Anywhere between an estimated 600,000 and 1 million players who use Microsoft's Xbox Live gaming service will be cut off from the service because they have modified their game consoles or played games that were illegally downloaded from file-sharing sites, according to the company.
(Msnbc.com is a joint venture of Microsoft and NBC Universal.)
The timing of the statement coincides with the release this week of "Call of Duty: Modern Warfare 2," a highly anticipated Xbox 360 game. The game's release means big sales — but also sales of pirated copies, which are illegal.
There are more than 20 million players worldwide who use the Xbox Live gaming service, according to Microsoft. The service lets gamers play each other online as well as buy and download games.
Dave Taylor, publishing director for GamerZines.com, said he understands why some people may want to modify their consoles.
"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," he said.
"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."
However, he said, "the biggest problem in banning modded consoles — and this gets missed by most people — is that it is the console itself that gets banned. So many of these consoles get sold secondhand, even sometimes unwittingly by stores (that) accept them as trade-ins, to people who assume they have just bought a functioning console. And while it might technically boot up, the console is blacklisted and therefore pretty much useless to them."
Microsoft, he said, "needs to find a way to address this, or else it risks annoying the modders who make up 1 percent of their audience and the second-hand purchasers."
The company "needs to do a better job of explaining to people why modding consoles isn't acceptable, and needs to find a way to help people tricked into purchasing blacklisted consoles," said Taylor.
In addition, "any attempt to disassemble, decompile, create derivative works of, reverse engineer, modify, further sublicense, distribute, or use for other purposes the Service, any game, application, or other content available or accessible through the Service, or any hardware or software associated with the Service or with an original Xbox or Xbox 360 console is strictly prohibited and may result in cancellation of your account and/or your ability to access the Service, and the pursuit of other legal remedies by Microsoft."
Some sites have warned about gamers tinkering with their Xboxes.
"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."