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I'll tell you the thing that makes me a little doubtful about any significant number of innocent parties having been affected by this, DF. I'm not an "avid" gamer, but I have an XBox 360, and have spent a considerable amount of money on games over the last few years. If I hadn't touched my console in any way (which I haven't), and I got cut off from the "Live" service, and hence unable to play any multiplayer games, then I'd be screaming blue murder to anyone who would listen, and "Joe Public gets screwed by Large Corporation" is the type of story that the press absolutely adores - you can bet that it would make the news.
The fact that it's only the "Microsoft cuts off modded consoles" story that's made the news, and not the "innocent gamer gets cut off by evil Microsoft" (and I literally cannot find one single story saying anything like that) makes me highly dubious that it's occuring.
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