Microsoft says it takes customer concerns about Xbox 360 hardware quality "very seriously" but denies there are any "systematic issues" and won't specifically address concerns relating to defect or return rates.
We continue to look into these things very deeply," Todd Holmdahl, Microsoft's corporate vice president of Gaming and Xbox Products Group, told Mercury News reporter Dean Takahashi.
Takahashi pressed Holmdahl on the return rate and what constitutes a normal return rate; how the figures on Xbox 360 compare to Xbox 1; how Microsoft would explain the anecdotal evidence of a high failure rate relative to PlayStation 3 and Wii; defect rates relating to yield; whether yields were good; how poor yields and high defect rates might affect the business model; whether a change of manufacturing partner (Wistron to Celestica) might have been related to product quality; whether a change to 65 nanometer chips will impact quality; whether changes to warranty policy were due to specific problems, like a problem with graphics memory; what the number one reason for a return is; whether, in fact, he could say anything about anything.
In response, Holmdahl stressed Microsoft's pride "in the box" and that people were buying lots of games, accessories and Xbox Live accounts. He then declined to comment on the majority of Takahashi's concerns, with exceptions largely superficial ("Yield is one we focus on very closely." "We continue to redesign the box, continue to drive costs out."). He ultimately denied there were any "systematic issues", with the overriding message quite simple: "The vast majority of the people just love the product, have a great experience with it. When there is an issue, we get on it and address it as quickly as possible."
Microsoft has previously responded to concerns about Xbox 360 failure rates by waiving the cost for repairs on all Xbox 360 consoles made before 1st January 2006. This policy is reportedly no longer in place. Eurogamer regularly receives messages from users concerned that they are being asked to pay GBP 85 to replace their console when it breaks down.
You can read the full exchange between Holmdahl and Takahashi on The Mercury News blog.