Microsoft says it has since made improvements to the Xbox 360 to reduce the likelihood of the hardware failure, indicated by three red flashing lights, and the result of "a number of factors".
Given the highly competitive nature of the gaming console market, this is definitely a good move on Microsoft’s part. So many companies focus on grabbing new customers, and not keeping the existing ones happy. Meanwhile, these existing customers are the ones who will recommend one console over another to friends and family; and even spread the word through online means, like social networking 'sites.
What's more, with Nintendo’s Wii leading the market; and Sony having just dropped the price of its PlayStation 3 console to be in line with the Xbox 360 Elite, this is perfect timing for Microsoft to step up. Sure, it’ll cost the company financially. But can you put a price on pleasing your customers?