1UP reports: "There's been a lot of press about Microsoft's red ring problem. Estimates of the problem have been all over the map, and when he was working for Microsoft, Peter Moore referred to them as a moving target. Company estimates pinned it at a fairly normal 3%, while some retailers have put the percentage as high as 1/3 of all systems.
A new report claims the truth is somewhere in the middle. SquareTrade deals in selling warranties for electronics, and has amassed their over 1000 warranty claims to come up with some interesting data. The findings were a 16.4% failure rate of Xbox 360 systems, versus a roughly 3% rate for the Sony PlayStation 3 or the Nintendo Wii with sample sizes in the high hundreds. The well-known "Red Ring of Death" error accounted for about 60% of those hardware failures, and thus most system-breaking problems are covered by Microsoft's extended warranty plan".