reports that a motion (PDF link) filed last week in a Seattle, Washington lawsuit claims that Microsoft was aware of the widespread Xbox 360 disc scratching issues -- the console will severely scratch discs if tilted or moved during play -- before the console was launched in 2005. The motion, which seeks class action status for the lawsuit, cites quotes from a (currently sealed) document in which Microsoft employees claim that they were aware of the problem before the console was launched. The document quotes Microsoft program manager Hiroo Umeno who stated that the problem was discoverd in "September or October" 2005.
Microsoft supposedly considered several solutions to the problem prior to launch and rejected them all. Three solutions were considered, including increasing the disc holder's magnetic field, slowing disc rotation speed and installing "bumpers." The first was rejected because it would "interfere" with the disc loading mechanism, the second because it would extend game load times, and the third because it was too expensive (to the tune of $35 to $75 million). The only action taken by Microsoft, apparently, was to add a warning to the Xbox 360 manual. The company later applied a warning label onto the disc drive itself and established a program to replace scratched discs (for a fee).
Perhaps most damning, an outside consultant for the plaintiffs stated that both Sony and Nintendo's designs typically account for the possibility that a console will be moved while a disc is spinning.