Microsoft are facing a lawsuit, brought under California's consumer protection statutes, was filed in the Sacramento County Superior Court. The lawsuit alleges that an excessive number of Xbox 360 consoles have failed, resulting in what is commonly known in the gaming community as the "red ring of death". The lawsuit further alleges that Microsoft concealed the excessive failure rate of its Xbox 360 consoles in order to compete with the pending launch of Sony's Playstation 3 and Nintendo's Wii gaming systems.



The lawsuit cites to a number of recent articles published in gaming trade journals and on popular websites including dailygamesnews.com, VentureBeat, Digital Media and Yahoo! Those articles contend that Microsoft knew as far back as November 2005 that over 50% of the Xbox 360 consoles involved in the initial sales launch were defective.



The class action lawsuit seeks an order that Microsoft disgorge all profits attributable to its sale of the Xbox 360, as well as that Microsoft publicly announce and implement a refund program in California.



Source: Internal