After months of denying there was anything unusual about the high number of Xbox 360 hardware failures, Microsoft has finally admitted that too many 360s are displaying the dreading "red ring of death," and it's coughing up $1 billion to extend the Xbox's warranty. It's about time.

In an open letter to 360 gamers, Microsoft's Peter Moore stopped short of saying how many Xbox consoles had failed, but wrote "we've not been doing a good enough job...if we have let any of you down in the experience you have had with your Xbox 360, we sincerely apologize." As someone who suffered a dead Xbox myself, I with Microsoft could have just built a more stable console in the first place, but I'll take the apology, even if it's late.

So here's the deal: Microsoft has extended the Xbox 360's warranty to a full three years for any console that lights up with the "red ring of death" (a series of lights around the power button indicating a general hardware failure). If the three red lights flash on your Xbox, call the customer service line; the company will send you an empty box for shipping your sick console back to Microsoft HQ for repairs (the whole process takes anywhere from a week or so to a month). And if you've already paid to have your 360 repaired for a "red ring" problem, Microsoft will refund your money. Once all is said and done, the company will have spent about $1 billion on repairs to the faulty consoles. That's a huge expense for Microsoft's Xbox division, but given all the gamers who've had to send in their consoles for lengthy repairs, I'd say we're almost even-steven.

Related:
Microsoft lengthens Xbox 360 warranty [Yahoo! Games]
Xbox 360 Red Ring of Death: My Turn [Yahoo! Tech]