Microsoft’s X-Box $1billion Support Cost…

I was intrigued by this story. Apparently some X-box owners have had problems with their machines… something about “three red lights” indicating some sort of hardware failure. My take on this story is that Microsoft have actually done a good thing in acknowledging the problem, taking steps to solve it, reimbursing customers who had to get their X-box’s repaired themselves and extending their X-box warranty to three years to cover such failures.

Here’s a quote from the open-letter to X-box customers…

“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.” (source)

According to Yahoo Video Game News, that change will cost Microsoft a billion dollars. (The new warranty will represent a $1 billion pre-tax charge on Microsoft’s earnings for the year’s final quarter). (source)

In my opinion, that’s pretty good customer support… something which may companies, not least in the Internet marketing arena, could learn from. The warranty was originally 90 days, then 1 year, now 3 years. That indicates good company support for the product. There’s more info in a Q+A here.