Well, that didn't take long. In the recent "Defend the School" tournament held at Queens College in New York, the new Killer Instinct was featured as one of the headlining games. This event seeds into the much larger Defend the North tournament.
During the Grand Finals of Killer Instinct, the console dropped its internet connection, and as you can probably imagine, the gameplay immediately stopped. People were not pleased.
This poses some major questions for Microsoft and for the greater eSports community. Are we willing to put up with such nonsense over something as trivial as a dropped connection? Consider that in most FGC tournaments even an accidental pause by a player results in a disqualification. Why should we put up with hardware causing these issues?
This is certainly not the spotlight Microsoft wanted on their new console, but they've got it now. Your move Microsoft - fix it, or the greater eSports world (at least the FGC and FPS markets) may just pass you by.
UPDATED: A video explaining the situation has been put out by the tournament organizer. Apparently, the console in question was not the original owner of the KI license as was originally thought. Still, an on disk version or some such solution should probably be considered by Double Helix at this point to avoid future PR blowups.