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Wikipedia on xbox

The Xbox 360 video game console is subject to a number of technical problems that can render it unusable. Some, but not all, of these problems are identified as "general hardware failures," and are indicated by three flashing red lights around the power button. Since its release in 2005, many articles have appeared in the media portraying the Xbox 360's relatively high failure rates. The three "flashing red lights" have been nicknamed in these articles as the "Red Ring of Death" (or "RRoD").

In fact, the console displays varying numbers of red lights to indicate different problems, going from 1 to 4 in order of most severe to least. One red light signifies a major hardware failure, for which there is no recovery and the console must be completely replaced. Two means the console is overheating and must be switched off and left to cool. Three, the famous 'Red Ring of Death', means a general hardware failure and the console must be sent to Microsoft for repairs. All four red lights simply means that the console cannot detect its AV cable.

Several video game blogs, newspapers, and magazines (Such as Wired , Kotaku, Joystiq, The Inquirer , GamePro , G4, and several others) reported on an interview by a Seattle PI Reader Blog "Digital Joystick" with a confidential source inside Microsoft by the name "xboxfounder". It reported that this source was a team leader and key architect in the creation of the Xbox and Xbox 360 and a founding member of the Xbox team and has since left the company but maintained close ties to the remaining Xbox team.

The interviews suggest that Xbox 360 units that fail early in their life do so because of problems in the system design, parts supply, material reliability, and manufacturing issues as well as a system not tolerant to faults. These issues were alleged to be the end results of the decisions of management in Microsoft's Xbox team and inadequate testing resources prior to the console's release. Other websites claim the insider's authenticity has been confirmed.

In the early months after the console's launch, Microsoft stated that the Xbox 360's failure rate was within the consumer electronics industry average of 3% to 5%. Nevertheless, Microsoft has not released their official statistics on the failure rate of the various versions of the console; the company's press relations policy is to focus on the prompt resolution of any technical problems. In February 2008 an examination of 1040 Xbox 360s by SquareTrade found a 16.4% failure rate; 171 were returned under warranty as "disabled", 60% of which with general hardware failure.. However SquareTrade also admits that their estimates are likely much lower than reality, due to many owners of failed consoles who are getting them repaired directly via Microsoft, they also note that the consoles were only tracked for 6-10 months, and in the longer term, many more consoles will have failed. This ties in with most other sources claiming 30%-40% failure rates, and 10% on even the more recent models.

On July 5, 2007, the Vice-President of Microsoft's Interactive Entertainment Business division published an open letter recognizing the console's problems, as well as announcing a three-year warranty extension for every Xbox 360 console that experiences the "general hardware failure" indicated by three flashing red LEDs on the console. During GDC 08, Microsoft announced that the "Failure rate has officially dropped".

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