Former Xbox engineer Nat Brown, who came up with the console's name, slammed Microsoft for failing to capitalise or innovate on their Xbox and their Kinect offering.
He said that the big software Company has made it extremely difficult for developers to make and sell games on the device.
He has slammed the fact that the next generation Xbox console will require Microsoft's Kinect motion sensors to be connected when playing games.
He claims that with the new Xbox there will be no more borrowing from your friends and that users will not be able to play second-hand video games on their console.
'Why can't I write a game for Xbox tomorrow using $100 worth of tools and my existing Windows laptop and test it on my home Xbox or at my friends' houses?' he wrote.
'Why can't I then distribute it digitally in a decent online store, give up a 30% cut and strike it rich if it's a great game, like I can for Android, for iPhone, or for iPad? Oh, wait, I canâ€¦ sort of."
Writing on his blog ilike.code, under the title 'Stupid, Stupid Xbox', Brown said: 'The past 5 years, and the last year in particular, have been simply painful to watch.
'Coasting on past momentum. Failing to innovate and failing to capitalize on innovations like Kinect. Touting strategic and market success when you're just experiencing your competitor's stumbling failure (yes, Sony, Nintendo - you are, I'm afraid, stumbling failures).
'A complete lack of tactical versus strategic understanding of the long game of the living room.'
The new machine codenamed Durango is set to be revealed at the upcoming E3 games show in the USA.
Brown said 'Read some of the fine-print at the Xbox registered developer program page (that "membership" would cost you $10,000/year and a ton of paperwork, with Microsoft holding veto power over your game being published), navigate the mess through to learning about XBLA (also costly, paperwork and veto approval) and you may end up learning about a carved off little hard-to-find store with a few thousand stunted games referred to as XBLIG where Microsoft has ceded their veto power (and instead just does nothing to promote your games).
'This is where indie developers have found they can go in order to not make money on Xbox, despite an installed base of 76M devices. Microsoft, you are idiotic to have ceded not just indie game developers but also a generation of loyal kids and teens to making games for other people's mobile devices.'
Mr Brown went on to call the operating system, particularly the first two levels of the Xbox 360 dashboard, as 'creaky, slow and 'full of s***'.