So, it seems as though Microsoft has managed to work out who has chipped their Xbox... and disconnected them from Xbox Live!
As reported by the BBC (read the article here) Microsoft have disconnected up to 600,000 gamers from the Xbox Live service whilst the Guardian are estimating it could be up to 1 million.
This is a rather bold from the company and does make you wonder how well they are going to manage the potential fallout from such a decision. Legally, they've taken the correct decision but from a PR stance it could be a complete disaster! The most prominent question being asked at the moment is how do MS know who the pirates are? In order to disconnect people they must have been receiving information about the system status and any modifications the user has made. This opens up questions about what else MS are doing with the information they have collected and what privacy issues this may expose.
At the time of writing 65 high profile news publications were running the story with only a statement comment from Microsoft of:
We'll have to wait and see if the negative press has any lasting effect on an already damaged (from Vista) Microsoft brand.