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seems like azure is down as other microsoft sites are having issues
Azure is working fine, in my region! That is, my web applications are still running.
Applications were running, but I couldn't resolve any domains from any of our Azure machines.
massive internal DNS issues. source: unverified.

As always, the Office365 portal reports all systems are go. Can confirm Lync and Exchange online seem to be down.

xbox dns set to msft.net

same for microsoft.com

ns1.msft.net doesn't return an address (no time to check the other 4 will I assume it is dns).

office365 uses the same nameservers. Your isp must have the addresses cached. We run our own dns and don't have it cached. So I can't get anything out of anything that uses msft.net nameservers (xbox.com, microsoft.com office365.com etc.)
An employee at the Microsoft Store support line said that they were undergoing a system update. I wonder if that is connected. Either way, bad choice of a date for a system update considering the official Xbox One launch tonight.
It's up for me just 13 minutes after the post.
Not for me.
Sounds like DNS caching, alright.
Right now I can't even get to microsoft.com. Something big is happening.
Yeah, like more fud.
I tried from a number of different VPN endpoints around the world and couldn't get to xbox.com, microsoft.com, or outlook.com
I am currently logged in to outlook, and can access microsoft.com, but Xbox.com is still down.
FYI: outlook.com and office 365 are also down, earlier the DNS zone for outlook returned NXDOMAIN! (DNS speak for 404 not found)
As someone actively monitoring this all day long because we have recently deployed an Xbox launch site on Azure- it's been pretty much since first thing this AM on the west coast.
hotmail.com which points to outlook is still working for me on OpenDNS
outlook.com is back up
One way to diagnose if a dns problem.

whois xbox.com

grab the nameservers from the whois.

In this case:

ns3.msft.net

   ns4.msft.net

   ns1.msft.net

   ns2.msft.net

   ns5.msft.net

On the command line:

nslookup

server ns1.msft.net (etc.)

xbox.com

www.xbox.com

msft.net

...etc.

In this case ns1.msft.net doesn't even answer consequently you will not be able to get any addresses for the other domains.

If you query your local isp dns (or google at 8.8.8.8 or 8.8.4.4) it's possible they have the addresses cached and will return something.

But if the dns isn't answering (per the whois) you have at the very least a dns issue.

While I was typing this ns1.msft.net started to answer again...when I started the "server ns1.msft.net" part failed.

yeah that'll happen when the firewall on your DNS server blocks DNS requests cuz some admin messed up a GPO. heh
(comment deleted)
I thought titles were only edited to be less... editorialized.

Who the hell added 'Microscrood'?

(comment deleted)
And... it's back up!