The three-year warranty Microsoft offers to cover "red ring of death" hardware failures has been extended to also protect consumers against the similar but equally severe "E74" failures, the company says.
Microsoft concedes that the problem, which confronts consumers with a specific error screen, indicates generally the same kind of hardware failure as the three red rings on the console.
"While the majority of Xbox 360 owners continue to have a great experience with their console, we are aware that a very small percentage of our customers have reported receiving an error that displays 'E74' on their screen," says the company in a statement on its Xbox support site
"After investigating the issue, we have determined that the E74 error message can indicate the general hardware failure that is associated with three flashing red lights error on the console," the statement continues. "As a result, we have decided to cover repairs related to the E74 error message under our three-year warranty program for certain general hardware failures that was announced in July 2007
The extended warranty program offered in response to widespread red ring failures cost Microsoft $1.1 billion
in 2007, although it managed to compensate significantly for those losses in 2008.
Although it's unclear exactly how widespread the E74 error is, an informal poll conducted by consumer weblog Joystiq suggested incidents of E74 saw a 'definite increase'
since the launch of Microsoft's New Xbox Experience in November 2008.
"We have already made improvements to the console that will reduce the likelihood of an occurrence of this issue," Microsoft says.