The factory defect rate for Xbox 360 consoles in August 2005 - four months prior to its US launch - was as high as 68 per cent.

What's more, the initial yield on the three-core CPU designed by IBM for the next-generation console was just 16 per cent.

That's all according to a report by VentureBeat's Dean Takahashi, author of the console's unofficial biography, of sorts, Xbox 360 Uncloaked, who attributed the numbers to "several sources".

In his article Xbox 360 defects: an inside history of Microsoft's videogame console woes, Takahashi also wrote that during meetings to outline the Xbox 360 project, "Secretly, Microsoft had planned on selling 50 million Xbox 360s".

Later on, Takahashi's sources claim that Microsoft was well aware of the massive defect rate (although entertainment division boss Robbie Bach has subsequently denied there was any concern about it at the time) and chose to press on with the console's launch anyway.

Over 1.2 million consoles were returned by early 2007, he wrote, and eventually Microsoft announced a free replacement service as it got its head around the problem.

As to why, Takahashi identified any number of things, but in terms of the early round of problems it sounds like feature-creep, with the late addition of hard disks and wireless controllers blocking airflow

"It turned out in the end that this was all going too far, too fast," said one source quoted by Takahashi. "They were adding too many features after things were locked down. That incremental feature adding just made it fragile."

Microsoft also took ownership of the ATI and IBM chip designs at the heart of the console. "However," Takahashi pointed out, "this was a mistake: it was now responsible for failures related to the chip." Yeah - oops.

The result of all the failures was, initially, a "bone pile" in a warehouse at manufacturer Wistron and a repair centre in Texas of over 500,000 consoles that either didn't work to begin with or broke quickly. All the while we were being told failures were within "normal rates for consumer electronics products".

Later, between January and June 2007, Microsoft even shut down manufacturing, according to Takahashi, in order to investigate.

Yet for all this, Takahashi reported that Robbie Bach told fellow diners at some sort of technology banquet in July that gamers have largely forgiven the company for the defectives 360s.

For Microsoft's part, it said: "This new story repeats old information, and contains rumors and innuendo from anonymous sources, attempting to create a new sensational angle, and is highly irresponsible."