Microsoft Knew of Xbox 360 Disk-Scratching - Did Nothing.

While Xbox 360 overheating, red-ring-of-death issues are nothing new, information revealed in a lawsuit points to other issues:

Documents unsealed in his court case revealed Microsoft discovered its Xbox 360 could scratch discs before it went on sale in 2005, and even got as far as considering three possible solutions to the problem, the Seattle Tech Report revealed today.

The characteristic circular scratches can occur whenever the orientation of the console -- which is designed to be used in either a horizontal or vertical position -- is changed while the drive is spinning. Johnson filed his suit after his console scratched three store-bought game discs, and is seeking $50,000 in punitive damages.

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