According to all the publicity, Microsoft's Halo 2 was supposed to be the ultimate XBox Live title and gamers were told that in order to make the most of their investment they would have to join XBox Live. It turns out that Halo 2 was a lot more since the latest news suggest that Microsoft used the popularity of Halo 2 as a Trojan horse in order to put into effect a clause that all XBox Live users sign allowing the company to have a peek inside their consoles.
The process however, started before the game shipped and in the days immediately preceding the launch a sharp increase was noted in the number of users kicked out of the online service's servers. The official line from Microsoft is that users who own a modified XBox may use the changes to cheat during gameplay, something which would have an adverse effect on whole service. While this is a valid reason, the reason most gamers modify their consoles for is the ability to play copied or pirated games. It is also likely that Microsoft wants to send a message to owners of modified consoles that they will not be able to make full use of their XBox unless they give up on the modifications.
Microsoft has clearly stated that it has no plans to go after individual users, stressing that it will pursue those manufacturing pirated games or mass-producing Xbox modifications, even though the legal community claims that the legality of modifying other people's technology remains unclear.
Microsoft is working and learning hard from the whole modification background for its XBox console in order to avoid similar problems when it launches its next-generation unit, expected in fall 2005. Services which require an online connection to be made have proved a positive incentive in preventing piracy. Many gamers have suggested that modifications to consoles may sometimes be considered a desirable aspect of gaming for the manufacturers since they guarantee popularity. The challenge for those manufacturers however, is to harness that popularity and get console owners to keep buying games, something which can best be achieved by the price for new games dropping to a more reasonable figure.