Microsoft admits all Xbox360's are defective

[Baloki]

Remember kids if your XBox360 breaks you lose all your downloaded content as Microsoft don't repair broken 360's they just replace them. Also tbh they should have put out a general recall on systems bought before a certain date, this would have given them the chance to do some testing AND would have prevented the bad press their now receiving. Oh well, hindsight anyone?

Since you can only download content to a memory card or the harddrive, which is detachable, you wouldn't lose anything by sending in your 360 for repair/replacement.

From what I understand however that content can only be read by the specific 360 it was downloaded to, as a DRM so people couldn't pirate what they downloaded off the service so if you lose the 360 the downloaded content becomes useless, even if it's moved to a new box.