diff --git a/test/sanity/package.json b/test/sanity/package.json
index 5a3885122f6..1402946cba9 100644
--- a/test/sanity/package.json
+++ b/test/sanity/package.json
@@ -4,7 +4,7 @@
   "license": "MIT",
   "main": "./out/index.js",
   "scripts": {
-    "postinstall": "npx playwright install chromium webkit",
+    "postinstall": "playwright install --with-deps chromium webkit",
     "compile": "node ../../node_modules/typescript/bin/tsc",
     "start": "node ./out/index.js"
   },
diff --git a/test/sanity/src/context.ts b/test/sanity/src/context.ts
index 5f5e3a4268a..d8118b985e9 100644
--- a/test/sanity/src/context.ts
+++ b/test/sanity/src/context.ts
@@ -121,7 +121,7 @@ export class TestContext {
 
 		for (let attempt = 0; attempt < maxRetries; attempt++) {
 			if (attempt > 0) {
-				const delay = Math.pow(2, attempt) * 1000;
+				const delay = Math.pow(2, attempt - 1) * 1000;
 				this.log(`Retrying fetch (attempt ${attempt + 1}/${maxRetries}) after ${delay}ms`);
 				await new Promise(resolve => setTimeout(resolve, delay));
 			}
@@ -564,7 +564,7 @@ export class TestContext {
 	 * @param folder The optional workspace folder path to open.
 	 * @returns The constructed web server URL.
 	 */
-	public getWebServerUrl(port: string, token?: string, folder?: string): string {
+	public getWebServerUrl(port: string, token?: string, folder?: string): URL {
 		const url = new URL(`http://localhost:${port}`);
 		if (token) {
 			url.searchParams.set('tkn', token);
@@ -576,7 +576,7 @@ export class TestContext {
 			}
 			url.searchParams.set('folder', folder);
 		}
-		return url.toString();
+		return url;
 	}
 
 	/**
diff --git a/test/sanity/src/server.test.ts b/test/sanity/src/server.test.ts
index d0f8e2dad2c..9b0431f080b 100644
--- a/test/sanity/src/server.test.ts
+++ b/test/sanity/src/server.test.ts
@@ -94,6 +94,8 @@ export function setup(context: TestContext) {
 			context.log(`Starting server ${entryPoint} with args ${args.join(' ')}`);
 			const server = spawn(entryPoint, args, { shell: true, detached: os.platform() !== 'win32' });
 
+			let testError: Error | undefined;
+
 			server.stderr.on('data', (data) => {
 				context.error(`[Server Error] ${data.toString().trim()}`);
 			});
@@ -107,7 +109,10 @@ export function setup(context: TestContext) {
 				const port = /Extension host agent listening on (\d+)/.exec(text)?.[1];
 				if (port) {
 					const url = context.getWebServerUrl(port);
-					runWebTest(url).finally(() => context.killProcessTree(server.pid!));
+					url.pathname = '/version';
+					runWebTest(url.toString())
+						.catch((error) => { testError = error; })
+						.finally(() => context.killProcessTree(server.pid!));
 				}
 			});
 
@@ -115,17 +120,19 @@ export function setup(context: TestContext) {
 				server.on('error', reject);
 				server.on('exit', resolve);
 			});
+
+			if (testError) {
+				throw testError;
+			}
 		}
 
 		async function runWebTest(url: string) {
-			try {
-				context.log(`Fetching ${url}`);
-				const response = await fetch(url);
-				assert.equal(response.status, 200);
-				assert.equal(await response.text(), context.commit);
-			} catch (error) {
-				assert.fail(error instanceof Error ? error.message : String(error));
-			}
+			context.log(`Fetching ${url}`);
+			const response = await fetch(url);
+			assert.strictEqual(response.status, 200, `Expected status 200 but got ${response.status}`);
+
+			const text = await response.text();
+			assert.strictEqual(text, context.commit, `Expected commit ${context.commit} but got ${text}`);
 		}
 	});
 }
diff --git a/test/sanity/src/serverWeb.test.ts b/test/sanity/src/serverWeb.test.ts
index 397b48b6c60..4a59cde7756 100644
--- a/test/sanity/src/serverWeb.test.ts
+++ b/test/sanity/src/serverWeb.test.ts
@@ -3,7 +3,6 @@
  *  Licensed under the MIT License. See License.txt in the project root for license information.
  *--------------------------------------------------------------------------------------------*/
 
-import assert from 'assert';
 import { spawn } from 'child_process';
 import os from 'os';
 import { TestContext } from './context';
@@ -100,6 +99,8 @@ export function setup(context: TestContext) {
 			context.log(`Starting server ${entryPoint} with args ${args.join(' ')}`);
 			const server = spawn(entryPoint, args, { shell: true, detached: os.platform() !== 'win32' });
 
+			let testError: Error | undefined;
+
 			server.stderr.on('data', (data) => {
 				context.error(`[Server Error] ${data.toString().trim()}`);
 			});
@@ -112,8 +113,10 @@ export function setup(context: TestContext) {
 
 				const port = /Extension host agent listening on (\d+)/.exec(text)?.[1];
 				if (port) {
-					const url = context.getWebServerUrl(port, token, test.workspaceDir);
-					runUITest(url, test).finally(() => context.killProcessTree(server.pid!));
+					const url = context.getWebServerUrl(port, token, test.workspaceDir).toString();
+					runUITest(url, test)
+						.catch((error) => { testError = error; })
+						.finally(() => context.killProcessTree(server.pid!));
 				}
 			});
 
@@ -121,28 +124,28 @@ export function setup(context: TestContext) {
 				server.on('error', reject);
 				server.on('exit', resolve);
 			});
+
+			if (testError) {
+				throw testError;
+			}
 		}
 
 		async function runUITest(url: string, test: UITest) {
-			try {
-				const browser = await context.launchBrowser();
-				const page = await browser.newPage();
+			const browser = await context.launchBrowser();
+			const page = await browser.newPage();
 
-				context.log(`Navigating to ${url}`);
-				await page.goto(url, { waitUntil: 'networkidle' });
+			context.log(`Navigating to ${url}`);
+			await page.goto(url, { waitUntil: 'networkidle' });
 
-				context.log('Waiting for the workbench to load');
-				await page.waitForSelector('.monaco-workbench');
+			context.log('Waiting for the workbench to load');
+			await page.waitForSelector('.monaco-workbench');
 
-				await test.run(page);
+			await test.run(page);
 
-				context.log('Closing browser');
-				await browser.close();
+			context.log('Closing browser');
+			await browser.close();
 
-				test.validate();
-			} catch (error) {
-				assert.fail(error instanceof Error ? error.message : String(error));
-			}
+			test.validate();
 		}
 	});
 }