March 10^th, 2002 (12:00am) - Microsoft Japan has officially commented on the growing reports of malfunctioning Japanese Xbox units. Many consumers were shocked to find that their nifty new game systems were gouging nasty scratches into the outer edges of games, DVD movies and music CDs. A full-scale recall will not occur, as MS representatives claim that the defect occurs in less than 1 percent of Japanese Xbox units. Consumers complaining of disc scratching caused by their system have the choice of either sending the unit into Microsoft for repair or merely sending in for a replacement unit. In the event that an Xbox unit has damaged a rental DVD or music disc, Microsoft claims that they will work out the problem with the individual rental shop. Xbox units populating store shelves will not be recalled.

While the number of affected consoles may be minor, this PR nightmare may cause serious damage to the Japanese public’s opinion of Micrsoft’s fledgling console. Two major Japanese electronics retailers, Laox and Nakaura Co, have ceased all sales of Xbox hardware. Signs posted on Xbox display kiosks in Laox stores inform consumers, "We are suspending temporarily sales of the Xbox console itself in order to supply credible products to our customers." Microsoft has no comment on these retailers’ decision to halt hardware sales at this time.

Back home in the U.S., Micrsoft released the following press release concerning the matter:

"An apparent misinterpretation of information on a Microsoft Japan website resulted today in a report of a recall of Microsoft’s Xbox(tm) game console in Japan. This report is incorrect. There is no recall of Xbox in Japan or any other market.

"The Xbox Japan website did report that Microsoft Customer Care Japan had received a small number of inquires (significantly less than one percent of systems sold) from customers reporting small scratches to the outside edge of some game disks after use in the Xbox game consoles. While this is not a common occurrence, and minor scratching is primarily a cosmetic circumstance that does not affect performance, a positive customer experience is of the utmost importance to Microsoft. Xbox Japan responded accordingly in its statement offering to evaluate any Xbox system that a customer is concerned about. If it is determined by Microsoft Customer Care that a system needs to be repaired or replaced for any reason, it will do so immediately.

"After successful launches in North America and Japan, demand for the Xbox continues to be high in all launched markets, and production continues at an aggressive pace. Microsoft will launch Xbox in Europe and Australia on March 14, 2002."