Not everything inside the Xbox 360 was designed by Microsoft; the console's wi-fi capabilities and some its video codecs are licensed from Motorola. And are now the subject of a court battle between the two companies.
A suit has been filed in a Federal Court in Seattle by Microsoft, alleging Motorola "broke its promise" in regards to patent licensing by charging "royalties that are excessive and discriminatory" for the technology included in the Xbox 360.
In other words, that Motorola charged Microsoft a lot more for the licensing than they have other companies.
The specific tech in question is related to the Xbox 360's ability to connect to a network wirelessly over WLAN, as well as its ability to display videos running in the H.264/MPEG-4 AVC codec.
Microsoft is asking the courts to determine a more reasonable royalty rate for the use of the technology, along with compensation for Motorola's alleged breach of contract.
http://kotaku.com/5686042/microsoft-suing-motorola-over-xbox-360-tech
