Microsoft long ago fessed up that the Xbox 360 was capable of scratching discs, and it even offered a (somewhat limited) exchange program for damaged games, but some recently unsealed documents from an ongoing lawsuit now suggest that the company was well aware of the issue for about as long as the console has been around. According to The Seattle Post-Intelligencer, Microsoft first discovered the problem in September or October of 2005, and it even went so far as to send a "team of engineers" to stores across the US to determine the best course of action. Apparently, they came up with three options, two of which proved to be impractical, and one of which (installing small bumpers in each and every console) proved to be too expensive, leading Microsoft to offer the disc exchange instead. What's more, the documents apparently also revealed that some Microsoft employees thought that the warning labels on the console were insufficient, and that the company has received complaints about the problem from more than 55,000 customers as of April 30th of this year. No word on any movement just yet in the lawsuits themselves just yet but one of them, filed back in July of 2007, is seeking class-action status on behalf of everyone that's bought an Xbox 360.

[Thanks, Lyons]

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Documents suggest Microsoft knew Xbox 360 could damage discs all along