After taking a good sample of SquareTrade warranties, we can report a 16.4% failure rate for the Microsoft Xbox 360.
These numbers represent 171 claims made on a sample group of 1040 Xbox 360 warranties purchased between April 1 and July 31, 2007, shortly after we began offering warranties on gaming consoles. All claims were normal-use mechanical or electrical failures from non-commercial units. No accidental damage issues were included.
PLEASE NOTE: this report only tracks this test group for a period of 6 to 10 months after warranty purchase (ending January 31, 2007). Once this same test group is tracked for 24 or 36 months, the fail rate is certain to go up. Our data shows that failures spike in the third month after warranty purchase but remain fairly steady after that, with only incremental drop-off until the eighth month. This pattern is fairly consistent with all electronics failures.
Also, after Microsoft's well-publicized warranty extension, it is possible some of our warranty owners are not reporting failures to us, but going directly to Microsoft. If so, our 360 fail rate is skewing lower than is entirely accurate.
The sample group includes all three Xbox SKUs available at the time;
• 27 Elites, the 120GB flagship model.
• 57 Core models, the basic package.
• 956 Premiums, the standard 20GB model.
Splitting out the Premium model results in a slightly higher fail rate: 17%. The low volume of Core and Elite warranties/claims (one claim on an Elite, eight on Cores) in the sample group does not make them acceptable statistical candidates on their own.
Out of the 171 claims, 102 were "Red Ring of Death" (RROD) general hardware failures. This represents roughly 60% of all claims, and 9.8% of all warranties in the sample group. It's believed that overheating is the main cause.
Of the other 69 claims;
• 18% were disc read errors.
• 13% were video card failures.
• 13% were hard drive freezes.
• 10% were power issues.
• 7% were disc tray malfunctions.
These would NOT be covered by the extended Microsoft warranty, and are therefore more reliable numbers. Overheating (without a Red Ring error), controller connectivity, and undetermined errors made up the balance of claims issues.
In July 2007, Microsoft announced hardware changes to fix the Xbox's overheating problem. It is unlikely any modified Xbox 360s were a part of our sample group.
Also in July, Microsoft extended their warranty to three years for RROD issues ONLY, with a $1 billion fund set aside to cover repair/replacement costs for "any Xbox 360 console that experiences the “three flashing red lights” error message." We have referred our warranty owners with RROD issues to Microsoft since that time (and offered pro-rated refunds) while continuing to service all other 360 failures within our 5-day turnaround window. Microsoft's turnaround is reportedly anywhere from one to three weeks.
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