Banned Xbox 360 Consoles Find Home on eBay, Craigslist

After Microsoft bans hundreds of thousands of "modded" Xbox 360 consoles from the Xbox Live online service, the consoles start popping up on Internet auction sites, at heavily discounted prices.

Online auction site eBay and the grassroots online classified site Craigslist are flooded with offers of Microsoft Xbox 360 gaming consoles that have been "bricked", or banned, from the console's community game play service, Xbox Live.

According to a report in Information Week, Microsoft banned up to 1 million consoles after suspecting the devices had been "modded", or altered to allow downloads of pirated software. The report comes amid the release of Call of Duty: Modern Warfare 2, one of the most highly anticipated game titles of the year. Released on Tuesday, the title saw sell-through sales of $310 million in North America and the U.K. in the first 24 hours, according to internal Activision estimates.

On November 4, Microsoft's director of programming for the company's gaming network Xbox Live, Larry 'Major Nelson' Hryb, wrote a blog post acknowledging Microsoft has been actively banning modified Xbox 360 consoles that are able to play pirated games.

"Our commitment to combat piracy and support safer and more secure gameplay for the more than 20 million members of our Xbox Live community remains a top priority," he wrote. "All consumers should know that piracy is illegal, and that modifying their Xbox 360 console to play pirated discs, violates the Xbox Live terms of use, will void their warranty and result in a ban from Xbox Live."

A quick search of modded Xbox 360 consoles in major Craigslist centers of commerce like New York City, Chicago and Los Angeles turn up hundreds of consoles offered for sale, with some listings positioning the Xbox Live-disabled devices as perfect for younger children or adults with no interest in community gaming.

Some on Craigslist are posting listings looking for blocked consoles, albeit for a steep discount. Most "for sale" postings list for between $150-$200 with a selection of games, cables and controllers. Bids on banned consoles on eBay started as low as $10, with "Buy it Now" offers starting around $70.

"When a Gamertag comes up as violating our policies for online behavior, the person who owns that Gamertag is punished by being banned from the service," Nelson explained. "Keep in mind, this isn't just a ban on a particular game. This is a ban on the Xbox Live service as a whole, so you won't be able to go online at all during your ban. Initially, you may be banned for a day, a week, or depending on severity, permanently. Kiss that $50 goodbye."

Hyrb also noted the health of the video game business depends on customers paying for the genuine products and services they receive from manufacturers, retailers, and the third parties that support them.

"This would also be a good time to remind you that the warranty on an Xbox 360 console is not transferable and if you purchase a used console that has been previously banned, you will not be able to connect to Xbox Live," he said.