QUOTE(Mr_Milenko @ Nov 19 2009, 10:48 AM)

Though the idea of suing the shit out of Microsoft because we got caught doing stupid shit is a great idea in this economy, I wouldn't be surprised if everyone got permanently banned from Live! because of this ridiculous lawsuit. You have to take into account all of the legal shit Microsoft tied into there TOS, for example:
1) You own the hardware, you do not own the software wich is on the hardware or makes the hardware work, you are licensed by Microsoft to use the software wich in turn runs the hardware.. Shitty yes, legal yes, yours? Nope.. You can in fact legally replace the software that operates the hardware, if it ALL gets replaced. This is why projects like Xbox-Linux Free60 and libxenon are legal.
2) They do not cripple your save games, your Xbox can in fact still function as a gaming console. You just cant use your saves on another Xbox, this sadly is also perfectly legal. The xbox runs on a license system everything is hardcoded with DRM, If your console gets banned it can no longer sign personal content, therefore it cannot be used on another system.
3) Downloadable Content, again.. Licensing, You do not own the DLC, you own a license to use it. This license can be revoked at anytime for any number of reasons. If your gamertag is still active and you are using your DLC on the same xbox you have purchased it on, then it will still work on THAT xbox. If you are using it on a different xbox you have to be signed into live to use it.
4) Physical Media, this is where it kind of boggles me... But according to Microsoft/The Videogame Industry, You don't really own this. You own a license to use it in your game console, You can not make a digital copy unless authorized by the owner of the software. When you sell/trade/lend out your copy of the game, you are transfering your license to a 3rd party and are no longer legally allowed to use it, hence the reason you can not run it from your HDD anymore and a disc is needed in the drive.
Microsoft has everyone by the balls, They are a multi billion dollar corporation that employs hackers AND modders to battle everything that we throw at em. They know how to word everything in order to keep there asses out of trouble. Obviously Microsoft would do this seeing as its CEO is the richest pirate in the world. Gotta love a country where a company can start up by stealing an operating system, re-branding it, and earn billions.
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See that is where there is one problem. This licensing system that you say Microsoft is trying to tout won't hold much water in court. This is because when you purchase the game you sign no contract nor do you agree to any license prior to the purchase. On this point Microsoft has no leg to stand on. As for the hardware and its required software. They advertise a system which plays xbox 360 games as well as has the dashboard feature. At no point in their advertisement do they state that you are purchasing only the hardware and a license to use their software. Should they cripple the software the 360 no longer functions as advertised. Therefore they are violating any number of consumer protection laws and could be slammed for false advertising.
Unfortunately for Microsoft and the Video game industry this licensing argument is equivalent to swiss cheese and most judges will take the opportunity to chastise them if given the chance. They are treading very very dangerous legal waters, and in these waters they are a small insignificant fish in comparison to the power a judge wields. Also DRM software is currently ill favored by many members of the legal community because it skates on thin ice due to the retail nature of the products it is included in as well as the affects it has on things outside of their domain of influence ie pcs, ipods, etc.
I'll be straightforward. I am currently doing a lot of research into what M$ can and can't due in these circumstances. The law is convoluted and the Circuits have differing views on what can go on. It frustrates me to no end how corporations disregard the law. I graduate from law school next May so this has gotten me interested in an area of law I once thought was boring.
TOS and EULA aren't bulletproof and most clauses can be disregarded to uneven bargaining power. I mean some EULA and TOS can be lumped under deceptive business practices when you consider how the product was marketed.