Retailers Estimate that a Third of XBox 360's Suffer Hardware Failure

When it comes to the next generation of gaming, the XBox 360 stands out as the current leader of the industry. It has gotten the most consoles into the hands of the people thus far, with over 10 million sold. It has the largest next gen gaming library, with several blockbuster hits, such as Gears of War. It also has the best online gaming network, available at prices affordable to everyone.

However, not all is good with Microsoft's latest gaming console. The XBox 360 was rushed to the market as the first next generation game console, and the results of this rush are now becoming evident. For months, XBox 360 owners have been disappointed when the turn on their XBox 360, only to to be greeted a red light from the power indicator, which means hardware failure. Concerned by this, DailyTech has done some research and come up with some startling results. They have reported that retailers estimate the XBox 360's failure rate could be as high as 33%, or 1/3 of the consoles in production.

Several big name retailers who offer an extended warranty with their video game consoles, were polled to see how many people bought a 360 with a warranty and how many of those returned the 360 under the warranty. Anonymous EB Games and GameStop employees confirmed that between 30-33% of XBox 360s sold were returned due to hardware failures. The numbers are even more shocking in regards to the initial batch of XBox 360s sent out on the day of the consoles launch, some employees estimate half of the consoles were returned, and some were even dead upon being received. The numbers of returns were so high, in fact, that EB Games and its associated stores raised the price for the warranty and also changed the policy to give customers a refurbished XBox 360 instead of a brand new one.

EB Games is not the only retailer to report this either. Other big name retailers, such as Best Buy and Walmart, have also found similar numbers. A manager of Best Buy stated "We see a ton of [Xbox 360s] come back all the time. We strongly push our customers to buy our service plans no matter what they buy, but it is especially important for them with the Xbox 360."

Microsoft has admitted that there were some issues with the initial batch of XBox 360s. However, they maintain that their consoles failure rate is between 3% - 5% and is well within industry standards. Microsoft refuses to directly comment on the issue, however, they have extended the manufacturers warranty on the XBox 360 from 90 days to a full year and have also added a service telephone line dealing explicitly with the "Red Ring of Death" issue.

When the same retailers were asked about the XBox 360's competitors, the Nintendo Wii and Playstation 3, they said the return rate of those products was far less, they estimated only about 1%.

Hopefully Microsoft will be able to fully address the issue soon. Until then, buyer beware!