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These allegations were investigated and were deemed to be true. Microsoft had spent limited amounts on testing resources and clearly knew there was a problem with their units before release.
After a lot of problems began to surface (especially the RROD), Microsoft released a statement saying that the failure rate of the 360 was within the electronics industry standard of 3%-5% however they did not state the failure rate of individual console versions. For example the 'Xenon' motherboard used in some of the xbox 360's had a failure rate as high as 33% much higher than their supposed 3%-5%. Early in 2008 1040 Xbox 360's were examined by Square Trade and they found an astonishing 16.4 failure with these consoles, as you would expect the RROD xbox 360 was the main problem.
Initially the xbox 360 only came with a very limited warranty of 90 days, however due to public pressure, in July 5, 2007, Microsofts vice president said that they would extend the warranty of their xbox 360 due to the number of problems that there were with them, now the warranty has a 3 year extenstion so if you have any problems ,especially the RROD then you can return it to microsoft for them to repair the problem.
There in lies another problem however, there is a long wait when you return your xbox to be fixed due to the amount of consoles they have to repair and the sad thing is that you may have to get it repaired multiple times!
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