You’ll recall that Microsoft recently banned a bunch of people from Xbox Live because they had modded their 360s. Modding is against the rules, don’t you know? Microsoft told VentureBeat not to believe the numbers being thrown around—the number most relayed is 1 million banned 360s—because it never releases numbers to anyone.
Again, the larger debate is: should you be allowed to mod your console? I think so, but that’s probably because my opinion on every single issue is, “So long as you don’t bother me in any direct way, do what you want.” You bought the hardware (the 360 itself) so if you want to whip out a soldering iron or flash its DVD drive with a custom firmware, be my guest.
At the same time, Microsoft has the right to say, “Look, Xbox Live is a service that we’re trying to keep as clean as possible. If you’re playing a game on a modded console, it’s much harder for us to ensure that the service is as clean as possible.” (Where “clean” means free from cheating, hacks, etc.) Plus, why should someone be able to play a pirated copy of Modern Warfare 2 on Xbox Live when everyone else paid for it? It’s not “fair,” if you will.
That a law firm is possibly looking to start a class-action lawsuit over the bans is sorta silly. The law firm may have something when it comes to Microsoft owing some of these people money for the remainder of their Xbox Live contract, but I don’t know what the EULA or TOS for Xbox Live says about service termination. If you’re banned for being a jerk, are you entitled to any money left over on the contract?
The moral of this particular story is, no, Microsoft didn’t ban “1 million” Xbox 360s.
A surefire way to avoid being banned? Don’t use your modded Xbox 360 on Xbox Live.