Several (many, actually) people over the holiday season dealt with Xbox Live outages and it really ticked ‘em off. Microsoft tried to make good on the outages by offering a free game to kiss and make up for said outages.
This is a nice gesture by Microsoft, but it didn’t stop a class action from being filed.
The fact Xbox Live encountered outages was in fact due to the overwhelming success of the Xbox itself. Right after Christmas the Xbox Live servers got absolutely pounded as kids and adults everywhere powered up their units.. only to find the Live service got slammed so hard that they couldn’t keep up.
I guess it’s like they say, success can kill you.