Space Ramblings

The High Cost of Console Wars

The PS3 vs Xbox showdown has proven to be almost as destructive to the companies involved as HD DVD vs Blu Ray. The resulting showdown didn’t create a winner, so much as it created two losers as Microsoft and Sony overburdened their consoles with expensive parts while Wii stole the game out from under them by focusing on a single simple gimmick and undercutting their prices.

Of course the PS3 vs Xbox showdown was itself an outgrowth of the Blu Ray vs HD DVD showdown, giving Sony and Sir Howard Stringer two disasters instead of one and meanwhile the full scope of the disaster has yet to be unveiled. Consider the following from Daily Tech.

Microsoft has said before that its Xbox 360 failure rate falls within three to five percent, what it believes to be well within industry standards. Internet reports from Xbox 360 owners, however, suggest that the failure rate is much higher than that.

EB Games held conference calls for its Canadian stores informing them of the new policy changes and revealing alarming failure rates of the Xbox 360. “The real numbers were between 30 to 33 percent,” said former EB Games employee Matthieu G., adding that failure rate was even greater for launch consoles. “We had 35 Xbox 360s at launch I know more than half of them broke within the first six months (red lights or making circles under the game discs). Two of them were dead on arrival.”

All you can say is ouch. That and it sucks to be an early adoptee. If a third of xBox’s have really failed, then we’re looking at a massive disaster. And more proof that Microsoft shipped a badly flawed system out of the gate and one that failed to cool the system components properly, likely because Microsoft failed to test it properly but then again Microsoft never does things on time.

As a result of the high failure rate of the Xbox 360, EB Games corporate nearly doubled the prices of its one-year, over-the-counter warranty. While the previous warranty would give a customer a brand new console in exchange for the broken one, the new policy now states that the customer will receive a refurbished console instead. The move was made because it was becoming too costly for the retailer to give the customer a brand-new machine, which still carries a store cost close to the MSRP.

So basically, EB found another way to screw customers but not before they got screwed thoroughly themselves when a warranty scam that was meant to pick the pockets of customers, instead turned around them.

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