Microsoft is offering a free copy of action shooter Undertow to Xbox Live subscribers to compensate for network issues over the festive period.

Xbox Live hit the 10 million subscriber milestone over the holiday period.

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.