Ps2 did have these problems but not on such a high level

PS2 did not have a 33% failure rate.

But NOTHING can harm Halo 3 sales

eh, this won't matter much. Parents will buy what their teenagers want. That's the graphics and M rated games on 360. Halo, GTA, etc.

Parents are buying the Wii. All the middle schoolers and high schoolers want 360 or PS3. PS3 is too expensive for most, so they get a 360.

Where it hurts is Microsoft's supposed push into more mainstream gaming. Moms are the ones watching the Today show and if they think the console is a problem and the kiddies are screaming for a new one this Christmas, guess what happens?

That said, I agree that MS sat on this way too long. They knew they were having a higher rate of failures than they should have and they knew a year ago. They should have aggressively diagnosed the problem and put a definitive fix in place immediately up to and including a "voluntary" recall or something to get the units fixed. They also could have done some different things like getting a BUNCH of consoles fixed properly -- both DVD drives and motherboard heat issues and do a SWAP IN THE MAIL. Give the owner two options: 1, send yours in and we will repair or replace and you'll see one in a couple of weeks OR 2, give us a credit card number, we will charge your card for a replacement unit and ship it to you immediately and give you 30 days to return the defective one. That way gamers could keep playing.

Instead, they handled this whole thing about as poorly as they could and the 3 year extension will prove as or more costly than fixing it quickly in the first place.

I guess we'll see how it plays out in the LR but I think people are seriously underestimating the damage that the whole hardware fiasco is going to cause.

Don't get me wrong, though, I love my 360, but the hardware failures are a real downer.

http://www.msnbc.msn.com/id/3032633/

Link to video, its on the right.

Well like I posted in another thread, Xbox 360 sales has been down a lot this year...just last year they sold a whopping 4 million in U.S. and now its 1.5 million in the U.S....and considering that we are half way through the year thats not good...that has to be a clue that the media knows about the fact the Xbox 360 has a high defective rate...Microsoft better fix it pretty soon its not looking good....only Halo 3 will tell dramatically...

Parents are buying the Wii? Yeah, my parents... who are 60.  My friends and their parents already have one.  The Wii has the highest median age of any console in history.  This isn't your kid brother's system, this is your parents system.  Which ironically, makes the 360 the 'kids' system this generation with the youngest age median.  No, I don't have any stats to back that up, although the recent Neilson ratings certainly supports this as well as a mountain of antidotal evidence.  Apperantly various report from University students claim the Wii is hugely popular on campus as well (best thing to play when drunk with your buds...) although 360 is also very popular.

Sorry for the rant, I'm just sick of this baseless Wii is for kids mentality.

I doubt the Today show will affect the 360 much, its the system of choice for core-gamers and they are all VERY aware of it's technical problems anyway.  Might affect Christmas sales though if this continues unabated in the media.   Come on MS, get the 'falcon' units out already....

This could be a sledgehammer to the 360 if people beyond the Today Show start reporting this stuff.

I think it's crazy that the 360's has had these problems for this long. Like others have said, the 360 had problems right out of the gate. Take the video from http://smashmyxbox.com/ (not to sound anti-360, they've smashed an Ipod, PS3, and Wii as well), they camped out for a couple of days before the 360 launch and were the first in the lines. Less than 20 minutes or so before the store opens its doors, an employee comes out and warns everybody that 360's were apparently scratching disks and having others issues and suggests that people buy a warranty.

 middle school and highschool kids are actually not buying the systems their parents are and pretty much most are buying the wii. and if the problems exist the parenmts will not buy a defective machine. the main buyer of the 360 is guys/gals that live at home and not having many bills. and definately no "family" buys the 360. i know of 3 people that have no family ande lives at home that has either nought a 360 or gonna buy one. all three has no bills in general. the ones that has a family and bills either doesnt own a system or owns a wii. the today show doing this will probably hurt future "casual" gamer sales that M$ wants to attract

I won't argue any of the points you made, but I think there is a bigger picture here. Something said on TV doesn't have to be true to have its impact and this could have a HUGE impact on sales, especially if other news outletts pick up on it and run with it. I expect MS to play damage control fast here. The sad part is that this is a huge overreaction, but it may be the thing that spurs MS to do a recall, so as far as I am concerned it could be a good thing.

I am actually MORE interested in how this will effect PS3 sales than 360 sales.

Edit: I just watched the video and it wasn't too bad for MS, I don't expect much change, OP gave impression that it was a huge doom and gloom story....