Microsoft Recalls Xbox Racing Wheel After Overheating

23 Aug 2007 • by Natalie Aster

Microsoft Corp., the world's largest software maker, will offer customers a free retrofit for the racing wheel of its Xbox 360 game consoles, voluntarily recalling them because some have overheated, reported The Bloomberg.

There have been a ``a very small number of incidents'' in which a component in the wheel chassis overheated and released smoke when the power supply is used to energize the wheel, the company said today in a statement. There have been no reported fires, personal injuries or damage, Microsoft said.

``Owners of the Xbox 360 Wireless Racing Wheel should stop using the AC/DC power supply until they have obtained their retrofit,'' the Redmond, Washington-based company said. ``They may continue to operate the wheel using battery power.''

Microsoft said last month costs of more than $1 billion to fix faulty Xbox consoles held back fourth-quarter earnings. The company has lowered Xbox prices in the U.S. and Europe to make them more attractive to customers as sales trailed those of Nintendo Co.'s Wii. Sony Corp. also cut prices for its PlayStation 3 consoles last month.

The recall follows a similar move by Nokia Oyj, the world's biggest mobile-phone maker, which this month offered to replace as many as 46 million mobile-phone batteries made by Matsushita Electric Industrial Co. as some may overheat.

Microsoft rose 15 cents, or 0.5 percent, to $28.22 in U.S. trading yesterday. The stock has fallen 5.5 percent this year.

The retrofit will be delivered directly to customers' homes, Microsoft spokeswoman Jo Marlow said in an e-mailed statement. The racing wheels are assembled in China using components manufactured by a U.S. company. She said she couldn't identify the manufacturer or assembler.

Wii has emerged as the top seller among the new generation of consoles, with a motion-activated controller that lets players mimic actions such as golf and tennis swings. The console's lower price and simpler games have helped Nintendo outsell rival systems that can process higher-definition graphics.

Microsoft pledged last year to make the Xbox division profitable in the fiscal year ending June 2008. The unit has lost money since it began in 2001.

Microsoft lowered the price for a 20-gigabyte hard drive Xbox by $50 to $349.99 in the U.S. on Aug. 8 and said on Aug. 20 it plans a price reduction in Europe.

The company's goal of making the Xbox unit profitable depends on the success of games such as ``Halo 3,'' which pits a biologically engineered soldier against an alien race. Sales of the previous ``Halo'' led to the division's first quarterly profit, in the period ended December 2004. While Microsoft has lost money on sales of the Xbox console, it makes money on games and a related online service.