The Xbox LIVE Terms of Use and Code of Conduct are designed to create a place where people can safely enjoy all of the ways to interact on our service[…] without fear of discrimination or harassment. As the service evolves and our customers provide us with feedback, these rules evolve to incorporate new features or changes in how people wish to interact.

With that in mind, I’d like to announce an update to the Xbox LIVE Terms of Use and Code of Conduct which will allow our members to more freely express their race, nationality, religion and sexual orientation in Gamertags and profiles. Under our previous policy, some of these expressions of self-identification were not allowed in Gamertags or profiles to prevent the use of these terms as insults or slurs. However we have since heard feedback from our customers that while the spirit of this approach was genuine, it inadvertently excluded a part of our Xbox LIVE community. This update also comes hand-in-hand with increased stringency and enforcement to prevent the misuse of these terms.

I truly believe that our diversity is what makes us strong: diversity in gaming and entertainment options, and diversity in the people that make up this amazing community. I look forward to seeing you on LIVE soon.

A Letter from Marc Whitten: Update to Xbox LIVE Code of Conduct - via Slashdot via Crystaltips/Wonderlandblog. Cheers.