Generalization / Inductive Fallacy / The Fallacy of Misleading Vividness

2. Fallacy of Anecdotal Evidence.

3. Argument from Personal Incredulity fallacy

4. Argument from Lack of Imagination fallacy

5. Argument from Ignorance fallacy (Argumentum ad Ignorantiam)

6. Fallacy of Wishful Thinking.

I just wanted to be the voice of reason.

Isn't the very least ingratiating aspect of reality that the things that we most devoutly wish are the very things we seem not to be able to attain? O, this mortal coil!

"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher

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