SquareTrade explains its report of a 16.4% Xbox 360 failure rate

Online warranty company SquareTrade made plenty of headlines when it reported a 16.4 percent failure rate on Xbox 360 consoles it covered.

In response to the interest generated by that initial report, the company has provided some more details on its blog of the methodology it used for coming up with that failure rate.

The money quote:

this report only tracks this test group for a period of 6 to 10 months after warranty purchase (ending January 31, 2007). Once this same test group is tracked for 24 or 36 months, the fail rate is certain to go up. Our data shows that failures spike in the third month after warranty purchase but remain fairly steady after that, with only incremental drop-off until the eighth month. This pattern is fairly consistent with all electronics failures.