Microsoft takes $1bn XBox hit DID THIS ONE ALREADY

Microsoft is setting aside a $1bn-plus kitty to deal with malfunctioning XBox consoles. The firm said that the number of problems with the system had been “unacceptable” and it was extending warranties from one year to three on broken hardware to deal with the problem. Some watchers believe the payout to be the biggest of its kind. In Xbox circles, major problems are known as the “three rings of death” or “red rings of death” because three flashing red lights are the gaming equivalent of office jockeys' blue screen of death. Microsoft could lose up to $1.15bn, it said, but in testimony to the software behemoth's all-conquering financial strength, its shares fell only marginally after the announcement.