A surge of recent negative publicity over the reliability (or lack thereof) of Microsoft’s Xbox 360 has been causing more than a few headaches at the Redmond-based corporation. Indeed, recent reports have suggested that an increasing number of the consoles are suffering from video failure, while others claim that over 30% of the machines are surrendering to the fatal Red Ring of Death.

So far, Microsoft’s policy on the issue of malfunctioning 360 units has been straightforward and - in the eyes of many gamers - frustratingly blinkered: deny there’s a problem, and extend the original 90 day warranty to a whole year. "We don’t have a high defect rate," claimed one statement released by the company in early June. "The vast majority of people are really excited about their product, and that we are targeting profitability for next year."

Now however, in what is being seen as a bid to counter the poor publicity surrounding the issue, the one year warranty has been lengthened to three years. From now on, if a console gets three flashing red lights (a.k.a, the Red Ring of Death), it will be covered by a three year warranty from the date of purchase, with repair and shipping costs also fully taken care of. On top of this, Microsoft is willing to reimburse anybody who has previously paid for RRoD repairs.

The company claims the new warranty and its offer to compensate current 360 owners for previous repairs will cost it between $1.05 billion and $1.15 billion, though this is arguably a price worth paying in the long run, if consumer faith in the high definition console is restored. Better still, Microsoft reckons it may have successfully identified the reason behind the RRod, but we’re not holding our breath just yet, chaps.

"The majority of Xbox 360 owners are having a great experience with their console and have from day one," said Robbie Bach, president of Microsoft's Entertainment & Devices Division. "But, this problem has caused frustration for some of our customers and for that, we sincerely apologize. We value our community tremendously and look at this as an investment in our customer base. We look forward to great things to come."