Microsoft loses $1 billion for 360 repairs

Microsoft is taking a charge of more than USD 1 billion in the most recent quarter due to the cost of a new extended warranty program for the Xbox 360.

According to a Reuters report, Microsoft cited "an unacceptable number of repairs to Xbox 360 consoles".

Microsoft expects to charge between USD 1.05 and 1.15 billion before taxes for the quarter ended June 30.

The company said that customers who experience general hardware failure indicated by three flashing red lights will now be covered by a three-year warranty.

Microsoft did not confirm or deny earlier reports that a design flaw was to blame for overheating, or that it had made internal changes to the Xbox 360 to add a new heatsink.