Xbox Warranty Extension To Cost Microsoft $1B

Microsoft will set aside approximately $1.15 billion for repairs to Xbox 360 hardware failures under a new warranty program for the gaming console. The company will extend its warranty to three years from the date of purchase for any gamer who experiences the "three flashing lights" error message. All other existing Xbox 360 warranty policies remain in place, the company said. "This problem has caused frustration for some of our customers and for that, we sincerely apologize," Robbie Bach, president of Microsoft's Entertainment and Devices Division, said in a statement. "We value our community tremendously and look at this as an investment in our customer base." Microsoft said it conducted "extensive investigations" into the hardware failures and has made improvements to the console, and will enhance its Xbox 360 warranty policy for existing and new customers. Microsoft did not detail the hardware failures. The company also said it will retroactively reimburse any customer who has previously paid for repair expenses related to the "three flashing lights" error message. The warranty extension comes at a time when Microsoft is competing with top-condenter Nintendo Wii and third-place Sony PS3 for market share in the gaming console industry.