Microsoft announced changes to the Xbox 360 Warranty today:
The team is aware that a very small percentage of our Xbox 360 customers have reported receiving an error that displays E74 on their screen and after investigating the issue, we have determined that the E74 error message can indicate the general hardware failure that is associated with three flashing red lights error on the console. As such, we will be covering any repairs due to the E74 error message under the three year warranty we announced related to the three flashing lights error, as well as reimbursing any customers that have already paid for an E74 related repair.
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