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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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RE: Boring
By Supersonic3474 on 7/2/2007 5:18:54 PM , Rating: 2
I heavily disagree with you, take $1000 and you may end up with a PC that can display graphics close to that of the 360 at $400. And console gaming doesn't require a $600 video card every 2 years. The money you throw at your PC to get it up to snuff is insane. CPU, RAM, MOBO, Video, HDD. You are looking at some serious money there. You pay just $10 on average more for a 360 games than you do a PC game, and you don't have to worry about the bastard crashing constantly especially if you have that piece of garbage VISTA! err how in the world is PC Gaming better, no standard control scheme, NUTZO! no one wants to take their Standard machines and shell out $500 for a video card for their $500 PC. You end up loosing a ton of HDD space, clogging your registry and you have to worry about FPS all the time cause it NEVER STAYS FIXED!

I'm an avid PC gamer, and I have to say that your comments are completely unrealistic. At 7300 for a gaming machine? You'd be lucky to play year or two old titles on that. The fact is that if you have a console's price worth of money, you can't build a PC that can play the same quality games - and do it for the next 5 years. You also can't easily plug it into your TV, pop a disc in, and just play (though it's much closer to that now than it was 2 years ago.)

If you want to spend money on a machine that is only for games, buy a console. If you want the best experience and highest quality graphics, get a PC - but it'll cost you at least twice as much over the life of a console. Now if you want a PC to do other stuff, that has to be factored in as well. You're then only comparing the cost of making your Internet & email PC into something that can play games. This brings the cost closer, but only to about the point where it breaks even.

At this point really comes down to the games you want to play. I prefer to play sports or racing games on a console, while I play shooters or RTS games on a PC.

RE: Boring
By darkpaw on 7/2/2007 6:18:32 PM , Rating: 2
There is no need to buy a $500-600 video card ever, especially not every 2-3 years. A $200 card will usually last for 2-3 years of life.

My brother-in-law is still using a 9800Pro that cost $100 two years ago and while he can't get the latest and greatest, it still works decently in most games.

Console gaming is still a better deal in the long run in bang-for-buck, but for pure versatility the PC can't be beat.

RE: Boring
By Christopher1 on 7/2/2007 10:11:17 PM , Rating: 2
I have to agree with you. A 200 dollar PCI-X video card right now will last a good long time. I've been thinking of upgrading my parents computer recently, but I have to catalog the connections in their PC before I do that, and I'll be buying at most a $200 card.

RE: Boring
By luhar49 on 7/3/2007 4:12:03 AM , Rating: 2
Agree with you.
If you are looking for the excellent quality in latest games at a decent resolution like 22"+(1600x1080), you need to upgrade your graphic cards fast. I just got an ATI 2900XT recently. It cost me only 23% less than my PS3. Thats for the graphics card alone. Add the processor/mobo/RAM/PSU costs and I end up spending almost 2.5 times as much as the PS3.

PC gaming is certainly nice with all the eye candy and the mouse/keyboard support for FPS games. But it comes at a high cost.

RE: Boring
By BMFPitt on 7/3/2007 11:22:00 AM , Rating: 2
I heavily disagree with you, take $1000 and you may end up with a PC that can display graphics close to that of the 360 at $400.
You may, if you spent most of that money on hard drives or something.
And console gaming doesn't require a $600 video card every 2 years.
If PC gaming requires a $600 video card, the console gaming requires a $3000 TV. Both statements are absurd, but it's hard to claim one and deny the other.
and you don't have to worry about the bastard crashing constantly especially if you have that piece of garbage VISTA!
My install of Vista has crashed a total of zero times. Then again, my 360 hasn't had a RROD yet, either. Of course, I take it by your tone that you've never even seen Vista running.
err how in the world is PC Gaming better, no standard control scheme, NUTZO!
Mouse? Check. Keyboard? Check.
no one wants to take their Standard machines and shell out $500 for a video card for their $500 PC. You end up loosing a ton of HDD space, clogging your registry and you have to worry about FPS all the time cause it NEVER STAYS FIXED!
It sounds as if your favorite PC game is installing spyware. In that case, another big benefit of a console is protecting you from yourself.

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