I really don't think the failure rate makes that much of a difference. Most people will get it fixed when it breaks; not buy a new one.
There is the extended warranty, but some places that wouldnt even matter. Here in Norway consumer law gives us 5 years warranty on electronics products like these (and there are similar laws elsewhere in Europe), so it doesnt really matter what the manufacturer warranty is; they have to follow the law. If it breaks due to a design flaw, they have to fix it, replace it or give you your money back.
I realize that for Americans tho, extended warranty is VERY important in the case of the 360.







