The Xbox 360's been on the market for a week now. Overheating power supplies and crashing games were among the problems reported by gamers who were lucky enough to get their hands on Microsoft Corp.'s new fast-selling Xbox 360 gaming console.

Did these reports scare off potential customers? It doesn't seem so.

Posters on various gaming sites and user forums told of their Xbox 360s crashing during games after flashing several different error messages, hard drives that failed to work along with the overheating of the power supply bricks.

To add insult to injury, there were also reports of retailers quickly running out of Xboxes even as Microsoft promised to continue steady weekly deliveries.

But Microsoft officials Tuesday denied there was any large-scale problem with the performance or quality of the gaming systems.

"The vast majority of our Xbox 360 owners are having a fantastic time with their new systems. There are some isolated reports of consoles not working as expected, but with any launch of this size and magnitude, you're going to see some problems," said Molly O'Donnell, Senior Manager, Xbox Global Public Relations.

"There is no systemic-issue related crashing or error message," O'Donnell said.

Some analysts, too, argue that this issue could be blown out of proportion. "Its hard to say how big a problem its going to be at this time when there is such a magnifying glass on the Xbox 360 right now. It could be a small number and because of this focus it looks bigger," Joe Wilcox, Jupiter Research analyst, told Microsoft Watch.

However, users may be reacting strongly to reports about power supply problems because they have dealt with them before.

Microsoft announced in February that it would voluntarily replace power cords on all Xbox consoles manufactured before Oct. 23, 2003 (except in Continental Europe). The replacement power cords were designed to protect consumers and their consoles from "rare electrical component failures that can post a fire hazard."

Wilcox says that whether or not Microsoft considers these complaints a big problem is not the point.

"The issue is of perception. It's a hot product with a lot of attention around it. Any perceived problems can be just as damaging as real problems… the last thing [a vendor] wants is a negative perception that can negatively affect sales."

"For any company, the best marketers are the early adopters, the enthusiasts. People are looking for a great experience if they have one, they'll tell three friends. If a company is doing all that it can to satisfy these enthusiasts its doing the right thing."

The best thing Microsoft can do right now "is to show the Xbox 360 buyer extra love."

Microsoft offers customers a guarantee that if they call 800-4-MYXBOX by 3 PM with a problem, can they can overnighter a console at no charge with free shipping return labels for their damaged one. In doing so, they seem to be taking lead from Apple, Inc. who were besieged with complaints about easily damaged iPod Nanos after their release. By assuring customers that any with broken screens could receive free replacements, they saved themselves from a PR nightmare.

With all this noise around crash and burn reports, few have focused on the first week sales at all.

"We didn't release any first day sales numbers. Our 90-day predicted sales are between 2.75 and 3 million," said O'Donnell. "We have a weekly replenishment strategy for the retail channel. This is the hottest product of the holiday so of course there will be more demand than supply."