Battle begins: modded Xbox 360s banned from Live!!
Microsoft Confirms Banned 360s
Today Microsoft spokesperson Major Nelson confirmed on his blog that modded Xbox 360s are being banned from Xbox Live. Nelson says Microsoft has a zero-tolerance policy towards modded consoles accessing the service in an attempt to ensure a level playing field for all users. If Xbox Live detects a mod chip in your console, you will be treated to this screen:
If you see this, you have been banned from Xbox Live.
The act of installing a mod chip in your 360 involves opening the console and soldering the equipment into the hardware, effectively voiding your warranty. The most common reasons for going through the effort are to get around the region lock on games and to play copied software.
This seems to have been put into mass play beginning with the Halo 3 Beta rollout - BIGVIP hints at it. Xbox-Scene reports mixed-bag effects: some firmware mods get detected and some don't, although they observe that Microsoft tends to "ban with delay". Xbox-Scene thinks that Xbox Live's detecting backup discs, and this despite using "new firmware with disc-jitter added" - and this despite earlier reports that backups worked fine with Spring Update.
Apparently the mod-detect feature wasn't piggybacked to Spring, but to the release of the Halo 3 Beta.
The official line is that this protects the integrity of the Xbox Live community and the XBL service, "the protection of our partners and the benefit of our users." You already know our stance: boo to piracy (but make next-gen a little more economically accessible), no flag-waving for either side, and honestly, those Halloween brick rumors still hurt, half-a-year on.
Note that the ban applies only to the console, not the user, so there is nothing stopping a modder from obtaining another, unmodded system and joining in the fun on Live.
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& XBO360 owner 
35 ps3 games and still counting...more games,coming soon... 
Originally Posted by SQP_GR
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