[quote name='jollydwarf']I think It's more along the lines anyone that purchases the next XBox is *almost guaranteed* to purchase a warranty, whether from Microsoft or a retailer, so MS will make more cash next round from all the warranties if they manage to have little problems next time around.
See, I tend to think a lot more people will just sit on the sidelines and take a wait-n-see approach than would hastily "Jump In" again with the added expense of a PRP or extended warranty. Or maybe they'll pass altogether. If Microsoft senses that another console won't make them profitable, why would they even go ahead with it? Their primary advantage is that the PS3 really hasn't caught fire...yet.
I don't believe too many people here would dispute that as the life cycle of the 360 goes on, the failure rate will approach 100%. It will be interesting to see how they assuage the fears of gamers, both hardcore and mainstream, if and when the next console approaches. It would be a big help to start the turnaround NOW.[/QUOTE]
It's kinda sad that people see the extra expense unnecessary when it only costs $18 and up to protect the system for another 2-3 years, and by then the system is a lot cheaper (and perhaps has more added "features") that make it easier to swallow.
I severely doubt MS is going to pull the plug. They already posted a profit the last quarter despite the extended warranty cost, and they obviously want to this in the long run for market domination. If they can grab second place ahead of Sony without much issues it would be a sure success, on the other hand nothing is going to top the Wii, that will have to wait till next gen.