"After investigating this issue, we have determined that the E74 error message can indicate the general hardware failure that is associated with the three flashing red lights error on the console," Microsoft said in a statement on its Xbox support site.
"As a result, we have decided to cover repairs related to the E74 message under our three-year warranty program for certain general hardware failures that was announced in July 2007," Microsoft said.
In 2007, Microsoft said it would take a $1.1 billion charge against earnings to cover the expense of creating a warranty program for Xbox consoles hit with the flashing red lights error, which users dubbed the "red ring of death." Microsoft did not provide an estimate of the financial impact of extending the program to users affected by the E74 error.
In its support bulletin, Microsoft said the problem affects only "a very small percentage of our customers."
The company said it would refund the cost of out-of-warranty repairs to users hit with the error. All refund claims must be received on or before Nov. 1, according to Microsoft. Refund requests will take four to 12 weeks to process, the company said.
"We have already made improvements to the console to reduce the likelihood of an occurrence of this issue," Microsoft said. The software maker did not provide an explanation of what's behind the E74 error or say what circumstances are likely to trigger it.
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