When the Xbox 360 first hit the market, reports swirled that the console was suffering an alarmingly high hardware failure rate. In response, Microsoft executives called for calm, saying a small percentage of all new electronic products are defective and that the 360 was no exception. Purchasers suffering hardware failure--most often indicated by the dreaded red semicircle of death--were urged to contact Xbox customer support (1-800-4MY-XBOX) to have their consoles repaired or replaced.
Nearly 10 months later, Microsoft has now apparently admitted that the initial shipments of Xbox 360s were failing at a greater than normal rate. "As part of our standard and ongoing process of analyzing repair data, we recently noticed a higher than usual number of  units coming in for repair," Microsoft said in a statement sent to GameSpot. "Upon further investigation, it was further discovered that the bulk of the units were isolated to a group that was part of the initial manufacturing run of the console. Returns for repair are coming in for a variety reasons, and it's a higher rate than we are satisfied with."
As a result of its findings, Microsoft has "made the decision to comp repairs for consoles manufactured before January 1,  and provide refunds to the small group of customers who have already paid for repairs." As was the case last year, those wishing to get their consoles repaired or replaced should contact Xbox customer support. However, several calls made by GameSpot to the hardware replacement department at 1-800-4MY-XBOX were greeted by a busy signal.
Speaking to GameSpot, a Microsoft rep stressed that the offer to fix pre-2006 Xbox 360s for free was just that. It does not apply to any consoles made after January 1, nor does it affect the free 90-day limited manufacturer's warranty on the console or the one-year paid warranty Microsoft also offers. The news also does not pertain to replacement plans offered by third-party retailers such as Best Buy.