Microsoft Corp. said on Thursday an unacceptable number of repairs to its Xbox 360 will force it to take a charge of more than $1 billion for its most recent quarter, and it announced a new, extended warranty for the video game console.
The announcements come amid mounting complaints about Xbox 360 failures on the Internet. Microsoft said it had investigated the sources of hardware failures indicated by three red flashing lights on the console and had identified a number of factors that can cause such failures.
Microsoft said it would extend warranty coverage to three years to cover the problem and would reimburse customers who had previously paid for repairs related to the three-flashing-lights error message.
Microsoft also said it has made improvements to the Xbox 360 console.
The charge will be in a range of $1.05 billion to $1.15 billion, before taxes, for the quarter ended June 30, Microsoft said.
Microsoft shares dropped slightly to $29.81 after closing at $29.99 on Nasdaq.