Bugbait
路Buy a Rolex from any Watches of Switzerland store (or subsidiary) and you get a 10 year guarantee on the watch as WOS extend the Rolex warranty by a further 5 years. So WOS have confidence that the watches they sell are reliable and don't break very often, it gives the buyer confidence that the watch is going to be reliable.
Or they make enough profit from selling Rolex that it more than covers any issues in the extra 5 years. Makes a lot of sense from a marketing perspective. I recall reading that WoS make about 50% of their revenue from Rolex, or maybe that was before the supply issues?
A watch with a manufacturing fault will likely fail within the first 5 years anyway, so the cost is really on Rolex there. Warranties very rarely if ever cover fair wear and tear. What this is after 10 years would be very open to interpretation so the cost on WoS is very small relative to the likely rewards of the marketing and subsequent sales boost.
In short, the extended warranty is great for WoS but I think offers negligible real benefit to the costumer.
EDIT: Typo.
Edited: