Speaking with Gamespot, Penello confirmed that the matter stems from the console’s disc-slot, and is not a cooling issue. He told the site, “We don’t support vertical orientation; do it at your own risk. It wouldn’t be a cooling problem, we just didn’t design the drive for vertical. Because it’s a slot loading drive, we just didn’t design it for both”.
He added, “We found, interestingly enough, that 80 percent of people, believe it or not, have their Xbox [360] horizontally”.