Microsoft Refusing to Take $10 Million Worth of Defective 360s from EB Oz?
Update 1: Microsoft has responded to our request for a comment.
Update 2: EB Games Australia has commented on the rumour.
Over the weekend, a Kotaku AU reader sent through a chat log containing an enlightening conversation with “an associate of mine who holds a high position within the EB organisation”. According to the log, Microsoft is refusing to take responsibility for its defective consoles, leaving it up to the games retailer to make the best of a crappy situation.
Obviously we’re trying to verify the facts, but for now, there’s no reason not to let you guys know of the potentially nasty relationship that may exist between EB Australia and Microsoft.
The transcript had the following preface:
An associate of mine who holds a high position within the EB organisation (Who wishes to remain incognito) has requested that I send in a paste [of] this chat log that details a stand-off between EB Australia and Microsoft regarding faulty XBoxes.
Mysterious, no?
It gets better, after the jump.According to the transcript, EB Australia has $10 million worth of defective Xbox 360s gathering dust, as Microsoft is unwilling to take them back. As a result, EB is no longer stocking the 360, except as second-hand or pre-owned units. A search of the EB Games website for “xbox 360″ confirms this.
“There have been threats of EB dropping the Xbox range all together,” says the transcript.
To recoup its losses, EB is trying to repair the defective units and offer them as second-hand. However these units are often returned dead, the transcript states. It also mentions that EB lost $85 per console sold once Microsoft introduced the standard three-year warranty, as EB was unable to offer its own.
“Add to this the fact that price matching got really cutthroat during this past Xmas, they were selling far too many units under-cost and getting a bunch back defective, but Microsoft [refuses] to reimburse for,” the transcript says.
“The whole 360 RRoD [has] been extremely costly to EB Australia.”
“Feel free to believe me or not but go and ask a local EB if they have or when they’ll be getting in 360 Premiums again and nobody will be able to give you a straight answer except along the lines of ’sold out’ and ‘don’t know when they’re coming back in’.”
This morning I rang up three separate EB Games stores in and around the Sydney CBD, and all provided a variation of the words “out of stock”. One mentioned that it was waiting for Microsoft to send through more.
If all this turns out to be true, it’s a rather damning look at Microsoft’s commitment to retail, not to mention the reliability of its own console. And a major chain like EB not stocking the Xbox 360, with the potential to pull down all related stock, is a huge deal.
Never fear – we’ll be chasing this up with Microsoft to see what its side of the story is.
Update: Looks like EB still has the Premium listed. Sadly, this doesn’t change the fact that the stores I contacted were out of stock.
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Comments
Funny how it’s suddenly become fashionable to believe every BS insider story as long as it involves MS, why not try to use head before you give such stories credence.
http://www.smh.com.au/news/biztech/faulty-xbox-yarn-is-nixed/2008/01/30/1201369215112.html
I went into an EB store today to buy Xbox 360 premium and was told that due to; quote”90% failure rate we are not stocking, this will probably not be fixed until March” unquote.
My take on it is this, EB sell their own extended warranty – MS announce (in good faith) that on July 5th 2007 that; “The company said it will cover machines that experience such failures for up to three years from the date of purchase” see here: http://www.news.com/8301-10784_3-9740021-7.html?tag=txt
So EB decides that all those juicy “extended” warranties they sold can now be covered by MS rather than their own insurance company (you don’t really think that EB have a bunch of qualified staff actually fixing the units do you?) They are all covered by an insurance company against failure…..
End state:- Went into GAME got a good Deal on the Xbox, extra controller, HDMI and a battery charger.
Lol i know where they are being stored……
Australian post warehouse in wethrill park n.s.w. and omg their is thousands of them. So when I saw that i made my mind up on the spot and bought a ps3, made my life a whole lot easer as i couldn’t decide.
This blog has gotten some mainstream media attention from the Sydney Morning Herald – the link is below:
http://www.smh.com.au/news/biztech/faulty-xbox-yarn-is-nixed/2008/01/30/1201369215112.html
In response to that article, I sent the following to the Sydney Morning Herald (and also thought other users might appreciate this):
Having just read the article “Faulty Xbox yarn is nixed” from January 30 2008 – I have further information with regards to that story.
I purchased an Xbox 360 Pro (as mentioned in the article – the ones with the defects) in October 2006, after my Xbox version one died 3 separate times. Whilst wary about purchasing a 360, it was the only console available, and so decided to buy one. At the time of purchase, an EB Games employee asked if I would like an “extended warranty”, which meant, in his words “that if the 360 fails in the next two years, we’ll replace it with a new one”. Naturally my wariness over the reliability of Xbox products encouraged me to do so. This cost me $85, and covered me for two years from purchase (ie, until October 08).
In the past two weeks, my 360 has been suffering from the “two red light” overheating shutdown. I am not able to play my 360 for more than 5-10 minutes every 6-12 hours, even during the middle of the night when air temperatures are cooler, and not at all during the day. With my MS warranty running out just days before it started (and of course not being covered by the extended 3 year MS warranty due to the fault not being the “Red Ring of Death”), I contacted EB in the belief that they would replace my 360 with a new one.
The response I got was not impressive: EB Games had chosen to refund ALL customers who had purchased the extended warranty, as they had/have been involved in LEGAL ACTION with MS, and as such were no longer able to uphold their end of the deal by providing customers with a new xbox 360.
I was told that there still were no Xbox consoles currently in stock, and that there would not be for at least two weeks – whether this was new or reconditioned models was not specified.
Their “best offer”, as they put it, was to refund me the $85 for the warranty, and offer me a swap on my console for another “seconhand” (read: faulty and repaired) console. I said I would consider my options and get back to them. At this stage I am considering contacting the Office of Consumer and Business Affairs, ACCC and/or legal counsel due to the misrepresentation on the value of the warranty/merchantable quality of the goods, as well as contractual issues surrounding the warranty.
I would be interested to hear whether an EB Games employee has specifically given a false or misleading statement re: Legal action involving MS.
As it is, I do not believe I will engage in commerce involving either EB or MS in the future, and will be advising other consumers to avoid the 360 at all costs.