EB Australia spat rumoured with Microsoft

According to this, a row appears to be developing between Microsoft and EB Australia. The retailer is seemingly throwing a "bit of a fanny" in private over the fact that Microsoft is allegedly refusing to honour AU$ 10 million on faulty Xbox 360s. From the story:

According to the transcript, EB Australia has $10 million worth of defective Xbox 360s gathering dust, as Microsoft is unwilling to take them back. As a result, EB is no longer stocking the 360, except as second-hand or pre-owned units. A search of the EB Games website for "xbox 360" confirms this.

"There have been threats of EB dropping the Xbox range all together," says the transcript.

To recoup its losses, EB is trying to repair the defective units and offer them as second-hand. However these units are often returned dead, the transcript states. It also mentions that EB lost $85 per console sold once Microsoft introduced the standard three-year warranty, as EB was unable to offer its own.

Microsoft has since issued a "no comment" on the situation. Kotaku AU will no doubt stay with this to the death, so we'll let you know what happens.