Everyone I know has gone through a handful of 360's and the fail rate is 100% because every console suffers from the same problem, just a matter of time. All I hear on the internet is how so many 360's red ring and I wouldn't normally believe such a high failure rate if my real life friends 360's havn't all died. Some of them got so fed up with being scared their console would red ring that they just got rid of them all together and bought a PS3 or just stuck with PC.

Like I don't see how Microsoft can make any money when they have to constantly be replacing 360's :\ Surely it would just be cheaper if they just made better hardware.

They got rid of them because they were scared they would red ring? Idiots. As high as a rate it is, it's not 100% you know. They really wouldn't be making money if it was. Don't believe everything you read on the internet. Or anywhere else for that matter, including your newspapers and history books. People who have the issue are more likely to go online and whine than people who are having fun playing games, you know?

It has not got a 100% failure rate, I doubt very much that's the case. There are still those with launch machines that work fine. The fact is Microsoft do not publish that information, and likely with good reason as I am sure it must be damning. The failure rate is undoubtedly high, but it's not as high as that.

They are making money, but nowhere near as much money as they would be making if not for the failure rate. They make the money in licensing, XBL subs and first party software from their prime studios, but the fact of the matter is they lose vast sums in the fault prone hardware. The new warranty scheme in place takes vast chunks out of their profit margins, but it is essential, because it ultimately secures Microsoft's next console success.

The 360 is a awesome console despite it's problems, it has a firm sizable userbase and fantastic software library, it also has the best online service. The fact that it's much loved despite the continual woe it can create for it's users, bears testament to the quality of it's positives.

You can be darn sure Microsoft's next console will not suffer the ills of the current console, I imagine it will undergo a rigorous degree of testing before it's put onto the market and will make vast sums of money on the back of the 360.

I just love it when people pull random statistics out of their ass.

100% of people who use statistics without a source are lying.

See what I did there?

My (near launch) xbox is dead but as soon as I've send it in I will get a new one and my other has been going on for about 2 years.
My friend has a launch one that haven't died yet and so on.

And yes, MS is making a lot of money on the 360 :P

The failure rate is about 1/3rd.  That is a ridiculous number for any consumer product.  However, that means that 2/3rd don't fail.

"I just love it when people pull random statistics out of their ass.100% of people who use statistics without a source are lying.See what I did there?"

Not to mention that if your 360 does red ring within the special red ring warranty then you just send it away and microsoft fixes it for free, postage paid

"Everyone I know has gone through a handful of 360's and the fail rate is 100% because every console suffers from the same problem, just a matter of time."

Take it to the gamespot system wars. Your fanboyism is not wanted here.

I believe they have lost around a billion from hardware failures

They also stated at E3 that hey had made over a billion in xbox live subscriptions, marketplace DLC and the likes.

That and the games per console rate is higher than any other console

So yeah, it all balances out me think

Microsoft don't make any money on Xbox 360 hardware anyway, it is sold at or near Break Even (And often at a loss).

They make money on software.

100% of people think Roller Coaster Tycoon sucks.

Yeah, Microsoft makes tons of dough.

"100% of people think Roller Coaster Tycoon sucks.Yeah, Microsoft makes tons of dough."

There are numerous things to consider:

1. The market share and brand identity gained by placing their product on the market around a year before any of the other ones (plus the profits from those sales).
2. The amount of people who have bought, re-bought, and bought 360s yet again simply because of their investment in their game collections and friends on Xbox Live. 
3. The amount of revenue brought in from Xbox Live subscriptions.
4. The amount of revenue brought in by advertisements on the dashboard and elsewhere.
5. The ridiculous Microsoft Point system that almost always gives them leftover money that will just sit there for long periods of time as opposed to wii points and PSN stuff that will let you buy in exact amounts.
6. Microsoft's movie and TV show system (which does fairly well, I think).

Well, my launch system 360 is still going strong. And last I read Microsoft was indeed making money off each unit sold; with any losses due to returns accounted for. Microsoft wrote off a $1 billion loss to cover the RROD problems already, so any returns now would be accounted for. But as posters above have already explained, most money in the home console market comes from licencing and some from accessory sales.

"There are numerous things to consider:

1. The market share and brand identity gained by placing their product on the market around a year before any of the other ones (plus the profits from those sales).
2. The amount of people who have bought, re-bought, and bought 360s yet again simply because of their investment in their game collections and friends on Xbox Live. 
3. The amount of revenue brought in from Xbox Live subscriptions.
4. The amount of revenue brought in by advertisements on the dashboard and elsewhere.
5. The ridiculous Microsoft Point system that almost always gives them leftover money that will just sit there for long periods of time as opposed to wii points and PSN stuff that will let you buy in exact amounts.
6. Microsoft's movie and TV show system (which does fairly well, I think).

So while the 360's red ring issue might cost them a shit ton of money, and while I have no *real* knowledge of the profit margins brought in by each of these factors listed above, in my opinion I would hazard a guess that overall, the 360 has been a very successful platform for Microsoft, and quite possibly a profitable one as well."

Funny how the OP is being attacked for speaking the truth. If you buy a product that you know that will fail you are either rich, and you don't bother about spending, or just dumb. And The 360 doesn't have the best games, the PS3 lineup is better.

100% of 360s will fail? lol okay lets just assume that no system has been upgraded with better components smaller components...ect even with ignoreing that fact 100% of systems wont fail because all of them would have failed by now, Don't use the word eventually because if you say that then every system fails in this regard every system eventually will fail.

Now lets unignore the fact that the systems made today are far different then those originally made and we have an whole other reason that 100% of systems won't fail, all so last i checked microsoft was making a profit since 2008 on each system sold they aren't just breaking even now they are infact selling at a profit.

they make money since it cost less to make the 360 than what there selling it for

You know what, you guys.  Go to any reputable repair store any you'll get the truth.  100% of 360's have the same problem...It's simply a matter of usage.  Some people don't play for more than 2 or 3 hours at a time.  At that rate, if the console's kept ventilated, it might never die...who knows.

I had....had an xbox manufactured on march 2008, better heatsink and the like.  Guess what,  May 2009 I got the E74 red light.

The repair store in Calgary AB, literally gets 1 xbox / day to repair due to the red light error.  360's are beginning to be made substantially better but the failure rate is still 100% with consumer care and usage being the only variable to the postponement of a hardware failure.  We'll see how long my replacement, from microsoft, lasts.  This time I'm going to cut myself off after a couple hours, to let it cool.  That's the only way to maintain it's life.....Even so, I still have my doubts.

When Microsoft take the time to actually construct a console that wont brake in a couple of months, ill actually go out and pick up some 360 games, until then, even the Wii is in higher regard for me.

-- God Bless.

I bought my 360 last year and it's still working fine.

I'm pretty sure I read somewhere that they make a profit from the high attach rate of games.