Circuits Assembly Online Magazine - Microsoft Blames Xbox Returns on 'Hardware Failures'

REDMOND, WA — Microsoft Corp. Thursday said it will take a minimum $1.05 billion charge to fix Xbox 360 consoles suffering from widespread hardware failures.

The company said an "unacceptable number of repairs" led to the firm identifying a "number of factors that can cause general hardware failures."

In response, Microsoft has improved the console and lengthened its warranty policy for existing and new customers to three years.

In a statement, Microsoft said it will take a $1.05 billion to $1.15 billion pre-tax charge to earnings for the quarter ended June 30 for anticipated costs under its current and enhanced Xbox 360 policies.