“We are working with our engineers toward a fix as fast as we can,” said Microsoft’s most recent update on the Marketplace issues, which came at 12:42 p.m. ET. A similar update was posted at 12:28 p.m. ET for the sign-in and website problems.

We’ll keep you posted on the situation.

Update: According to an update on the Xbox Live Service Status page, purchasing capabilities have been restored as of 2:01 p.m. ET. Users previously receiving 80154080 and 8015000A error messages should be able to buy Microsoft Points once again.

Update 2: The Marketplace issues are gone, but a new problem has cropped up, according to an update posted to the Xbox Live status page at 3:02 p.m. ET: Users are having difficulty accessing save games and other data in the Xbox 360’s cloud storage, and are seeing error code 0x807b0198. “We are working closely with our engineers to restore Cloud functionality,” Microsoft said.

Update 3: The Xbox Live cloud save feature is back online and Xbox is compensating those affected with a free month of Xbox Live Gold membership. A statement published on Major Nelson’s blog read:

We want to thank all of our Xbox LIVE members impacted by the Cloud Saved Games service issue for your patience and understanding. It took longer than we expected to get back to full performance as we needed to ensure the integrity of everyone’s game saves. Whether you couldn’t access your game saves for a couple of hours or a couple of days, we sincerely apologize for the delay and inconvenience. We will be automatically applying a one-month extension to the Xbox LIVE Gold memberships of everyone who was impacted. We can assure you we’ll also be doing a thorough post mortem to help prevent this from happening again.

The statement also says that the company knows exactly who was affected and will be automatically applying the free month of Xbox Live Gold membership to those users’ accounts.