Was watching CNBC today and a headline was talking about the recently announced "billion dollar effort" in the Xbox and questioning "Should Microsoft Dump the Xbox?". I didn't catch the actual story, but I think the obvious answer here is a negative. For those that don't know, the "billion dollar effort" is an amazing announcement by Microsoft, by way of Xbox honcho Peter Moore, that Microsoft was now retroactively extending 360 warranties to 3 years and paying back customers that have had to pay in the past for the fix to the "red ring of death", plus implementing the fixes into new manufacturing processes. This is "bad news" for Microsoft, from the business/shareholder view point, that warranted a full apology and the mention of an estimated price tag of "over 1.5 billion dollars" (estimated by Microsoft). This isn't the result of a class action lawsuit and it appears to be a carefully calculated move here. It's a move that I think is obviously a sign that Microsoft really does believe in the Xbox 360, now at least if not before.

This marks the second occasion that Microsoft has seen fit to retroactively extend warranty service. The first was followed by major announcements and increased sales growth. This one is way too conveniently timed "cleaning the skeletons out of the closet", right before E3 and major announcements of what already looks to be a huge Fall and Spring season for the 360. (Bioshock and Mass Effect both are tantalizing their intended segments already.) Plus this "bad business news" is great news to existing owners and huge news to prospective consumers as the red ring of death was one of the few remaining excuses some people had from buying a 360.

I'm expecting major announcements soon and I (cynically, perhaps) don't think Microsoft would be making this sort of announcement if they were planning to abandon the Xbox. It seems a resolute admittance that they are indeed sticking with it.