Looks like Microsoft is going to do the right thing: as anticipated, Xbox Live General Manager Marc Whitten states in a letter to customers that, as recompense for nearly two weeks of outages, the group is offering up a full, free Xbox Live Arcade title free of charge. Sounds like it won't be until the next couple of weeks before the offer is active, but it will indeed apply to "all" Xbox Live members, and assuming it's for games worth more than 200 Microsoft points, it will be net positive for Gold users who lost about $1.64 worth of Live service over the last twelve days. Well done Microsoft, we think most will consider the stinging pain eased. Memo posted after the break.

Update: Confirmed by our pal Major Nelson -- it's Gold AND Silver members. If you have an Xbox Live account, Microsoft just gave you a free game.

--snip--
Dear Xbox LIVE Members:

During this past holiday season you helped us break a number of Xbox LIVE records. This included our largest sign-up of new members to Xbox LIVE in our 5 year history and just yesterday you broke the record for the single biggest day of concurrent members ever on the service.

As a result of this massive increase in usage we know that some of you experienced intermittent Xbox LIVE issues over the holiday break. While the service was not completely offline at any given time, we are disappointed in our performance. I would like to take this moment to thank you each and every one of you for your patience and understanding as our team has worked around the clock to return the service to a stable state.

At the same time we would like to offer a token of our appreciation to all of you in celebration of record success for the service. And as a thank you for your loyalty during this holiday period, we will be offering all of our Xbox LIVE members around the world access to a full Xbox LIVE Arcade game that will be available to download free of charge. In the coming weeks we will be sharing the specific details of this offer with you.

Thank you again for helping make Xbox LIVE everything that it is today!

Sincerely,

Marc Whitten
General Manager, Xbox LIVE
Gamertag: Notwen

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Microsoft hooks up Xbox Live subs with free Arcade title