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Microsoft has been hit with a new class action lawsuit alleging that the company's Xbox 360 console damages game discs.

"Microsoft improperly and/or negligently manufactured the Xbox 360 console in a manner that causes the expensive game discs ... to be scratched, rendering the games unusable," the suit alleges.

The complaint was filed Monday in the U.S. District Court for Southern California by two residents of the state: Christine Moskowitz and Dan Wood. The suit is seeking not less than $5 million in damages for Xbox 360 buyers affected by the alleged glitch.

Microsoft was slapped with a similar action last week in a Florida court.

In the California court filing, Moskowitz says that in March 2006 she purchased for her son an Xbox 360, along with the popular games Gears of War, Crackdown, and Saints Row. Within a few months, the games bore circular scratch marks and wouldn't work properly, Moskowitz claims. Wood says he purchased an Xbox 360 last December and the unit soon damaged his copy of Tom Clancy's Splinter Cell.

Both plaintiffs claim that the Xbox 360 console damaged their discs and that Microsoft refused to replace the ruined games or pay for them.

Earlier this month, Microsoft acknowledged that a hardware defect in the console was leading to what the company called "an unacceptable number" of general hardware failures. To deal with the problem, Microsoft said it would extend the warranty period on the units by three years, at a cost of between $1.05 billion and $1.15 billion.

The company made no mention of a disc scratching problem, however.

On Tuesday, Microsoft announced that Xbox division head Peter Moore was leaving the company to take a position at games publisher Electronic Arts.

In their lawsuit, Moskowitz and Wood argue that Microsoft's scramble to get a next-generation video game system into the market to compete with those from rivals Sony and Nintendo is at the root of the Xbox 360's problems. "Microsoft's rush to market, while positive for Microsoft, was detrimental to consumers because the Xbox 360 suffered from numerous hardware defects," the suit claims.

Responding to the Florida lawsuit, a Microsoft spokesman told InformationWeek that the company has not received a significant number of complaints about scratched discs, despite the fact that "there are millions of Xbox consoles in use."


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