Microsoft does a 360
Finally! Microsoft (NASDAQ:MSFT) is standing by its sick-prone Xbox 360, even if it's going to have to put its money where its mouth is. The console maker announced that it is taking a $1 billion charge as it extends the video game system warranty for a full three years.

This is the second time that Mr. Softy has gotten soft on enforcing the Pottery Barn rule. The original units shipped with manufacturer warranties that lasted for just a few months. Last year, Microsoft extended it to a full year.

I can feel the pain here. I got the dreaded three-flashing-red-lights error -- the complete failure warning that has plagued early versions of the 360 -- last year.

"It's a common flaw," I wrote at the time. "Microsoft even has an entire page devoted to it, and it's also one of the prompts on its customer service line. I've owned just about every major console since I was old enough to earn an allowance, and this is the first one that went bonkers on me within the first year of ownership. Thanks to what I see as a pretty skimpy warranty -- and my boneheaded ways for not looking into an extended warranty -- I'm out $139 plus shipping. I still don't know if I'll be getting my original unlucky machine back or some other refurbished reject, but at this point, my faith in Microsoft is about as buggy as my 360."

I was under the grace period of the revised warranty, yet Microsoft sent me a check for less than half of what it billed me for the original repair.

With Sony (NYSE:SNE) pushing the Blu-ray DVD benefits of its PS3 and the Nintendo Wii so hot that it's still a tough system to land, it's great to see Microsoft go the extra mile at this point. It probably doesn't have much of a choice.

Going around the block, buster
It's great to see Blockbuster (NYSE:BBI) do the right thing, too. It brought on former 7-Eleven CEO Jim Keyes to take over the beleaguered video-rental giant. Keyes should help improve the retail side of the operations, and that's important. Total Access may be a great product -- it's definitely holding its own against Netflix (NASDAQ:NFLX) these days -- but the money-losing online service is a failure if it doesn't get subscribers to spend more money inside the physical stores.

I have no idea what a Blockbuster store will look like in a few years, but it's unlikely to continue under the same tired model that it's operating as today. It has to evolve. If the company can be saved, someone like Keyes with a data-gobbling convenience store mentality is just what Blockbuster needs to survive.

Forget about making it a Blockbuster Night. In one swift move, the chain may have secured what it takes to make it through to the morning after.

Until next week, I remain,

Rick Munarriz

Microsoft is a pick in the Motley Fool Inside Value newsletter service. Nintendo and Netflix are Motley Fool Stock Advisor selections. Subscribe to either service and take advantage of a 30-day money-back offer.

Longtime Fool contributorRick Munarriz recommends windshield wiper fluid when trying to look back. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story, save for Netflix. The Fool has a disclosure policy.