According to research by the gaming blog Joystiq, a mysterious new error has been affecting the XBOX 360. The “E74” error, according to some non-scientific data compiled by the blog, has been increasing since the debut of NXE (New XBOX Experience). Now Microsoft is acknowledging the error and extending their 3-year Red Ring Of Death warranty to cover it.

Microsoft says:

While the majority of Xbox 360 owners continue to have a great experience with their console, we are aware that a very small percentage of our customers have reported receiving an error that displays “E74” on their screen. After investigating the issue, we have determined that the E74 error message can indicate the general hardware failure that is associated with three flashing red lights error on the console. As a result, we have decided to cover repairs related to the E74 error message under our three-year warranty program for certain general hardware failures that was announced in July 2007. We have already made improvements to the console that will reduce the likelihood of an occurrence of this issue.

Further, Microsoft says they will refund he amount their customers paid for an out of warranty repair due to the e74 error message, and that no action by consumers is necessary. If you paid for this issue to be repaired you should automatically get a refund within 4-12 weeks.

If you don’t get your refund by July 1, 2009, Microsoft says that you should contact them to file a claim.

Description of the E74 error message warranty extension [Microsoft]

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