Microsoft is seeking to appease angry Xbox Live customers who experienced several outages over the holidays. Apparently, the company was ill-prepared to handle what is typically the busiest time for the video game sector, as customers experienced sign-in failures, matchmaking problems, and issues recovering their accounts.

"While the service was not completely offline at any given time, we are disappointed in our performance," Xbox Live General Manager Mark Whitten said. He explained that the problems stemmed from a "massive increase" in new users of the service over this period, triggered by a significant increase in sales of video games hardware and software.

Microsoft said that users will be soon able to download for free a game title (of their choice?). Most of the eight million Xbox Live members pay an annual fee to use the service. A month's worth of Xbox Live Gold service costs $8 and the average Arcade games goes for $10, with prices varying somewhere between $5 and $20 a title. Around 17.7 million Xbox 360 consoles have been sold worldwide, according to Microsoft.

"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," Whitten said. "In the coming weeks we will be sharing the specific details of this offer with you," he said.

It's still unclear whether users will be able to download a game of their choice or they will be given a single option or a choice of several titles. It may well be that this hasn't yet been decided by the people over at Xbox Live.

Microsoft released last month a new dashboard update for the Xbox 360 just prior to the holiday season. The update, available free of charge, implemented an array of new features and enhancements to the Xbox 360 gaming and entertainment system. They included new video codecs and enhanced member profiles.

So far the eight million members of Xbox Live have spent more than 3 billion collective hours playing online. In total, Xbox Live has hosted almost 3 billion game sessions since its launch, with more than 6 million hosted each day.