Well, you can’t get much more sensational a headline than that.

Microsoft is apparently losing money on fixing their broken consoles for $129.  As of 9/1/2006 the price has increased to $139.  The customer is also required to pay for the shipping of the product to Microsoft.

Are there so many broken 360’s that they can’t afford any loss at all in fixing the product?

The increase in the price certainly makes it seem a little more appealing to go ahead and buy a core rather than wait to send your defective unit in, and then get someone else’s defective unit back.  That in itself would help Microsoft in their battle with the Sony PS3.  If the defective console buyers  just went ahead and bought a new unit rather than have their broken defective unit fixed then the sales # for the 360 would certainly benefit.  This is the exact behavior that some Fans of the xbox point as being the reason that the PS2 sold so many in the last generation.

Sorry Microsoft, but if you’ve got so many broken out of warranty units that you can’t even  afford a small loss on each one returned, then you’ve got more issues than you are letting on.