In an open letter posted to Xbox.com, Peter Moore has acknowledged the PR nightmare facing the company from an unusually high rate of failure for the Xbox 360. As a result, for the second time in the lifespan of the console, Microsoft is increasing the warranty on the Xbox 360 from one year (previously 90 days) to three years. But as with most things, there’s a catch. In this case, the additional warranty only covers experiencing the "three red lights" issue indicative of a console who’s GPU has separated from the mainboard under extreme heat stress. For all other issues, including general overheating, the warranty remains one year.
As a gesture of goodwill, Microsoft will also be retroactively refunding anyone who has had to pay to have this issue fixed. They’ve acknowledged the changes made to keep this problem from recurring, already seen in some European units with extra cooling support. For more information on what the new warranty covers, what it doesn’t, and how it affects you, Microsoft has posted an FAQ that should answer those questions. Moore did state that the new warranty program will "take a few days to roll out globally", so you may want to wait before swarming customer service people who haven’t heard of the changes. For all of the trouble, you’d think that they’d send people with extreme examples of this problem (such as 11 hardware replacements) a free Zune or something. Or would that be rubbing salt in the wound?