Microsoft’s gaming chief Robbie Bach in a conference with financial analysts said that every single one of the XBox 360s produced in the last 19 months suffer from a fatal design flaw that could cause the gaming console to fail. “In the past couple of months we started to see significant increases in repair requests and call requests and significant attention from people,” he said.

The good news is, to cover their customers Microsoft has expanded the XBox 360’s warranty from 1 year to 3 years, however the extended warrantly is only limited to hardware failures that cause 3 flashing lights on the front of the machine. Users that wind up being covered under the warranty will get free shipping and replacement (with a refurbished machine) of their XBox 360.

Microsoft did not disclose the exact nature of the problems, but stated that thenecessary design changes were complete and that units currently in stock will be upgraded. They did estimate that in the end repairs will cost the company between $1.05 and $1.15 billion dollars due to the abnormally high return rates for existing consoles, and projected return rates under the new 3 year warranty.

Personally I’m a bit torn, I like to see Microsoft actually coming out and admitting shortcomings, and doing something about it. Granted it took them far longer than it should have, and possibly issues like this could have been resolved sooner and far better, but at least something is being done. Normally we get Microsoft’s typical there’s-nothing-really-wrong attitude.

Apparently complaining until you’re blue in the face really does help sometimes.