The weeks long connection troubles many Xbox Live users have experienced since the holidays was due, according to Microsoft, to heavy Xbox Live server load brought on by a record number of users attempting to access the service. Xbox group marketing manager Albert Penello told us that "It's wasn't a malicious thing." He explained "We had the biggest concurrent day we've ever had on Live. We had more people than ever signing up on Live, it was 9 million, then 10 million, and it literally was that a lot more people were trying to get on, sign up and play than we had expected over Christmas."

The continued problems were a result of not simply too many people trying to connect and play on Live, but also that too few Xbox Live team members were in the office to react. "It's easy when we're all the office in November, but on December 25th, it's harder to get a hold of everybody," Penello said, later adding "I hope people feel like [giving away a free Live Arcade game] is a fair make good for the inconvenience."

Penello also came to the Live team's defense, noting that "I'd also say in seven years, this has happened maybe zero other times, but I can't remember a time when, other than the slow downloads we had when we launched Video Marketplace, we have had a service outage that wasn't planned."

While Microsoft's Penello and Jeff Bell gave us the impression that the problem is largely addressed when we asked at CES, some of us at Kotaku are still having connection issues, specifically gamertag recovery unresponsiveness. Unfortunately, I'm away from my Xbox 360 and can't report on my own successes or failures with the service.

We've heard fewer complaints from readers over the past few days, but still want to hear from you if you're having troubles.

Source- http://kotaku.com/343152/microsoft-says-xbox-live-outage-due-to-server-strain