In 2007, facing increasing reports of Xbox 360 hardware failures, Microsoft made a dramatic move. Just before that year's Electronic Entertainment Expo, it announced that it would extend the console's warranty to three years from its manufacture date for the so-called "Red Ring of Death." Although that move cost the company over $1 billion, it further broadened the 360's warranty this past April to cover another issue known as the "E74 error."
Despite Microsoft's attempts to improve manufacturing quality, the Xbox 360 was recently accused of still having an alarmingly high failure rate by a Game Informer survey. Some 54.2 percent of 5,000 subscribers to the magazine said they had at least one Xbox 360 fail, with 41.2 percent saying they had at least two hardware failures. Though avoiding specifics on failure rates, Xbox Live and Xbox 360 director of product management Aaron Greenberg admitted the early production lines of the 360 were beset by problems.
"I can tell you the consoles we're making today have lower-heat chips and better cooling, and we're seeing fantastic quality in those consoles today," Greenberg told GameSpot today. "That said, I know people have had issues with systems, which were bought earlier in the life cycle, and that's part of the reason why we implemented our unprecedented three-year warranty for anyone who gets the three red-ring flashing light error or the E74 error."
He continued, "So I think we've made it clear we stand by the quality of our product, and we will make it right by fixing the problem at no extra cost to you. But at the same time, we've been working hard to make improvements in the products we're currently making, so I really feel like most of this is well behind us." Greenberg then repeated that the three-years-from-manufacture-date red-ring/E74 error warranty remains in effect for all 360s already on the market--and will extend into the future to those currently being made.