But the increase in online activity caused connection problems for gamers around the world.
Marc Whitten, general manager of Xbox Live, apologised for the problems and promised a free Xbox Live Arcade Game to all members for their "loyalty during this holiday period".
Despite the apology, three Texans filed a class action suit against Microsoft alleging breach of contract.
Microsoft has now honoured its promise with "a fast-paced action-shooter that sends you underwater as you battle up to 16 players for control of the oceans".
The game will be available as a free download to all Silver and Gold Live members from today until 27 January.
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