GameStop has been repairing, reselling red-ringed Xbox 360s since 2009By Shawn Knight
The Xbox 360 remains a favorite among millions of gamers even nearly 10 years after its November 2005 debut. Unfortunately for Microsoft and buyers alike, the console was plagued by a high failure rate over an issue that became known as the Red Ring of Death.
While the company has never issued statistics related to the 360's failure rate, they did address the matter early on by rolling out an extended three-year warranty for affected consoles.
Of course, not every dead console made it back into the hands of Microsoft for repair or replacement and that was just fine for one brick-and-mortar games retailer.
As outlined in a recent piece from Bloomberg, GameStop has been capitalizing on Microsoft's misfortunes since 2009. In addition to its lucrative trade-in system which represents 27 percent of the company's revenue, they figured out to how effectively repair the Red Ring of Death.
GameStop built a machine that is able to heat up the top of the system while simultaneously cooling it from below, thus repairing the faulty internal connection that leads to the hardware error. They've streamlined and perfected the process which is now carried out by a $10-per-hour labor operator.
Repaired systems are then sold as refurbished and can fetch close to its original price, further padding the company's profits.
The method will no doubt squander away as the console continues to age and gamers migrate to next generation systems from both Microsoft and Sony, but it's interesting to hear of yet another way that GameStop has remained relevant in the face of an ongoing migration to digital downloads.