Now, Microsoft has accepted the enormity of the problem. In December 2006, Microsoft extended the console’s warranty from three months to one year but didn’t say how much money that would cost the company. Microsoft won’t say just how many of its systems are bound to be plagued by the visual error message, nor what type of hardware malfunction causes it, though the company can’t pretend it hasn’t long been aware of the problem. Some Xbox 360 owners have returned their consoles to Microsoft for repairs, only to have the system fail a second, third or even fourth time. Gamers have been ranting on online message boards about the Red Ring of Death ever since Microsoft launched the console in November 2005. Xbox 360 models range in cost between $300 and $479. At the same time that Microsoft announced the warranty extension, it said it would ship fewer Xbox 360s during its fiscal year than it had previously expected, decreasing its estimate from 12 million to 11.6 million. In the third quarter, Microsoft’s entertainment and devices business unit, of which Xbox 360 is a part, recorded $929 million in revenue. Microsoft reports fourth-quarter earnings July 19.
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