Microsoft reverses controversial game licensing policies [Updated]

YET ANOTHER UPDATE (5:24 Eastern): Microsoft has confirmed to Kotaku that the "family sharing" and digital cloud library access features that were planned to be in the Xbox One are indeed gone thanks to today's policy reversal. Xbox one users will also apparently have to download a "Day One" patch to enable the offline mode.

FURTHER UPDATE:

"You can play, share, lend, and resell your games exactly as you do today on Xbox 360." That is now the official word from Microsoft.

Microsoft says it "imagined a new set of benefits such as easier roaming, family sharing, and new ways to try and buy games," but that it also realized that "the ability to lend, share, and resell these games at your discretion is of incredible importance to you."

No Internet connection will be required to play offline Xbox One games; the Internet will only be required for a one-time initial system setup. There will be no limitations on sharing or selling game discs. Downloaded games will be playable offline, and there will be no regional restrictions on those games.

On the downside, there will be no digital "family" sharing as was previously announced, and disc-based games will require the disc to be in the tray to be played.

Here is the full text on this change directly from Microsoft:

Last week at E3, the excitement, creativity and future of our industry was on display for a global audience.

For us, the future comes in the form of Xbox One, a system designed to be the best place to play games this year and for many years to come. As is our heritage with Xbox, we designed a system that could take full advantage of advances in technology in order to deliver a breakthrough in game play and entertainment. We imagined a new set of benefits such as easier roaming, family sharing, and new ways to try and buy games. We believe in the benefits of a connected, digital future.

Since unveiling our plans for Xbox One, my team and I have heard directly from many of you, read your comments and listened to your feedback. I would like to take the opportunity today to thank you for your assistance in helping us to reshape the future of Xbox One.

You told us how much you loved the flexibility you have today with games delivered on disc. The ability to lend, share, and resell these games at your discretion is of incredible importance to you. Also important to you is the freedom to play offline, for any length of time, anywhere in the world.

So, today I am announcing the following changes to Xbox One and how you can play, share, lend, and resell your games exactly as you do today on Xbox 360. Here is what that means:

An internet connection will not be required to play offline Xbox One games – After a one-time system set-up with a new Xbox One, you can play any disc based game without ever connecting online again. There is no 24 hour connection requirement and you can take your Xbox One anywhere you want and play your games, just like on Xbox 360.

Trade-in, lend, resell, gift, and rent disc based games just like you do today – There will be no limitations to using and sharing games, it will work just as it does today on Xbox 360.

In addition to buying a disc from a retailer, you can also download games from Xbox Live on day of release. If you choose to download your games, you will be able to play them offline just like you do today. Xbox One games will be playable on any Xbox One console — there will be no regional restrictions.

These changes will impact some of the scenarios we previously announced for Xbox One. The sharing of games will work as it does today, you will simply share the disc. Downloaded titles cannot be shared or resold. Also, similar to today, playing disc based games will require that the disc be in the tray.

We appreciate your passion, support and willingness to challenge the assumptions of digital licensing and connectivity. While we believe that the majority of people will play games online and access the cloud for both games and entertainment, we will give consumers the choice of both physical and digital content. We have listened and we have heard loud and clear from your feedback that you want the best of both worlds.

Thank you again for your candid feedback. Our team remains committed to listening, taking feedback and delivering a great product for you later this year.

UPDATE: Microsoft says it has changed certain policies for the Xbox One "as a result of feedback from the Xbox community." A link to the "latest" details on the move currently points to a broken page, though. More to come.

ORIGINAL STORY

Take this with a grain of salt for now, but Giant Bomb news writer Patrick Klepek is reporting that "multiple sources" are telling him that Microsoft will be announcing a complete reversal of its controversial Xbox One game licensing and online policies later today.

According to the report (which is currently killing Giant Bomb's servers), this means the Xbox One will no longer have to check in regularly online but will instead only require an Internet connection during the initial system setup. Game discs will be just as portable as they were on the Xbox 360, with no restrictions on resale or transfer, and downloadable games will work offline as well as online. Region locks on the system will also reportedly be dropped.

A separate report from WhatTheHiFi confirms the essential facts of the Giant Bomb report through its own unnamed sources, adding that developers are being informed of the change before consumers hear about it officially later today.

While neither site gives any more details on where this information is coming from, Klepek says that his sources tell him that Microsoft has definitely been listening closely to consumer feedback in the weeks since first revealing its information.

We're reaching out to our own sources on this and will of course let you know when anything official comes out.