Microsoft Xbox 360 Least Reliable Console, Report Finds

A report from independent warranty provider SquareTrade, which analyzed failure rates for over 16,000 new game consoles covered by SquareTrade Care Plans, found Nintendo's Wii is four times more reliable than Sony's PlayStation 3 (PS3) and nine times more reliable than Microsoft's console platform, the Xbox 360. When looking at the first two years of ownership, 2.7 percent of Wii owners reported a system failure to SquareTrade, compared with 10.0 percent of PS3 owners, and 23.7 percent for Xbox 360 owners.  

To determine failure rates, the company included all malfunctions reported in the first 24 months after the system was purchased. SquareTrade further examined Xbox 360 Red Ring of Death (RROD failures) separately from all other failures, as Microsoft has guaranteed to replace or repair any Xbox 360s experiencing the RROD failure for three years. With nearly one in four systems experiencing a reported failure over 24 months, the company found the Xbox 360 to be historically the least reliable of the three game systems.  Just over half of these failures were a result of the RROD issue.

While the RROD problem continued to be the major issue for Xbox 360s purchased through 2008, the report said early indications point to the problem abating in 2009. SquareTrade drew two conclusions from the console's poor, but improving, performance. "It's worthwhile considering that Xbox 360's failure rate drops to 11.7 percent when you exclude RROD, which then puts it on par with the PS3," the report reads. "If the RROD issue were resolved, we would anticipate future Xbox 360's to be only slightly less reliable than the PS3."

Second, the report suggests Microsoft's policy may result in an underreporting of failures by Xbox 360 owners to SquareTrade, relative to the other two consoles. Because the RROD problem is so widely known to be covered by Microsoft's warranty, we believe that more customers bypass SquareTrade and reported failures directly to the Microsoft.  In a survey of SquareTrade customers with Xbox 360s conducted by e-mail, SquareTrade found that over half of their customers who experienced a RROD error reported their problem directly to Microsoft without contacting SquareTrade. 

The report notes e-mail survey respondents tend to be a self-selecting group, and cautions the data should be used directionally rather than definitively, particularly because SquareTrade did not survey PS3 and Wii owners with the same question. With that caveat in mind, applying the survey data to the analysis shows that the Xbox 360 failure rate could be as high as 35 percent.

Interestingly, while Microsoft initially claimed in February 2007 that the "return" rate on Xbox 360s did not exceed 3-5 percent, they later published an open apology on July 5, 2007 and announced a $1.15 billion fund to be set aside for Xbox 360 repair and replacement. The report argued the money would fund repairs for up to 2.5 million consoles, and thus implicitly anticipated a far higher rate of failure than their stated 3-5 percent.

The most common types of problems reported with the PS3 and Xbox 360 were disc read errors and output issues. The Wii had more power and remote control issues than the other two systems, SquareTrade said. "Of the three major 7th generation game consoles, we can safely say that the Wii is the most reliable system on the market, with just one-fourth the malfunctions of the PS3 and Xbox 360," the report concluded. "Even when adjusted for the lower rate of usage, the Wii leads the pack by a comfortable margin."