Report Claims 16% Failure Rate for Xbox 360; Microsoft Experiencing Hardware Shortage

By Aaron Linde, Feb 14, 2008 12:02pm PST Electronics warranty dealer SquareTrade has estimated the Xbox 360 hardware failure rate around 16%, 1UP reports.

In a sample of over a thousand warranties sold to Xbox 360 owners, the company found that 16.4% of users experienced hardware failure, with some 60% of that number attributed to the infamous "red ring of death."

In response to hardware failure rates—which Microsoft estimates around 3%—Microsoft recently expanded their out-of-box warranty to three years from date of sale. "It is reasonable to believe these failure rates will increase over time since the Xbox 360 failure issues tend to increase with prolonged use where overheating appears the main culprit," said SquareTrade CEO Steve Abernethy.

But widespread reports of the red ring and hardware failure hasn't stymied consumer demand for the Xbox 360, which Microsoft says is in short supply in the United States due to a failure to anticipate strong post-holiday demand.

Microsoft games marketing VP Jeff Bell said that the shortage may have an adverse effect on Xbox 360 sales figures. "You could say we misjudged demand," Bell told Reuters. "We're literally out of stock in many stores... It may cause the overall industry number to be down a little bit."

Bell said that while the shortage may carry into February, manufacturing should catch up with demand in the spring.

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  • I just got stuck on the phone with xbox tech support after ive been having very glitchy playback on my games. The last many months the fan has been making progressively more noise until eventually today my games started freezing on me after a minute or so. Last night i was playing a game and it didn't freeze but it had many visual artifacts on screen. Today Bioshock is just freezing on me a few mins into play. Microsoft support does NOT consider this under warranty because i am not getting the red rings of death. So they basically told me that the fact that its freezing, that the fan is extremely loud, and that there is a burning smell coming from the console doesn't matter. They want to charge me for the service to be done. SHAME on you microsoft! This is a great way to lose a customer who has been buying lots of games!!