Microsoft has extended the warranty on its Xbox 360 video game console to three years from the date of purchase following a large number of problems with the console and "an unacceptable number of repairs", costing the company more than one billion US dollars.
The fault, which has been dubbed the "red ring of death", causes the console to fail completely. 
In an open letter to owners of the Xbox 360, Peter Moore of Microsoft said, "As of today, all Xbox 360 consoles are covered by an enhanced warranty program to address specifically the general hardware failures indicated by the three flashing red lights on the console. This applies to new and previously-sold consoles." The extended warranty covers repairing and shipping of the console and the company has promised to reimburse those owners who have already had to pay for repairs.
Microsoft has not released details of the number of units that have suffered from the problem but has said it is "bigger than we are comfortable with".
The Xbox 360 was launched by Microsoft in 2005 and in January of this year the company lowered its sales expectations to 12 million units for the year ending June 2007. 
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Microsoft extends warranty on Xbox 360 following an "unacceptable number of repairs"