Xbox 360 Elite problems have caused quite the headache for Microsoft. Although the issues that were originally supposed to be solved by the upgrade in the system, many still had problems. Microsoft eventually had to extend the warranty for the machine, as the acceptable failure rate for the console was high above the normal amount.
RROD. The red ring of death was experienced by many players that utilized the Xbox 360, and the Xbox 360 Elite. The Elite model was supposed to resolve the issues, but it turned out that the problem that caused the RROD was never resolved. Although the storage had been increased, and the finish of the console was made to be a more attractive matte black, the malfunction of the console was not adequately addressed.
What caused the problem? In a word, heat. There was a problem with the ventilation of the original console, which cause some of the components to overheat. This would eventually lead to a major malfunction of the system, and cause it to be unable to start.
What happened? Microsoft refused to acknowledge the problem when consumers started to complain. They stated that tests of the system had ensure that there was no problem. However, they eventually relented and extended the warranty of the product to cover the issues with the system. After it was acknowledged that heat was the problem, the components were eventually changed to more efficient varieties, and the ventilation was improved. New models of the system do not have the same problems that the original iteration did, and are much more reliable.