Unsealed documents in a lawsuit over an Xbox 360 that repeatedly scratched a dude's games suggest that Microsoft knew all about the problem, but rejected all three possible solutions prior to the 360's launch.
Of course, this isn't exactly shocking—Dean Takahashi revealed just how startlingly troubled the Xbox 360 was from the get-go. Hiro Umeno, a Microsoft program manager, said in a declaration about the disc-scratching problem that "This is ... information that we as a team, optical disc drive team, knew about. When we first discovered the problem in September or October (2005), when we got a first report of disc movement, we knew this is what's causing the problem."
The solutions considered—and rejected—were to increase the magnetic field of the disc holder (could've interfered with the disc opening and closing), slowing the disc speed (could've increased load time) and to install small bumpers (too expensive, costing between $35 million and $75 million). Instead, they went with a warning in the manual not to move the console with the discs still inside, a warning that Microsoft itself thought was insufficient, according to an internal email. A consultant for the plaintiff notes that Sony and Nintendo "almost always incorporate the possibility that a console could be moved while a disc is rotating inside in the designs of their products."
Moral of the story seems to be not to buy rev. A hardware from Microsoft, perhaps the only major company to not pass muster under our maxim it's safer than ever to do so. [Seattle Tech Report via Xbox 360 Fanboy]