Xbox 360

Online warranty company SquareTrade.com sent me an e-mail today claiming that, based on a survey of more than 1,000 Xbox 360 warranties sold through the site, Microsoft's console has a 16.4 percent failure rate.

Of those failures, the fabled Red Ring o' Death accounted for 60 percent of the problems.

I'm actually a little surprised that it was only 16.4 percent, but SquareTrade doesn't say how long it's been selling warranties.

Because I suspect the failure rate for the first batch of consoles sold in late 2005/early 2006 was pretty close to 100 percent.

Also, I highly recommend this article from an anonymous source claiming to be a Microsoft insider. Again, it's anonymous, but it has the ring of truth.

Sure it's a dying format, but the purchase includes five free HD-DVD movies, so you're practically getting the player for free.

Interesting discussion over at Engadget about an apparent shortage of Elite consoles.

There's plenty of rumor-mongering, if you're so inclined (which I am).

My favorite theory is that Gates was all set to announce at CES a new Elite model with a built-in HD-DVD player. But the last-minute Warner defection to Blu-ray effectively neutered HD-DVD and Gates quickly pulled the plug on the HD-DVD Elite.

So now retailers have been clearing their shelves of the old Elite, but the new model with HD-DVD player never came along to fill the hole.

Or maybe there is no shortage.

Microsoft just announced its second quarter financial results, and there are lots of interesting tidbits to comb over in the report from what's still probably the most influential technology company in the world.

But let's focus on the Xbox stuff.

For example:

Exiting the calendar year, the life to date sales of Xbox 360 consoles reached 17.7 million units, representing a 70% increase from the prior year.

As near as I can figure, the original Xbox sold about 24 million units over a four-year lifespan. Since that 17.7 million Xbox 360 sales figure is essentially over two years (end of 2005 to the end of 2007), you double that number and get 35 million or so over a four-year period.

So the 360 is definitely selling better than the original Xbox, and Microsoft has to be happy about that (even if the Wii is eating the 360's lunch).

Also, Microsoft reports that its Entertainment and Devices division (which is mostly the 360, but also includes the Zune and other assorted misfit gadgets) had sales of nearly $3.1 billion in the second quarter, up from $2.97 billion a year ago.

But the unit also reported operating income of $357 million, compared to a $302 million loss in the same quarter last year.

What happened in the second quarter (actually, the last three calendar months of 2007) to boost revenue and income? Halo 3, of course.

In fact, the quarter after a Halo release has generally been the only time the Xbox division could count on a profit since the original box's release in 2001.

Microsoft obviously wants to see more consistency out of the Entertainment and Devices division. But the company can afford to shovel money into the segment for as long as it wishes.

After all, Microsoft's overall quarterly profit was $4.71 billion.

That pays for a lot of RRoD repairs.

What a fiasco. Granted, in the big scheme of things, it's just a game console.

But it's a game console that people have spent hundreds of dollars to buy, and invested hundreds more in games and peripherals.

Microsoft is acting extremely dishonorably, and is doing untold damage to its brand with this kind of shoddy treatment of its customers.

UPDATE: I see from the comments that I have not been clear on what I'm complaining about. Yes, Microsoft is fixing the broken consoles. But the problem is that Microsoft is apparently taking WEEKS to do so. To those readers and commenters who feel I'm being unfair to Microsoft, ask yourself this: If your console had broken down for the second (or third, or fourth, or worse) time, and each repair took weeks to complete, and you kept receiving malfunctioning units back from Microsoft, would you feel that Microsoft had done a good job taking care of you, the customer? Or would you feel that they were doing the absolute minimum to avoid a class action lawsuit?