Actually we're not entirely sure what he says. He seems to start speaking tongues halfway into his whole reliability-issue-was-a-hiccup comment. He says something about downloading curve, or something about him, or maybe he mentions peanuts, it's hard to say. This is what I got:

"Xbox live, which was immensely risky, we hadn't been in the hardware business. We even had a hiccup in terms of ahhhhh... me not downloading curve... on that one reliability issue we ran into it. But Xbox alone has been fantastic success. A huge asset for the company."

http://kotaku.com/341813/gates-live-outage-a-hiccup