Yesterday my Xbox 360 died, quietly and without warning. One moment it was playing a DVD for my cat, and the next it was frozen. Rebooting resulted in a freeze partway through the boot logo, and then the dreaded three red segments flashed around the power button.
I performed all the steps listed in the troubleshooting guide at Microsoft's website. Still I got the red lights, the dread lights, the your-box-is-dead-lights.
I've had the box for six months, so it's no longer covered by the default 90-day warranty. I had had very few problems in that time, and thought I was past any manufacturing defects.
Usually I don't buy extended warranties, because I baby my equipment and manufacturing defects show up in the first day or two of use. So my stuff either fails right away or keeps working until it wears out. So I didn't buy one this time either. Just to make sure, I had left the machine running for an entire weekend shortly after I got it, and had no freezes. So I thought I was safe.
I was wrong. What I failed to consider was that the initial manufacturing runs of a new product are often the most trouble-prone, and not all defects show up in the first few days of use.
Now I'm out the cost of repair, which is double the cost of a two-year service contract. Make that triple since I'm going to buy the contract when I get the machine back.
Moral of the story: Service contracts are usually a waste of money...but not always.