Microsoft has agreed to extended the warranty on the Xbox 360 to cover the ‘E74’ error.

This bug is different to the much-publicized ‘red ring of death’. It’s indicated by one quadrant of the power indicator glowing, and an on-screen message displaying the error code E74 and informing users to contact Xbox customer support. Once this happens, the machine is pretty much useless without repair, though there have been some claims of temporary solutions.

The exact cause of the problem is still uncertain. There doesn’t seem to be any pattern of manufacturing dates among the affected machines, making it unlikely it’s down to a rogue batch of components. The most popular theories are that it’s related to either the audio-video cable or to the scaler chip.

Originally Microsoft classified it as simply a ‘general hardware failure’ which was not covered by the product’s warranty. That left users having to pay for repairs unless they were prepared to take legal action under local consumer laws.

Microsoft says it is now satisfied the problem is related to the ‘red ring of death’ closely enough that it’s prepared to include it in the warranty program announced in 2007 to cover that fault. Users hit by the E74 error can now get a free repair or replacement for three years after purchase.

Those who’ve already paid Microsoft for an E74 repair will get a refund of those costs. These should be automatically paid in the next four to twelve weeks. Customers who haven’t had the money back by 1 July should visit www.xbox.com/support to lodge a formal claim, which must be received by November 1st.