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This may be the first instance where Microsoft has leveraged its ability to freeze out someone's legally purchased console

The use of remote "remote delete" or "remote lockout" tools to combat theft and piracy is a hot topic of debate across a number of device form factors, including in the console space.  For all the concerns over privacy and the deep ties to the cloud in its Xbox One, Microsoft Corp. (MSFT) had never used rumored remote lockout technology on the console -- until now.

A indeterminate, but small number of users have been locked out of Xbox LIVE and "other accounts" affiliated to their consoles (likely Microsoft services).  The punishment basically bricks the consoles the users (presumably) legally purchased.  The good news for those effected is that punishment isn't neccessarily eternal.

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UPDATE/CLARIFICATION:

Microsoft has apparently come back, saying VMC's statements aren't entirely accurate.  It says while it did suspend the accounts, it adds that a terms of service (ToS) suspension doesn't make the console unplayable offline as VMC seemed to imply and as Kotaku (who first obtained the letter from VMC) stated.

Microsoft explains:

To be clear, if a console is suspended from Xbox Live for a violation of the Terms of Use, it can still be used offline. Microsoft enforcement action does not result in a console becoming unusable. Suspensions for both consoles and accounts are determined by looking at a number of factors. To avoid enforcement action including suspension from the service, users should follow the Xbox Live Terms of Use and Code of Conduct.

So depending on your view the console is "bricked" from a cloud/multiplayer gameplay standpoint, but is still capable as functioning as an entertainment hub.  This further justifies Microsoft's response as really it's only locking the violators out of services it actively supports.  And as I go on to state below, violators may be in far worse legal trouble than just having features on their console locked out.

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But first -- what caused Microsoft to crack down so hard?  It all began with the leak of videos related to an upcoming -- and unannounced -- Gears of War remake/remaster for Xbox One, potentially ruining the sense of surprise for fans.  

Gears of war
This is one of the leaked screenshots that started the banfest. [Image Source: TechnoBuffalo]

With the Xbox One finally starting to come on strong after a disappointing pace of sales in 2014, Microsoft is eager to leverage the franchise which it bought from Epic Games, and reportedly it hoped to surprise fans with news of the remake, which reportedly is nearing completion.  As is commonly done in these kinds of blockbuster game productions, Microsoft turned to a third party contractor to test early builds of the game.

Gears of war

The contractor it turned to was VMC Consulting Inc.  Headquartered in the same town that Microsoft calls home -- Redmond, Wash. -- VMC has been gaining traction thanks to its clever business model that subcontracts the task of testing to a horde of part-time (or in some cases full-time) public beta testers.

VMC global beta testing

VMC has generally kept a pretty tight control on its testers, avoiding costly, reputation-damaging leaks.  But Gears of War apparently excited some testers so much they abandoned their duties and started leaking.  Additionally other testers are believed to carelessly shared images or video with friends, who then passed along that data to content sharing sites or news sites.  Describes VMC in a letter obtained by Kotaku:

Recently, multiple leaks were perpetrated by several GBTN community members. In one case, a member who was participating in that test shared a screenshot on Snapchat with their friend, who wasn’t part of the project, but tricked his friend by saying he didn’t believe him when he said they were working on the same project. Upon reception of the screenshot, the friend who received the Snapchat leaked it online, betraying his friend as well as his NDA with VMC Games. While the tester who first took the screenshot didn’t think he was doing anything bad, he was still going against the NDA, and was part of the cause why the information got leaked. Because of this, both members were permanently removed from the community and addressed to our legal department, as per the terms of the NDA.

But the part that is really grabbing attention is VMC's acknowledgement that Microsoft remotely locked out the violators' consoles.  It writes:

...as per that agreement with the testers in fault, Microsoft also permanently disabled their Xbox LIVE accounts (as well as other suspected accounts present on their Xbox One kits) and temporarily blocked all of their Xbox One privileges – meaning that for a period of time which Microsoft decides on depending on the severity of the offense, their Xbox One is entirely unusable.

For those confused, Microsoft's Xbox One Live account is tied to basically every feature on the console including the Xbox Store, playing both physical media and downloaded games, using the TV channel listing, movie playback, social gaming features, and various other common applications.  If your LIVE account is revoked, you may have temporary access to physical media games and some of your apps, but when the console does its daily "phone home", you will basically be locked out. (See clarification from Microsoft above on ToS suspensions.)

Xbox One lock
[Image Source: Penny Arcade]

This is the first time, though, that Microsoft has been confirmed to have used the LIVE requirements to brick the console of a group of uncooperative users.  And while many will find that action alarming, it's important to bear in mind that any internet connect console -- including the Sony Corp. (TYO:6758) PlayStation 4 -- may have similar lockout capabilities.

And it's also worth noting that while the letter itself focuses somewhat on the bricked consoles and on scolding the naughty beta testers behind the leaks, largely overlooked in the media discussion are the passages in which it alludes to legal rammifications for the testers.

Xbox One Controller

[Image Source: GenGame.net]

All beta testers employed by VMC sign legally binding nondisclosure agreements (NDAs).  Such agreements typically care stiff financial penalties if breached.  Thus from a dollars and cents standpoint, while the LIVE lockout might have been a rude smack in the face for offenders, those who received the punishment have far bigger concerns.  They may lose literally tens of thousands of dollars or more for compromising their employer and its business partner's product.  That's a little more of a headache than having your Xbox bricked.

Sources: Kotaku, TechnoBuffalo





"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997






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