Two years ago in a desperate quest for supremacy in the gaming console market and in an effort to beat Sony, and then later Nintendo with its Wii console, Microsoft committed itself to getting the Xbox 360 to market some 12 months ahead of the new Sony PS3. It also stripped costs out of the unit in an effort to undercut Sony.
Now it is paying the cost of the failed marketing exercise, after the world's largest software company announced on Friday that it will take an A$1.3 billion to $1.4 billion charge to extend warranty coverage on repairs and replacements. The company said a months-long investigation into an "unacceptable number of repairs" to Xbox 360 consoles has helped it identify several flaws that caused the system to crash—indicated by three flashing red lights on the front dubbed the "Red Ring of Death" by gamers.
