Microsoft is extending the warranty program for Xbox 360 to three years - and promising to reimburse anyone who's already experienced the red rings of death and paid for a repair.
According to Reuters, the company said there have been "an unacceptable number of repairs to Xbox 360 consoles".
So you can now send your console back and have it fixed free of charge for up to three years after purchase. Microsoft will even pay the postage.
All this isn't going to come cheap. The company has earmarked $1.05 billion - $1.15 billion in pre-tax charges for the financial quarter ended June 30 to pay the cost of repairing Xbox 360s.
Peter Moore has issued an open letter to the Xbox community explaining more about the new warranty, and acknowleding that Microsoft has "identified several factors that can cause a general hardware failure indicated by three flashing red lights on the console".
"To address this issue, and as part of our ongoing work, we have already made certain improvements to the console," he continued.
"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."
And that's not all - Moore also said Microsoft will "retroactively reimburse any of you who paid for repairs related to problems indicated by this error message in the past".
"Microsoft stands behind its products and takes responsibility to ensure that every Xbox 360 console owner continues to have a fantastic gaming experience," he concluded.
Robbie Bach, president of Microsoft's entertainment and devices division, also had this to say: "This problem has caused frustration for some of our customers and for that, we sincerely apologise."
For more from Moore, head on over to GamesIndustry.biz to read our exclusive interview.