ozmanjusri's Journal: XBox 360 Fix Will Cost $1.15 billion.

Microsoft has admitted that the XBox 360s' "Red Ring of Death" is a real problem, and has set aside more than a billion dollars for warranties on the troubled console.

In what is likely to be the largest warranty payout of all time, Microsoft will repair or replace all failed consoles, reimburse customers who have already paid for repairs and extend the warranty from one year to three.

"This problem has caused frustration for some of our customers, and for that we sincerely apologize," said Robbie Bach, president of Microsoft's entertainment and devices division.

Microsoft is not stating the rate of failure for the consoles, but the amount put aside suggests the company believes one in four XBox 360s will fail.
http://www.latimes.com/entertainment/news/business/la-fi-xbox6jul06,1,4761516.story?coll=la-headlines-business-enter&ctrack=1&cset=true