1 billion dollars because they made a crappy system.
http://www.cnbc.com/id/19608137/for/cnbc/
It's good, but you gotta know that the system they send you back is refurbished.
Obviously this is better than not having coverage at all after 1 year (previous policy).
Double edged sword really: first it costs them money, but they reassure owners of the 360.
On the other hand this sends a signal to everyone else who was going to buy a 360 that the failure rates are definitely massive if they are going to all this trouble to cover it.
Thanks to Blacksaber for the sig!