Another anonymous retailer echoed the previous statement, "At one stage we were getting calls everyday however this has slowed down," he noted. "The failure rate must be well over 30% which when you look at a PC or iPod the failure rate is less than 2%."
The failures are mainly due to overheating generated by the 360's processor or graphics chip, both of which are still made using the same process introduced for the console's launch in 2005.
The failures are typically associated with overheating generated by the Xbox 360's triple-core processor or its ATI-made graphics chip, both of which are made using the same chip processes introduced for the console's November 2005 North American launch. There have however, been reports that Microsoft is shipping added cooling on replacement untis to help comabt the overheating issue.
Source:
Electronista