The computer giant claims to have fixed "hardware failures" found in its Xbox 360 console as gaming sales fall 10 per cent Dearbail Jordan
Microsoft saw $1 billion (£487.5 million) wiped off its profits during the second quarter after the US computer giant was forced to cover manufacturing problems with its Xbox 360 games console.

The company announced profits up from $2.83 billion in the second quarter last year to $3.04 billion in the three months to June 30, which strips out the $1 billion charge to fix its game consoles.

Microsoft declined to outline what difficulties it has encountered with its Xbox 360, but said that the problems had now been fixed after earlier this month extending the warranty on the console to three years after many were hit by "general hardware failure".

Revenues in Microsoft's gaming division fell by 10 per cent to $1.16 billion during the second quarter.
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