In the face of hundreds of online complaints, and almost common-knowledge of the "Red Ring of Death" problem, Microsoft has always denied there was a serious issue with the construction of the Xbox 360. Now Microsoft is admitting they performed an investigation into the reasons why so many people were having problems, and as a result are extending the warranty of all Xbox 360 consoles to three years from the purchase date. This means every Xbox 360 console is covered.

Microsoft stands behind its products and is taking responsibility to repair or replace any Xbox 360 console that experiences the “three flashing red lights” error message within three years from time of purchase free of charge, including shipping costs. Microsoft will take a $1.05 billion to $1.15 billion pre-tax charge to earnings for the quarter ended June 30, 2007 for anticipated costs under its current and enhanced Xbox 360 policies.

Microsoft is hoping to gather support in the community by reimbursing all customers for charges due to these failures, even with billion dollar costs expected. It's likely their support will grow, but people may still be hesitant of the hassle involved when purchasing an Xbox 360. Having to send in a console for repair was considered a rare occurrence before the Xbox 360, but knowing that repairs will be covered for 3 years on the most common problem provides some ease of mind.

Microsoft Expands Xbox 360 Warranty Coverage [Microsoft]