According to VentureBeat's own Dean Takahashi and his numerous insider sources, 68% of all the early manufactured Xbox 360 consoles were defective and Microsoft knew it. Takahashi does mention that it's common industry knowledge that "early yields on electronic goods are almost always lousy", but in the case of the 360, the problem was never fixed and production of the defective consoles went as planned. Because, you know, Microsoft had launch plans to stick to.
Again, this is all rumor seeing that Microsoft would never admit to such knowledge or such high defective rate numbers, but let's say they knew that 68% of all their consoles had a potential for failure. If so, shame on them, but we think they learned their lesson.