It's an issue cited several times in articles about the lack of LIVE support in SA, a subject I've followed with some interest. I've been trawling Google for a relevant quote, but can't turn anything up now. It might've been attributed to Craig Nicholson at Microsoft SA, but I'm not 100% certain.
As a journalist, I've previously exchanged email on the topic with the head of the LIVE EMEA region, who did not deny this particular suggestion. He didn't confirm it either, to be fair.
Official quotes notwithstanding, it's an entirely legitimate concern. I know quite a few people with modded consoles, and despite Microsoft's efforts, they're still signing into LIVE. Why should Microsoft invest millions of dollars in installing and maintaining an infrastructure only some of its users are actually entitled to use? While there are illegitimate users of LIVE all over the world, I suspect that number is proportionally higher here in SA. After all, we're a country whose console history is made up almost entirely of a modded / knock-off market - the Reggies rip-off, modded PlayStation 1 and 2s, etc. There's a reason China has no official LIVE support either, and something tells me their reputation for piracy is a part of that.
