I have read a report of a gamer being banned from Xbox Live because she identified as a lesbian. If this is true, it is a serious allegation against Microsoft, and one that could lead to a class action suit or similar legal action by civil rights groups.
Here's an extract from a report of the incident:
Teresa says that she was harassed by other players and later suspended from Xbox Live because she identified herself as a lesbian in her profile. When she
appealed to Microsoft, she says they told her that other gamers found
her sexual orientation "offensive." Teresa says: "I just recently saw a thing on your site about someone's gamer tag being banned because it had the word gay in the tag. I had a similar incident, only my account was suspended because I
had said in my profile that I was a lesbian. I was harassed by several
players, 'chased' to different maps/games to get away from their
harassment. They followed me into the games and told all the other
players to turn me in because they didn't want to see that crap or
their kids to see that crap. As if xbox live is really appropriate for kids anyways! My account
was suspended and xbox live did nothing to solve this, but instead said
others found it offensive.
You can't use as a justification for discrimination that "some people find it offensive" - some people find the existence of non-white people offensive, but we do not kowtow to such bigotry in nations purporting to uphold principles of equality and freedom. If anyone else has been discriminated against by Microsoft for gender, sexuality, ethnicity, culture, religious or non-religious beliefs, please let me know.