Good news for Xbox 360 owners plagued by the E74 error, which according to media outlets is related to the AV cable, scaler chip, or GPU – Microsoft is extending your warranty for it!:
While the majority of Xbox 360 owners continue to have a great experience with their console, we are aware that a very small percentage of our customers have reported receiving an error that displays “E74” on their screen. After investigating the issue, we have determined that the E74 error message can indicate the general hardware failure that is associated with three flashing red lights error on the console. As a result, we have decided to cover repairs related to the E74 error message under our three-year warranty program for certain general hardware failures that was announced in July 2007.
I’m a two-time victim of the infamous ‘Red Rings of Death,’ though I will say that I was very impressed with Microsoft’s (MSFT) servicing of my Xbox 360. It’s good to see Microsoft stepping up and taking responsibility for hardware failures past the unit’s original warranty.
The E74 and RROD issues illustrate the risks of producing game consoles, which except for the Nintendo Wii carry low or even negative gross margins. Breaking even on a console sale, and then having to incur shipping, repair, and component replacement costs, is a relatively easy way to lose money. I’ll discuss this issue further in an upcoming article, but it really makes me question why the heck Microsoft is in the hardware business.
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