Reshelle Cable of Folsom, Calif., sued Microsoft last month in Superior Court in Sacramento County, charging that the company violated multiple state consumer-protection and unfair-competition laws. Cable alleged that the company continued to sell the Xbox 360 even though it knew that the console's hardware was likely to fail.

According to Cable, Microsoft pushed the Xbox 360 to market in the hope of trumping machines from rivals . and . although it was aware of problems. "[The Xbox 360's] rush to the market was detrimental to consumers because [it] suffered from numerous hardware defects," read the lawsuit, filed Sept. 20.

The Xbox 360's hardware problems -- dubbed the "red ring of death" for the flashing red lights that signal a general failure of the machine -- have dogged Microsoft since the game system's first year. In July 2007, Microsoft finally acknowledged that an "" had to be authorized on returned units, and said that it was taking a US$1 billion charge against earnings to pay for the fixes.

At the time, Microsoft also extended the Xbox 360's warranty to three years for any Xbox 360 that displayed the error signal.

Cable's lawsuit quoted several online news stories, including one by VentureBeat.com that cited analysts' estimates of failure and repair rates as high as 15%. The VentureBeat.com story and others also claimed that Microsoft rushed the machine to market to head off and Nintendo's Wii.