Microsoft sued over Xbox Live outage

Microsoft now faces a lawsuit over recent problems with its Xbox Live online gaming service. Three Texas residents filed a lawsuit Friday on behalf of themselves and others who have had trouble connecting to Xbox Live in recent weeks.

The suit, filed in US District Court in Houston, claims Microsoft's outages represent a breach of contract and negligent misrepresentation for which the software maker is liable. The suit doesn't claim specific damages, but notes the amount is in excess of $5 million.

In the suit, the plaintiffs allege that Microsoft should have known strong holiday sales would tax its servers. "Microsoft knew the increase in subscriptions would increase game-play on its servers, yet failed to provide adequate access and service to Xbox Live and its subscribers," read the filing.

Microsoft has apologized for the outage and said it would allow Xbox live subscribers to download a free game. A Microsoft representative was not immediately available for comment.