Microsoft Bans Players from Live Services for Playing Pirated Games

"All consumers should know that piracy is illegal and that modifying their Xbox 360 console to play pirated discs violates the Xbox Live terms of use, will void their warranty, and result in a ban from Xbox Live," Microsoft said in a statement.

"The health of the video game business depends on customers paying for the genuine products and services they receive from manufacturers, retailers, and the third parties that support them," it added.

How did Microsoft find out about the piracy?
X-box 360 consoles comes equipped with digital-rights management, or DRM, technologies that are capable of detecting pirated software, but even then some players managed to modify their consoles to circumvent the protections.

"It's fair for people to feel that they should be able to do whatever they want with something that they have bought, but it's also fair for Microsoft to do everything it can to reduce the risk of piracy," said Dave Taylor, publishing director for GamerZines.com.

"In some cases though, modding (modifying) is done to allow a bigger hard drive, and given that the supplied hard drives are still very small comparative to what is available on the market, and expensive also, you can see why some people are going to be very angry," he further said.

However, it’s still not clear how Microsoft has been able to uncover the modifications made by the users.

More than 20 million gamers worldwide use X-box 360 services, according to Microsoft. These services offered by the Microsoft lets players play online with each other as well as download and buy games.

What Microsoft’s move means for the users?
The gamers who have been banned by the Microsoft it is certainly a bad news. Microsoft has made it clear that the consoles banned from X-box Live services will still function if gamers are playing offline.

But the players booted out from the X-box Live service site of the X-box will not be able to sign in to their accounts or play with other players over the Internet.

One such banned player from the site told the U.K.’s Radio 1 that he was “gutted” and “distraught” after finding out about Microsoft’s decision. According to him, he had spend more than $100 to get his X-box modified so that he could play pirated games.

Some analysts are of the view that Microsoft needs to find some middle ground with the modders because they make up 1 percent of their audience and second hand purchasers.

Some sites are also warning gamers about modding their consoles.

"Do not mod your console, you will be wasting money on something that will get you punished," warns one site, WikiHow in an article about "How to avoid getting banned from Xbox Live".