The service encountered problems from the start, with Stuff.tv users complaining of connection errors before the service was pulled altogether within hours.
In a statement, Sky and Microsoft said: "Sky Player on Xbox 360 launched on Tuesday 27th October and was met with phenomenal demand, with many tens of thousands of customers attempting to sign up within the first hour of launch.
"Unfortunately due to the unprecedented levels of simultaneous demand, we did not have the capacity to satisfy all service requests and therefore temporarily suspended all access to the service."
The companies are now planning to relaunch the service today, will roll-out happening gradually to prevent the same problem happening again.
The statement continued: "Today, the roll-out will be implemented in phases to ensure that consumers experience both a smooth sign-up process and high-quality experience.
"We apologise to all customers that have not been able to experience Sky Player on Xbox 360, we assure them that this is being rectified and we thank them for their patience."
What do you think the explanation? Be sure to read our 5 things you need to know on the service, and let us know if you'll be signing up below.