Just a week after announcing that reliability problems with its Xbox 360 game system would result in a record-breaking $1.1 billion warranty hit, Microsoft yesterday revealed that the executive most directly responsible for its game business was leaving the company. Peter Moore, previously the senior vice president of Microsoft's interactive entertainment business, will join game maker Electronic Arts (EA) and become president of EA Sports.

Microsoft would not confirm that Moore was forced out of the company due to problems with the Xbox 360, which in addition to reliability issues, is not selling as well as Microsoft had predicted. Also, there are widespread stories of the Xbox 360 malfunctioning in other ways, including scratching game discs so badly they can no longer be used.

"Peter has contributed enormously to the games business since joining Microsoft in 2003 and we are sad to see him go," said Microsoft president Robbie Bach. "Since that time, he presided over the global launch of the Xbox 360, spearheaded a revitalized and rebranded Games for Windows business, and helped steer the console's ascent."

Bach, incidentally, sold $6.2 million worth of Microsoft stock in the weeks leading up to the company's announcement about Xbox reliability problems. This stock selloff, which represents about 20 percent of Bach's Microsoft stock holdings, has raised legal questions about insider trading because Bach must have known about the upcoming warranty hit when he sold the stock. Indeed, Bach said on July 5 that Microsoft had been aware of the problems for "months." He started selling the stock about 6 weeks before the announcement was made.

Replacing Moore at Microsoft is former EA executive Don Mattrick. Mattrick left EA last year after 15 years at the company and had been advising Microsoft since February.