Microsoft Out $1.15B On Xbox Warranties As Massive Amount Need Repairs

Microsoft Corp. said it will book costs of as much as $1.15 billion before taxes to extend warranty coverage on its Xbox 360 video-game consoles after an ``unacceptable'' number required repairs.

Any customer whose console experiences a general hardware failure indicated by three flashing red lights will now be covered by a three-year warranty from the date of purchase, the company said today in a statement. Microsoft expects the move to cost $1.05 billion to $1.15 billion in the quarter ended June 30.

The setback may hinder Microsoft, the world's biggest software maker, as it strives to catch up with Nintendo Co.'s Wii, which has outsold the Xbox every month since going on sale in November. Microsoft pledged to make the Xbox division profitable in the year ending June 2008.

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