OK, but be aware that I'm a physicist by training, so I consider 0.5 to be approximately equal to one.
The stated range of cost for the extension of the warranty was 1.05 to 1.15 billion. I'll take the midpoint of that range, 1.1 billion. A Core/Arcade system costs $280 today, and that includes the cost of the power supply, wireless controller, and memory card. If the cost of just the console is $250 today, and, say, $170 at the end of the warranty extension, then the average cost over the replacement period may be $210. That means that the $1.1B will pay for 5.2 million consoles, which is more than 40% of 12 million. And that's if MS decided to replace all consoles with new ones at some point, which it certainly isn't doing right now.scooby_dooby alluded to that too. Do you have a reference for that? I thought that the $1B was only for the extension of the RROD warranty, but I'm fully prepared to be wrong.
Regarding the cost of repairs, I was going by the fact that in the "early days" of this problem, when the warranty was only 90 days, MS was charging $130 for repairs. I don't think MS was making a lot of profit on repairs, but I doubt that they were being overly generous either. So my reasoning was that if all 12 million consoles failed, about 4 million would fail in the first year, and 8 million would fail in the next two years. Since I was under the possibly mistaken impression that the $1.1B was only for the two years of the extension, I thought it would be enough to cover all expenses related to refurbishment of the 8 million consoles.
Wasn't the $1b split 50/50 to cover existing units and future problems?
Even if the $1.1B was for all warranty expenses past, present, and future, that's enough to refurbish fully 70% of the first 12 million consoles, or replace 40%, as argued above. I'm not sure how you get to 10%.
Whether the real figure is 40%, 70%, or 100%, it's ridiculous. It's a shame, because the software library, Live, Arcade, the controller ergonomics, the hardware scaler, and everything but the reliability are better than the competition. But there's no point in pretending that the massive failure rate of the first ~10 million consoles is unverifiable Internet banter. It's real, and we have plenty of good evidence for it being extraordinarily high, even if we don't know the exact figure to two significant digits.
It doesn't seem to have hurt their sales much, and if MS has their problems fixed, and takes care of existing customers, I will still look to them to be platform provider of choice. I lean toward taking Bill Gates at his word when he says that the current hardware revision is reliable, so that's encouraging.
