“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,” Jessica Mintz reports for The Associated Press.
“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,” Mintz reports. The glitches, and the bad publicity, could weigh the company down as it claws for market share in the highly competitive console market. In May, the Xbox 360 ranked No. 2 in unit sales behind Nintendo’s Wii, but still beat out Sony’s Playstation 3, according to data from NPD Group.”
MacDailyNews Take: And if Sony wasn’t completely incompetent, Microsoft would be in dead last with their never-turned-a-profit Xbox.
Mintz continues, “‘We don’t think we’ve been getting the job done,’ said Robbie Bach, president of Microsoft’s entertainment and devices division, which also makes the Zune digital music player, a distant competitor to Apple Inc.’s powerhouse iPod.”
MacDailyNews Take: Robbie Bach, Microsoft’s President of Failures (Middling to Abject division). It seems like the average TV weatherman has more accountability than the childishly-forenamed Bach.
Mintz continues, “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.”
Mintz reports, “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.'”
Full article here.
[Thanks to MacDailyNews Readers too numerous to mention for the heads up.]
MacDailyNews Take: So, now we have the “Red Ring of Death” to go along with the “Blue Screen of Death” – just how many “deaths” dealt to consumers from Microsoft does it take before consumers deal the death blow to Microsoft?
This is truly helping Xbox profitability, isn’t it? They should have just handed a $100 bucks to everyone who bought and suggested they get a Wii.
Excellent!
Heads are gonna roll over this in Redmond.
Expect to see 100s of flying chairs coming out of Ballmer’s office.
Yet another fantastic success story for Microsoft.
Those superhot IBM processors claim more victims. I guess Apple moving to Intel makes even more sense now. No more need for liquid cooling etc. Heat is a killer for electronics. Ha Ha Microsoft.
YEAH BABY!!!
this must be the best news in a long time
This is wonderful and all, but what about my replacement 360 I just got? Does it have the faulty hardware replaced, or can I expect my “new” 360 to kick the bucket within the next 6 months like my first one?
Screw MS for making an awesome system that cooks itself to death. BAH!!!
At least I have my Wii to fall back on.
“Matt Rosoff, an analyst at the independent research group Directions on Microsoft”
What kind of a techno-dork do you have to be to start this group?
HAW haw!
Estimated year for xbox division to break even…
2054.
Estimated year for xbox divison to make a profit…
3300.
I wish Apple did this when my Powerbook lower RAM slot burned out. They just said it only affected some models 1.5Ghz and up and left thousands of us lower speed Powerbook owners in the shit.
Good on you Microsoft for fessing up!
Microsoft and Sony are so lame. I miss the days of Nintendo vs. Sega, when games were driven by competition between more then one innovative company.
id rather have anything from microsoft the kings of the techworld than anything from some wanabee like wee or mac. microsoft stuff dont always work but when it works O MAN does it rock so sweet. i got my xp tower uv power looking almost like your fave tiger already and i will put vista back on it when the fix the driver stuff and then ima get a xbox360!!! no wee 4 mee
Estimated date for Zune profitability…
∞
Bill Gates looks under his sofa cushions for the cash to cover this.
and don’t give them too much credit Brain Fart. They really were left with no choice which is what happens when a company has real competitors.
“Thanks to MacDailyNews Readers too numerous to mention for the heads up.”
Including yours truly!
Now get back on the short bus, little boy.
“Robbie Bach, Microsoft’s President of Failures (Middling to Abject division). It seems like the average TV weatherman has more accountability than the childishly-forenamed Bach.”
Oh my God!!!!! That is too funny, MDN!
Middling to Abject…….ha!
This is why Windows and Office are so fscking expensive.
Blue Screen of Death
Red Ring of Death
Microsoft comes up with some clever taglines for their products.
“Thanks to MacDailyNews Readers too numerous to mention for the heads up.”
Me too!
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One Billion Dollars! How many Xboxes does that buy at cost? Maybe 50% of all of them made so far?
Here’s hoping the same thing doesn’t befall the iPhone.
I have a PS3 hooked up to my 60″ HDTV and it is an amazing device. Besides the games, it has a Blu-ray player and it increases the resolution of regular DVDs. Games in 1080p are stunning and I’ve even managed to get it to stream MPG files from my Mac.
That said, Sony seems strangely indifferent to the PS3. It has every chance of becoming their “iPod”, yet it hardly gets any push in the media at all.
I bought it for the Blu-ray drive, but the current selection of Blu-ray titles is Puh-THEH-tic! Barely 300 titles available anywhere. Hey Warner, why can’t I get Harry Potter on Blu-ray yet?
Sony did the right thing by putting Blu-ray into the PS3, but they can’t stop there. They’ve got to get more movies out in Blu-ray – as in ALL movies.
Pity them for they know not what they do!
Phatman,
You are a lemming!!!
Wake up and look around!
The headline to this article says it all.
Couldn’t happen to a more deserving company.
Cubert,
Phatman is 12 years old. Take it easy on him.