No More Xbox 360 HD DVD Players

As if we didn't expect this: Microsoft says it will no longer produce HD DVD players for the Xbox 360. However, according to Reuters, the company will continue to service the ones that have already been sold, honouring the warranty agreements.

Currently, the hard cover book-sized HD DVD player for the Xbox 360 sells for about $130, but that price is likely to come down very soon.

The fact that Blu-ray has won the high-definition DVD format war could very well affect the gaming market. Without the option of an add-on player, Sony's PlayStation 3 has a serious advantage over the Xbox 360. It's obvious that Microsoft sees this advantage, given that it recently dropped the price of the Xbox 360 console by $50 in order to better compete in the market. (It's worth noting that both consoles, as well as the Nintendo Wii, are selling very well).

But when I think about it, will HD movie watching really have that much of an effect on the sale of these consoles? Most people I know that watch Blu-ray movies using the PS3 didn't buy the PS3 for that purpose: it was just an added benefit. And a smart one at that. But I don't think the built-in Blu-ray player will be the deciding factor between an Xbox 360 or a PS3. The games and the overall gaming-related experience is what will make the difference. The Blu-ray functionality is just icing on the cake. With that said, it is some pretty tasty icing.

There is still no word on whether Microsoft plans to launch a Blu-ray player for the Xbox 360, but I wouldn't be surprised to see one surface in the future.

Microsoft Extends Xbox 360 Warranty in Wake of Too Many Returns

It’s always nice to hear about a company taking charge to rectify a product issue. Microsoft says that the number of Xbox 360 returns due to hardware failure has been "too large", and therefore, is extending the product warranty to three years. Additionally, the firm will reimburse customers who have already paid to repair a “three red light flashing error” on the gaming console. According to Reuters, the charge will cost Microsoft upwards of US$1.05-1.15 billion, before taxes.

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?