The huge bill that MS face over Xbox 360 repair costs has over shadowed otherwise large gains made by new Windows and Office software according to their earnings report released earlier today. If the Xbox 360 didn't have such a high fault rate, the company would've posted a 26 percent year on year increase instead of falling 21 percent short of their estimates.

Microsoft's Xbox 360 repair costs eroded large gains made by new Windows and Office Software, according to their earnings report released today.

If not for the Xbox 360's extended warranty, Microsoft would have posted $0.39 in diluted earnings per share, a 26% increase over the same period last year. Instead, the console accounted for a $0.08 drop in diluted earnings per share, leaving Microsoft 21% short of their estimates.