XBL suit muzzles Microsoft

Microsoft ended 2007 on a down note, with widespread problems plaguing its Xbox Live online gaming service through the final week of the year and into January. While some gamers couldn't log in to the service or play games online, they could pass the time by reading frequent Xbox Live status on the blog of the service's programming director, Larry "Major Nelson" Hryb.

Among the updates Hryb gave was word that the problems with Xbox Live were due to the increased server strain associated with a slew of new 360 owners powering up and logging on. That explanation may come back to haunt Microsoft, as three disgruntled subscribers in Texas sued the company, saying it knew of the coming increase in Xbox Live users and failed to account for it. The suit claims Microsoft is guilty of breach of contract and negligent misrepresentation in failing to keep Xbox Live up and running.

Hryb has not offered Xbox Live status updates in recent days, and on his Sunday podcast, he explained why.

"Unfortunately, as some of you may or may not know, a lawyer has decided to sue us," Hryb said. "There is litigation, and once that happens, I can no longer make a comment."

Xbox Live general manager Mark Whitten issued a statement apologizing for the problems, saying he and his colleagues were disappointed with their performance resolving the issues. As a make good, Whitten said Microsoft will offer subscribers a free Xbox Live Arcade game, with the details on that to be revealed in the coming weeks.