Redmond (WA) - During a conference call to discuss the new warranty initiative, Microsoft said it fell short of its fiscal year goal of 12 million Xbox 360s by the end of June.

Today, Microsoft announced that it is extending the warranty on all Xbox 360 units from one year to three years.  Just eight months ago, the console's warranty was pushed up from 90 days to one year.

In its conference call, Microsoft said this decision was "completely voluntary" and motivated by a devotion to customer service.  It may also be a move to try to increase hardware sales, as the company fell behind its expectations.

Microsoft, which has a fiscal year period ending on June 30, predicted total sales of the Xbox 360 to be 12 million by the end of last month.  Today it was announced that the actual number is around 11.6 million.

That's not a huge loss by any means, but it does underscore the unexpected boom in sales of Nintendo's Wii console over the past eight months, which have chipped away at the Xbox's next-gen market share.

Microsoft says the new warranty will have no impact on its fiscal year 2008 projections, even though it estimates the cost of the initiative to be as much as $1.15 billion.

President of the Xbox division Robbie Bach also took the opportunity to describe Microsoft's E3 lineup as "one of the best if not the best in history."  While there's obvious marketing speak at play here, that's a cockier statement than the company has made in the past.  E3 kicks off next week, with Microsoft's press briefing officially starting the event on the evening of July 10.

When ...

Jul 05, 2007 18:07     

When will they drop the price of the 360 or release the next gen of the 360. I want HDMI and HD-DVD together. and i want it now. :P
Wants report abuse vote down vote up Votes: +0

if you are wondering why, this little girl will tel...

Jul 05, 2007 18:19     

if you are wondering why, this little girl will tell you http://www.youtube.com/watch?v=GQ3umqjzJSU&mode=related&search=
David report abuse vote down vote up Votes: +0

@Wants

Jul 05, 2007 18:38     

Me too. If the Xbox 360 had HDMI and HD-DVD and a price point of 199$ i would buy one now!
Eduardo report abuse vote down vote up Votes: +0

Me three

Jul 05, 2007 22:13     

...and a BR player, and a motion controller, and a built in 40in HDTV, and wheels with motors that could follow me everywhere I went, and a Roomba, and a kitty litter box, and a....
nvalhalla report abuse vote down vote up Votes: +0

@Eduardo

Jul 06, 2007 02:09     

LOL $199 for an xbox360 with HDMI and HD-DVD. That's truly wishful thinking. At that price point I'd get one for T.V. in the house :).
Ezg report abuse vote down vote up Votes: +0

man in all seriousness... if i could buy an xbox 3...

Jul 06, 2007 02:11     

man in all seriousness... if i could buy an xbox 360 with hdmi and hddvd and bluray and wifi and 4 controlers with a bundled game for 199$ id totaly buy it. /sarcasm PLLLLLLEEEEEAAAASE... hddvd player for 199... and you want the whole system for that price? might as well ask for a nintendo DS what turns all the games inserted to bricks of platnium... for 5$
Kyle report abuse vote down vote up Votes: +0

To to pull 360 off the market...

Jul 06, 2007 19:06     

I had the choice of buying a 360 or a PS3[Already have a Wii]. I went through THREE defective 360's, each having different problem, including one that wouldn't power up[reminds me of the early days of the first Playstations that would overheat and fry themselves]. After the third I just decided to call it quits and get a PS3. A friend offered to install a 160GB HDD, so I let him. I've got to be honest, the PS3 is a sweet machine. I've decided not to bother with another 360. I only wanted it for Halo3. Just not worth it! The Wii still kicks them both right in the "jimmies", yet the PS3 is still kick "A". Microsoft uses a flawed business model and it shows. Vista has all sorts of issues[they released a beta OS for the third time in a row], and they are STILL having a high turn around on defective 360 systems after more than a year after release. Microsoft has lost it... End of story...

lexluthermiester report abuse vote down vote up Votes: +0

Umm wait up

Jul 09, 2007 10:14     

As far as I can see the Wii is definitely the winner here. Unfortunately, regardless of the 360 woes, in regards to the software library the 360 is kicking "A" here. If you haven't noticed alot of Sony's exclusives are coming to the 360, including we get GTA 4 prior to the PS3 even getting it. That is a strong message from the game developers telling Sony that their system sucks and that it is hard to program for. Remember it isn't just us the gamers that make these systems survive, it's the exclusive titles too, and if Developers walk to Microsoft's court and abandon Sony then Sony still loses the war regardless of anything else. That's just how the business model crumbles for Sony. You think the corporate shakedown was a ruse? Come on, they fired Kutaragi cause of his complete and utter failure to deliver. Now they have a software guy running the show, not a hardware guy...umm sounds like a Sega to me.

Steve report abuse vote down vote up Votes: +0

Sales have just really slowed down

Jul 10, 2007 08:11     

360 sales have really slowed down over the past couple of months. The Wii will surpass it shortly. As for the PS3, it has a lot of catching up to do. Both Microsoft and Sony need to step it up or Nintendo will emerge victorious. Halo 3 will definitely help them out, but what will they do after that?
Justin report abuse vote down vote up Votes: +0

@ Steve

Jul 10, 2007 16:05     

I thought Kutaragi resigned and wasn't fired... Anyway... I wonder what the 360s sales will look like after all the Halo 3 buzz has settled down. I'm sure it'll sell a lot of systems. But do they have enough really great games to sell systems?
RdwngsFn81 report abuse vote down vote up Votes: +0

It's going to be close 3 way tie in 4 years

Jul 12, 2007 14:25     

mass effect looks like a system seller as well, I do plan on getting a PS3 though, I'm so sick of M$ fanboys repeating the spoon-fed micros**t that M$ make them eat after they've bent over. I don't like the Sony fanboys make-believing that their PS3 is a supercomputer with it's 256MB of ram either. They both play games I also think M$ is regretting their "buy a X360 and a Wii instead of PS3", most people just ended up buying Wii. Remember once M$ gets a monopoly they stagnate, competition is what I want as a consumer: better systems, cheaper prices, and more fun.

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