To electronic retailers, selling extended warranties in -in part- like selling roulette chips: the product service plan may help a few customers replace their broken hardware, but the odds are always in favor of the house. Unless, of course, you happen to sell a certain product with an abnormally high failure rate.
According to an internal GameStop memo revealed by GamersReports, GameStop will no longer offer product replacement plan (PRP) for new Xbox 360 purchases.
The memo reads: "Effective immediately GameStop will no longer offer PRPs on new, refurbed, and used Xbox 360 systems. When prompted by the POS 'Do you want a PRP plan added to this purchase,' please press 'Escape' and DO NOT offer PRPs to customers purchasing an Xbox 360 system. Customers purchasing a new Xbox 360 system will still receive a 1 year manufacturer's warranty from Microsoft."
Early in 2007, high Xbox 360 failure rates forced EB Games (a chain owned by GameStop) to double the prices of its one-year, over-the-counter warranty. Apparently this wasn't enough. A visit to a San Francisco GameStop store confirmed that the new policy is already in place.
GameStop will still offer product replacement plans for the PlayStation 3 and Wii, both of which also come with a one year manufacturer's warranty.
