Three red lights, one billion dollars, no questions asked
Xbox 360 hardware failures acknowledged with a $1.05-1.15B charge and 3-year warranty
The market's verdict: -1.8% on MSFT in the week after.
What actually happened
On July 5, 2007 Microsoft announced a pre-tax charge of $1.05 to $1.15 billion against earnings, a three-year worldwide warranty, and free repairs for any Xbox 360 showing the three flashing red rings of a general hardware failure. Surveys at the time put failure rates anywhere from 23.7 percent to 54.2 percent, numbers the industry usually associates with raffles rather than consoles. The design flaw traced back to launch day, November 22, 2005, and the repair queues ran for years. It remains the most expensive hardware apology in gaming history, and it shipped at no extra charge.
This one is officially acknowledged.
Links
↳ caused by Xbox 360 warranty extension (July 2007)
Timeline
- Jul 5, 2007 Fixed Microsoft shipped a fix.