Xbox Live 'up and running' for some, but not all

Despite claims on the service's support page that all is well, users are still reporting to BetaNews and other media outlets that the problems said to be fixed still continue.

Microsoft is blaming the outages on the massive influx of new customers over the holidays, which could mean that the company was ill-prepared to handle what is typically the busiest time for the video game sector.

Within hours of BetaNews' initial report on the outage and its apparent fix, several frustrated customers reported that they still were experiencing problems. The issues were the same: sign-in failures, matchmaking problems, and issues recovering their accounts.

In order to quell the obvious backlash that seems to building, Microsoft said it will offer Xbox Live customers a free downloadable game as compensation. It will be given to all users regardless of whether they experienced problems or not.

Still missing is any explanation as to the root of the problem. But in a letter sent to Xbox Live customers, general manager Marc Whitten reported that the signups to the service were the highest in its history, and on January 2, the service reported its largest number of concurrent users ever.

"As a result of this massive increase in usage we know that some of you experienced intermittent Xbox LIVE issues over the holiday break," he wrote. "While the service was not completely offline at any given time, we are disappointed in our performance."

Approximately 17.7 million Xbox 360 consoles have been sold worldwide, according to Microsoft.