I’m Impressed… with Microsoft’s Xbox 360 warranty update

It’s always a delight to comment on good news. July 5, 2007 saw Microsoft update their extended warranty package for the Xbox 360.

Red Ring of Death

The Xbox 360 is generally a successful games console with a class-leading online presence and an unmatched seventh-generation games library. The only significant fly in the ointment has been the legend of the red ring of death which some anecdotal reports estimate occurred on a headline-friendly third of all consoles sold. The red ring of death indicates a general hardware failure that can be caused by a number of issues.

We guarantee your Xbox 360 will last… 90 days

While the 360 originally came with a 90-day warranty here in the UK which was later then bumped up to a year for new machines. Outside of the warranty period, a standard-ish repair charge of the best part of £100 was levied for repair or a replacement (as decided by Microsoft). While this warranty is industry standard and the repair / replacement charge not scandalous for a £300 machine, it certainly caused much bad-mouthing and a significant pile of less than satisfied customers.

Microsoft extend themselves

So Microsoft’s announcement that they are now implementing an extended warranty that kicks in if your console shows the red ring of death. (Minor caveat: their wording is specific, this three year warranty doesn’t cover anything else.) This warranty covers the console for three years from the date of purchase, applies to new and previously-sold consoles and will provide a free repair service that includes shipping.

Not only that, customers who had consoles previously repaired from a red ring of death scenario will have their repair costs reimbursed.

One humble pie, please

While it could be argued that Microsoft should have made a more reliable console in the first place (both Sony and Nintendo have managed to produce reliable seventh-generation consoles), this step by Microsoft is outstanding. Not only is the action itself worthy of applause but the manner in which it has been delivered. Below is the Open Letter from Peter Moore on the subject:

To our Xbox Community:

You’ve spoken, and we’ve heard you. Good service and a good customer experience are areas of the business that we care deeply about. And frankly, we’ve not been doing a good enough job.  

Some of you have expressed frustration with the customer experiences you have had with Xbox 360; frustration with having to return your console for service after receiving the general hardware error message on the console.

The majority of customers who own Xbox 360 consoles have had a terrific experience from their first day, and continue to, day in and day out. But when anyone questions the reliability of our product, or our commitment to our customers, it’s something I take very seriously.

We have been following this issue closely, and with on-going testing have identified several factors that can cause a general hardware failure indicated by three flashing red lights on the console. To address this issue, and as part of our ongoing work, we have already made certain improvements to the console.

We are also implementing some important policy changes intended to keep you in the game, worry-free.

As of today, all Xbox 360 consoles are covered by an enhanced warranty program to address specifically the general hardware failures indicated by the three flashing red lights on the console. This applies to new and previously-sold consoles. While we will still have a general one year console warranty (two years in some countries), we are announcing  today a three-year warranty that covers any console that displays a three flashing red lights error message. If a customer has an issue indicated by the three flashing red lights, Microsoft will repair the console free of charge—including shipping—for three years from the console’s purchase date. We will also retroactively reimburse any of you who paid for repairs related to problems indicated by this error message in the past. In doing so, Microsoft stands behind its products and takes responsibility to ensure that every Xbox 360 console owner continues to have a fantastic gaming experience.

If we have let any of you down in the experience you have had with your Xbox 360, we sincerely apologize. We are taking responsibility and are making these changes to ensure that every Xbox 360 owner continues to have a great experience. 

This will take a few days to roll out globally, and I appreciate your continued patience as we launch this program. I’ve posted an FAQ that should address some additional questions, and we’ll update it over the next few days.

I want to thank you, on behalf of all us at Microsoft, for your loyalty.

The tone of this apology feels sincere and skilfully avoids self-aggrandisement or making unconvincing or weak excuses.

Not cheap

This activity will not come cheap either. Reports state that it is expected to cost Microsoft between $1.05 billion and $1.15 billion. That a one followed by nine (count ’em) zeroes. Ouch.

Slimm Says

While it is possible to come up with cunning business reasons for this announcement, this is a great result for Microsoft’s customers. It reaffirms their importance to Microsoft and makes them feel more secure in their current purchase or in making a new purchase.

Customer satisfaction and confidence really is the lifeblood of a company. If a company can keep that, they can survive. Even when a company suffers an ‘injury,’ such as high hardware failure rates, they can survive if they can continue to instill confidence.

I’m impressed with this policy change from Microsoft and applaud it wholeheartedly. I’m still saving up for an Xbox 360 (I was before this announcement) and this only makes my intended purchase more certain.

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